Russia in the News — Weekly Round-up for December 14, 2018

By Brian Cullingworth, Last updated Dec 14, 2018

Russia Moves Against Google

Telecomms watchdog Roskomnadzor imposes a US$7,500 penalty for non-compliance with regulatory requirement that search engine entries be linked to Russian black list

Russian telecomms watchdog Roskomnadzor made good on its threats to move against Google Tuesday, imposing a US$7,500 penalty on the internet giant for failing to connect its Russian search results with the Russian national federal state information system.

That blacklist, which is continuously growing, has tens of thousands of blacklisted Russian domains and currently comprises over 100,000 entries.

The penalty is well below the maximum US$700,000 allowable under Russian law and comes after repeated official warnings to Google.

Roskomnadzor chief Alexander Zharov said Tuesday that his officials had gone to great lengths to explain the requirements of Russian law to their counterparts at Google, and warned that further cases could be opened against Google in the event of continued non-compliance.

Russia To Tighten International Financial Restrictions?

Duma mulls amendments to financial regulations

Russian media reports Monday note that lawmakers in the Duma (parliament) are currently considering new restrictions on financial transactions with the outside world which will include some major realignments between banks and companies.

The amendments give increased powers to the Central Bank of Russia in its monitoring and control of international transactions, citing the need for national security and the integrity of Russia’s payment space.

It is particularly focused on the use of foreign e-wallets, international remittance firms and payment processors, which will be required to register with the Central Bank, and set up a locally available representative within Russia’s borders.

Third party payment aggregators assisting Russian merchants with online card payment services will be required to establish business partnerships with local banks and re-register contracts, whilst Russian financial institutions will be required to advise the Central Bank of any new international relationships with payment services they establish.

In general, companies and organisations will have a period of six months from the date the amendments are passed to comply with the requirements, although a more generous timeframe of 270 days is allowed for the termination of payment processor contracts with companies which fail to register with the Central Bank.

Earlier this week it emerged that the Russian federal government was considering the changes to the gambling payment hub TSUPIS system set up by self-regulating bodies to facilitate online betting financial transactions.

Government sources revealed that the Federal Tax Service was of the view that these vehicles had served their purpose and now are a duplication of Tax Service responsibilities (see previous InfoPowa report).

The Ministry of Economic Development’s announcement that it is framing new laws to scrap three self-regulating bodies in the sports betting and sweepstakes online verticals raised questions regarding a duplication of activity by the self-regulatory bodies and the federal Russian Tax Authority.

Russian Operators Divided On Government Proposal To Do Away With Self-Regulatory Bodies

Now that Tsupis payment hubs are established, do self regulating bodies still have a role?

Russian government plans to do away with three self-regulating gambling bodies have triggered a debate in which interested parties appear to be divided.

The Ministry of Economic Development’s announcement that it is framing new laws to scrap three self-regulating bodies in the sports betting and sweepstakes online verticals has raised questions regarding a duplication of activity by the self-regulatory bodies and the federal Russian Tax Authority.

The self-regulating bodies were useful in establishing the regulated and licensed online betting market several years ago, particularly in the set-up of the TSUPIS payment hubs, but supporters of the government proposal suggest that they are duplicating the tax service function and are now no longer necessary.

The reaction of opponents to the government’s plan ranges from incredulity to confusion, with some alleging that self-regulating organisations have played a key role in ensuring that Russian- licensed operators dominate the online betting market.

Others have gone so far as to suggest that the move to abolish self-regulating outfits is part of a plot by illegal foreign operators alarmed at being deprived of business by the efficacy of the bodies, or that the initiative has the potential to reduce the online betting sector to “chaos”.

Sweepstakes self-regulators claim that the government’s plan for a national self-exclusion register for problem gamblers administered by the self-regulating authorities could be disrupted by the move to do away with self-regulation, and reminded officials that self-regulators also play an important role in handling player communications, especially those regarding complaints against operators.

Government plans for the new year include further hearings on the issue, where the views of a wide cross-section of interested parties will be sought.

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