Individual provisions of the Federal Law on Advertising will come into force (Federal Law No. 347-FZ “On amending the Federal Law ‘On advertising’” dated 2 July 2021, the “Law”) which are aimed at improving relationships in relation to advertising published on the Internet (see also).

The Law was signed by the Russian President on 2 July 2021 and provides for significant changes in monitoring the distribution of advertising, including by establishing a unified information system for keeping a record of advertising in the Internet (the “UIS RAI”).

The Law came into force on 7 July 2021, the day when it was signed; however, the provisions relating to the introduction of the UIS RAI will come into effect on 1 September 2022. In addition, Federal Law No. 38-FZ “On advertising” dated 13 March 2006 will be supplemented with article 18.1 regulating the procedure for introducing the above system.

Let us consider the new developments to come.

What is the UIS RAI?

The Law stipulates that the UIS RAI will ensure the automation of the collection and processing of information concerning advertising published on the Internet, the recording and keeping of such information as well as ensure access to it.

The purpose for which the system has been developed is the prevention of the so-called ‘grey market’, i.e. an effort to counter unlawful schemes aimed at dodging taxes. Moreover, the system is designed to be able to monitor the advertising published on the Internet and to automate the collection and processing of information relating to the advertising published.

At the same time, the implementation of the above system will provide the market with a tool for advertising agencies and media to cooperate with the state, while the data which will be stored in the information system for keeping a record of advertising may be used to enhance the efficiency of advertising campaigns.

Thus, the UIS RAI is expected to ensure the collection, storage, processing and analysis of information, granting at the same time access to such information and providing it in electronic form. It is also envisaged that the UIS RAI may subsequently be integrated with other information systems to obtain accurate and up-to-date information and to control the accuracy, completeness, relevance and timeliness of such information being published.

The obligations to form and maintain the system have been entrusted to the Russian Federal Service for Supervision in the Sphere of Telecom, Information Technologies and Mass Communications (known by the Russian abbreviation “Roskomnadzor”). Roskomnadzor is expected, by processing and analysing the information contained in the information system for keeping a record of advertising, to adjust the elements of the information contained in the above information system. At the same time, Roskomnadzor will be able, by collaborating with the Russian Federal Antimonopoly Service, to determine whether any information published on the Internet falls within the category of advertising.

What information should be included in the UIS RAI?

According to the Law, quite a large volume of information is to be included in the UIS RAI, namely, information concerning advertising published on the Internet as well as information about advertisers and advertising distributors, operators of advertising systems, and advertising intermediaries. It is planned, however, that information concerning social advertising is not to be included in the system.

A specific list of information relating to advertising distributed in the Internet, which should be recorded, kept and processed by Roskomnadzor, is set out in Resolution No. 1362-r of the Government of the Russian Federation dated 3 May 2022.

Who should provide the information?

Advertisers and advertising distributors, operators of advertising systems and advertising intermediaries will be obliged to enter the relevant information into the system independently or through operators of advertising data.

The information will be stored in the UIS RAI for at least five years and will be subject to protection in accordance with the legislation on trade secrecy.

It should be noted that the Russian Government has established criteria for categorising advertisers, advertising distributors, and operators of advertising systems who have published on the Internet advertising aimed at attracting the attention of consumers of advertising in Russia, as persons who are obliged to provide information to Roskomnadzor concerning such advertising (Resolution No. 948 of the Russian Government dated 25 May 2022 “On approving the criteria for categorising advertisers, advertising distributors, and operators of advertising systems who have published on the Internet information and telecommunications network advertising aimed at attracting the attention of consumers of advertising in the Russian Federation, as persons who are obliged to provide information concerning such advertising to the Federal Service for Supervision in the Sphere of Telecom, Information Technologies and Mass Communications”, “Resolution No. 948”).

Such persons are defined as follows.

Advertisers are legal entities or individuals, or individual entrepreneurs, except for those who have an exclusive right to the items being advertised and/or are the manufacturers or sellers of the goods, whose advertisements are distributed through the Internet, and the information about such advertisements must be provided to Roskomnadzor or to the operator of advertising data by the advertising distributors and operators of advertising systems as part of performing their contractual obligations with such advertisers and/or representatives authorised by such persons.

Advertising distributors and operators of advertising systems are legal entities or individuals, or individual entrepreneurs, who distribute through the Internet, or organise the distribution of, advertisements of any advertisers (individuals, individual entrepreneurs, state authorities or other public bodies and local government bodies, as well as municipal authorities that are not part of local government bodies) aimed at attracting the attention of consumers of advertising in Russia, including through the Internet, in the form of banners, textual or textual and graphical blocks, video clips, audio recordings, live audio and/or video broadcasts.

Advertising distributors are the owners of social networks, audiovisual services, news aggregators, the organisers of information being distributed through the Internet, including the organisers of instant messaging services, and operators of search engines as determined by Russian legislation on information, information technologies and the protection of information.

Resolution No. 948 comes into effect on 1 September 2022 and remains in effect for six years.

Roskomnadzor has set up a Commission for selecting operators of advertising data, the operating procedures and composition of which, as well as the criteria for selecting the above operators, will be determined by the Russian Government.

For instance, on 28 May 2022, Resolution No. 966 of the Russian Government was signed “On approving the Regulation on the creation and operation of the commission for selecting an operator of advertising data as well as the criteria for selecting an operator of advertising data” (“Resolution No. 966”). According to the above Regulation, the Commission will perform the following functions:

• determining the period for the selection;
• considering applications to participate in the selection;
• assessing whether the participants in the selection correspond to the conditions of the selection approved by Resolution No. 966; and
• deciding whether a participant in the selection is selected to be an operator of advertising data or whether the participant should be refused such status.

Who has access to the information contained in the UIS RAI?

The Law provides that advertisers, advertising distributors, operators of advertising systems, advertising intermediaries, and operators of advertising data will be entitled to obtain access to the information they entered (including via operators of advertising data), or which was entered in their regard, in the information system for keeping a record of advertising as set out by Roskomnadzor. The list of information access to which will be granted to the above persons will also be determined by Roskomnadzor.

In addition, Resolution No. 974 of the Russian Government dated 28 May 2022 establishes the Rules for Roskomnadzor to interact with the operators of advertising data and persons referred to in article 18.1(3) of Federal Law “On advertising”, including the procedure for, the timeframes and the format of, providing to the Russian Federal Service for Supervision in the Sphere of Telecom, Information Technologies and Mass Communications information about advertising distributed through the Internet information and telecommunications network (the “Rules”).

According to the Rules, the access of the operator of advertising data, the advertiser, the advertising distributor and the operator of advertising systems to the information system and the information interaction of the operator of advertising data, the advertiser, the advertising distributor and the operator of advertising systems with the authorised body shall be enabled via a personal account which is an integral part of the information system (the “personal account”). The user can sign in to the personal account by accessing the information system hosted on the official website of Roskomnadzor in the Internet.

The Federal Tax Service and the Federal Antimonopoly Service will be able to access the system in accordance with the procedure established by Resolution No. 969 of the Russian Government dated 28 May 2022 “On approving the Rules for the Federal Service for Supervision in the Sphere of Telecom, Information Technologies and Mass Communications to grant access to information concerning advertising being distributed through the Internet information and telecommunications network to an antimonopoly authority and to a federal executive body authorised to exercise control and supervision in the sphere of taxes and duties”).

Advantages and shortcomings of tightening the control system of the distribution of advertising in the Internet

It should be noted that, in our opinion, the introduction of the system will have both a positive and negative impact on the participants of the market.

Thus, we believe that the introduction of the new requirements to provide information will strengthen control over advertising on the Internet and enhance its transparency. For instance, the system will allow regulators to monitor violations, starting from prohibitions and restrictions in relation to the sale of alcoholic beverages, tobacco products and products containing nicotine, and up to advertisements calling for participation in political actions, advertisements of organisations which have been categorised as extremist and terrorist, which is no less pertinent these days.

However, in our opinion, the introduction of the recording system may result in additional expenses of advertising agencies and advertisers and in a reduction in the amount of advertising published on the Internet. Thus, according to the calculations made by the Association for the Development of Interactive Advertising (аn association of major participants of the interactive advertising market in Russia which includes over 100 entities providing the national economy with advertising, communications and analytical tools), the expenses of the participants of the market of Internet advertising incurred to implement the new requirements will come to RUB 10–20 billion.

In addition, taking into account the economic sanctions imposed by the USA and EU countries against Russia after 24 February 2022 as well as other restrictive measures, most of the companies are likely to face difficulties with the procurement of server equipment to store information about all the impressions of advertisements in the Internet for the last five years.

What to think about and what to do

Since individual provisions of the Law will soon come into force, it is recommended that companies publishing advertising on the Internet, which are aimed at attracting the attention of consumers of advertising in Russia, inform their responsible persons about the new procedure for providing information concerning advertising distributed through the Internet.

In view of the coming changes, the specified measures will allow participants of the market to continue to show good faith.

Pepeliaev Group’s experts