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Software localization: what is important for companies to know

2024-02-19 13:38 Legal Digest News
Due to#nbsp;the tightening of#nbsp;sanctions imposed by#nbsp;the Council of#nbsp;the European Union, access of#nbsp;Russian companies to#nbsp;a#nbsp;number of#nbsp;programs and cloud resources will be#nbsp;terminated.

The innovations establish a#nbsp;ban on#nbsp;the sale, supply, transfer, export or#nbsp;other provision of#nbsp;software that is#nbsp;used in#nbsp;the fields of#nbsp;enterprise management, industrial design and production.

We#nbsp;are mainly talking about specialized software for architectural and engineering surveys, organizations in#nbsp;the field of#nbsp;design, production, work in#nbsp;the media, and the entertainment industry. However, the ban itself applies to#nbsp;any Russian legal entity. A#nbsp;specific list of#nbsp;software that falls under the European sanctions:

  • Enterprise Resource Planning (ERP)
  • Customer Relationship Management System (CRM)
  • Business Analytics (BI)
  • Supply Chain Management (SCM)
  • Corporate Data Warehouse (EDW)
  • Computerized Maintenance Management System (CMMS),
  • Project Management software, Product Lifecycle Management (PLM) and other components for the specified software, including software for accounting, fleet management, logistics and personnel management
  • Building Information Modeling (BIM)
  • Computer-aided design (CAD) system
  • Automated Production System (CAM)
  • Custom development (ETO) and other components for the specified software.

Meanwhile, if#nbsp;a#nbsp;European company has concluded a#nbsp;software provision agreement with a#nbsp;Russian counterparty before December 19, 2023, then it#nbsp;will be#nbsp;possible to#nbsp;supply and sell software to#nbsp;Russia until March 20, 2024.

There may also be#nbsp;exceptions in#nbsp;cases where the ban on#nbsp;providing software is#nbsp;not valid:

  • If#nbsp;a#nbsp;Russian company is#nbsp;owned or#nbsp;controlled by#nbsp;legal entities registered on#nbsp;the territory of#nbsp;an "unfriendly" country, then the ban on#nbsp;providing software does not apply until June 20, 2024.
  • If#nbsp;the sale, transfer, or#nbsp;delivery of#nbsp;software to#nbsp;Russia is#nbsp;conditioned by#nbsp;exceptional public goals (for example, responding to#nbsp;health emergencies), preventing natural disasters, etc.
  • If#nbsp;the Russian organization has received permission from the authorized bodies of#nbsp;the#nbsp;EU member States. However, at#nbsp;present, the form and procedure for obtaining such permits by#nbsp;members of#nbsp;the#nbsp;EU Council is#nbsp;not specified.

There is#nbsp;no#nbsp;liability for violation of#nbsp;such a#nbsp;ban, but foreign companies can be#nbsp;guided by#nbsp;the legislation of#nbsp;the State of#nbsp;the country in#nbsp;respect of#nbsp;which such a#nbsp;ban is#nbsp;violated.

For localization and migration to#nbsp;Russian software, please contact the#nbsp;IT department of#nbsp;Acsour. Our experts will help you adapt the technical features of#nbsp;your business to#nbsp;the new rules, as#nbsp;well as#nbsp;take active measures to#nbsp;localize and develop domestic software.