New Russian software law could spark exodus, AEB warns

03/11/2015

DR Frank Schauff CEO AEBRussian software law: Foreign IT companies could start suspending their investments in Russia or withdraw from the country altogether over legislation requiring state agencies to justify the purchase of foreign software, the CEO of the Association of European Businesses (AEB) Dr Frank Schuaff warned this week. In a letter to senior Russian officials, he also singled out as discriminatory a law prohibiting the state purchase of foreign software when a domestic version is available. The letter was sent to the Trade and Industry Minister Denis Manturov, Communications Minister Nikolai Nikiforov, Minister of Economic Development Alexei Ulyukayev and Federal Anti-Monopoly Service chief Igor Artemyev.
“European business has made significant investments in Russia over the past decade and was planning to invest in the future, but now foreign IT companies may suspend investment or even leave the Russian market,” he wrote, adding that equal conditions for Russian and foreign companies would have to be provided if foreign investment was to continue. He urged the Russian government to postpone the law obliging state agencies to provide written justification for the purchase of foreign-made software for six months and for the time to be used to develop joint criteria for the localization of foreign IT companies in Russia so that they can qualify as Russian under the new laws.
Last year, SAP, Oracle, IBM, Microsoft and Cisco between them supplied the Russian state sector with software worth $312m.