Real Property

Russia placed 12th overall in the 2020 World Bank Doing Business Report for “registering property,” which analyzes the “steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute,” as well as the “the quality of the land administration system.”

The Russian Constitution, along with a 1993 Presidential Decree, gives Russian citizens the right to own, inherit, lease, mortgage, and sell real property. The state owns the majority of Russian land, although the structures on the land are typically privately owned. Mortgage legislation enacted in 2004 facilitates the process for lenders to evict homeowners who do not stay current in their mortgage payments.

Intellectual Property Rights

Russia remained on the U.S. Trade Representative (USTR) Special 301 Priority Watch List in 2020 and had several illicit streaming websites and online markets reported in the 2019 Notorious Markets List. Particular areas of concern include copyright infringement, trademark counterfeiting/hard goods piracy, and non-transparent royalty collection procedures. Stakeholders continue to report significant piracy of video games, music, movies, books, journal articles, and television programming. Mirror sites related to infringing websites and smartphone applications that facilitate illicit trade are also a concern. Russia needs to direct more action to rogue online platforms targeting audiences outside the country. In December 2019, for the first time in Russia, the owner of several illegal streaming sites received a two-year suspended criminal sentence for violating Russia’s IP protection legislation. This case has set an important precedent for enforcing IPR laws in Russia.

Online piracy continues to pose a significant problem in Russia. Russia has not upheld its commitments to protect IPR, including commitments made to the United States as part of its WTO accession. Nevertheless, there are indications that the Russian internet piracy market is declining. According to Group-IB, a global cyber threat intelligence company, total revenue of the Russian video piracy market in 2020 reached $59 million. The market has been shrinking for several years in a row. In 2020, the market declined by 7 percent, compared to a 27 percent drop registered in 2019.

Despite Russia’s 2018 ban on virtual private networks (VPNs), the ban has not been fully enforced. Since 2017, search engines, including Google and Yandex, have been required to block IPR-infringing websites and “mirror” sites, as determined by federal communications watchdog Roskomnadzor. As a result of increased scrutiny, internet companies Yandex, Mail.Ru Group, Rambler, and Rutube signed an anti-piracy memorandum with several domestic right holders, which is valid through the end of 2021. From January to November 2020, Roskomnadzor blocked over 10,000 piracy websites and “mirror sites,” compared to over 6,000 in 2019.

Modest progress has been made in the area of customs IPR protection since the Federal Customs Service (FTS) can now confiscate imported goods that violate IPR. From January to November 2020, the FTS seized 12.8 million counterfeited goods, compared with 11 million in 2019. Over the same time period, the FTS prevented the infringement and damages to copyright holders amounting to RUB 4.6 billion ($64 million), and identified 11.8 million units of counterfeit industrial products in Russia, almost double compared to 2019. The turnover of counterfeit non-food consumer goods in Russia is estimated at around RUB 5.2 trillion ($70 billion), or 4.5 percent of Russia’s GDP.

In May 2020, the State Duma approved amendments to the Federal Law “On Information, Information Technologies and the Protection of Information” to allow blocking mobile applications with illegal content. The Law enables the Russian regulator (“Roskomnadzor”) to mandate app owners and app platforms such as AppStore, Google Play and Huawei AppGallery to delete the IP infringing content.

Please note that the following tables include FDI statistics from three different sources, and therefore will not be identical. Table 2 uses BEA data when available, which measures the stock of FDI by the market value of the investment in the year the investment was made (often referred to as historical value). This approach tends to undervalue the present value of FDI stock because it does not account for inflation. BEA data is not available for all countries, particularly if only a few US firms have direct investments in a country. In such cases, Table 2 uses other sources that typically measure FDI stock in current value (or, historical values adjusted for inflation). Even when Table 2 uses BEA data, Table 3 uses the IMF’s Coordinated Direct Investment Survey (CDIS) to determine the top five sources of FDI in the country. The CDIS measures FDI stock in current value, which means that if the U.S. is one of the top five sources of inward investment, U.S. FDI into the country will be listed in this table. That value will come from the CDIS and therefore will not match the BEA data.

* Source for Host Country Data: FDI data – Central Bank of Russia (CBR); GDP data – Rosstat (GDP) (Russia’s GDP was RUB 110,046 billion in 2019, according to Rosstat. The yearly average RUB-USD- exchange rate in 2019, according to the CBR, was RUB 64.7362 to the USD).