A newly adopted federal law is aimed at facilitating access to information on encumbrances over movable property. The new service, which allows to search information on encumbrances over movable property, will be available through the online portal of public services. Using this portal, it will be possible to check information on existing pledges, execution of finance lease contracts, and on retention of title by sellers of movable property until repayment of the purchase price.

Federal law No. 370-FZ aimed at creating a unified system for searching information on collaterals and other encumbrances with regard to movable property was adopted on 12 November 2019. To facilitate online access to such information, a unified search engine will be created based on the existing Register on notices about encumbrances over movable property (which is maintained by the Federal Notary Chamber) and the Unified Federal Register of Information on the Activities of Legal Entities (operated by CJSC “Interfax”). This unified search engine will be available online through the portal of state services.

The new service will allow users to view information on pledge rights over movable property, about execution of finance lease contracts, about retention of title by sellers of movable property until repayment of the purchase price and other information contained in the Unified Federal Register of Information on the Activities of Legal Entities.

The new statutory provisions will come into force in May 2020. It is important for creditors to review this information since in any case third parties are considered to have knowledge about the relevant facts if they are published in the Unified Federal Register of Information on the Activities of Legal Entities.

On 2 December 2019, a new law was adopted that requires pre-installation of Russian software on select types of technical devices sold in Russia. The list of such technical devices and relevant mandatory software will be determined by the Government of the Russian Federation. The law will come into force on 1 July 2020.

In accordance with Federal law No. 425-FZ dated 02.12.2019, certain types of technical devices will have to be sold to consumers with pre-installed Russian software. The list of technical devices, which will be subject to the new requirements, and the list of mandatory Russian software will be determined by the Government of the Russian Federation.

According to the lawmakers, these requirements will facilitate the promotion of Russian software on the market, and will allow end-users to use relevant devices immediately after purchasing them and without the need to install additional mobile apps and other software.

However, a number of international companies, including Apple, have already expressed readiness to reconsider their business model and exit the Russian market if these requirements affect their products.

The Russian Supreme Court clarified that an employer cannot dismiss employees who failed to appear at the workplace due to an extenuating reason, provided that the relevant employee informed the employer about his or her absence and took steps to maintain the workflow in his or her absence. According to the Supreme Court, dismissal of employees due to their non-appearance at work is an extreme measure. Therefore, employers are not entitled to dismiss employees even if an occasional absence from the workplace (for a valid reason) was not approved by the employer.

In the case considered by the Supreme Court, the employer dismissed an employee because she failed to show up at her workplace. At the same time, the employee had notified the employer via a text message about the absence, stating that she had to urgently visit her seek relative in a hospital. Further, the employee had taken measures to maintain proper workflow in her absence by asking another employee to come in to work instead of her.

Although the employee did not receive the employer’s response to her text message and the employer did not approve her absence from the workplace, the Supreme Court found the dismissal illegal. Further, the Supreme Court clarified that the consent of the employer is not essential to deciding on the legality of the employee’s absence. The Supreme Court reminded that dismissal is a measure of last resort. Therefore, employers must consider the severity of employee misconduct and all circumstances of the case, as well as the employee’s previous record and his or her attitude to work. Therefore, even if the employee committed a disciplinary offence, but the dismissal was carried out without taking into account the extenuating circumstances, the employer’s decision on the dismissal may be considered illegal (see Ruling of the Judicial Panel on Civil Matters of the Supreme Court of the Russian Federation dated 01.07.2019 No. 5-КГ19-81).

A newly passed federal law allows companies, which choose to appoint several directors, to publish information on whether their directors can represent the company jointly or independently of each other in the Russian trade register. Publication of this information in the state register will allow companies to limit their directors’ authority to single-handedly execute deals and take other legally relevant actions. Moreover, this federal law expands the list of information which can be published in the Unified Federal Register of Information on the Activities of Legal Entities, both mandatorily and at the company’s discretion.

Federal law No. 377-FZ, which was adopted on 12 November 2019, allows companies to fully implement the option of appointing several company directors. The possibility to appoint several directors had already been introduced into the Russian civil legislation in the fall of 2014. However, prior to the new Federal law, companies were unable to publish information on whether several directors are entitled to act jointly or independently and include this information into the state register. This information could be indicated only in the company’s articles of association, and, as a general rule, was not available to third parties. Given that this information could not be included in the state register, the Supreme Court clarified that third parties were entitled to presume that each of the co-directors could represent the company independently. In turn, this effectively deprived companies from the benefits of appointing several directors and prevented them from limiting the authority of their directors (see Decision of the Plenum of the Supreme Court No. 25 dated 23 June 2015).

The new law will allow publishing information on the authority of each director in the Russian trade register, which will prevent third parties from arguing that they did not know that a director could only act jointly with another director. These amendments will come into force on 1 September 2020.

Moreover, this federal law expands the list of information which the company has to include in another federal register – the Unified Federal Register of Information on the Activities of Legal Entities. In particular, companies will be obliged to publish notices on corporate restructuring, winding-up, decrease of the statutory (authorized) capital and about the sale and lease of their business.

Additionally, starting from 1 April 2020, companies will be entitled to publish other information in the Unified Federal Register of Information on the Activities of Legal Entities on a voluntary basis. In particular, companies may choose to publish information on the right to repurchase property, on an obtained suretyship, on limitations of contractual rights and other information at the company’s discretion. Third parties will be considered to have knowledge about these facts from the day following the day of their publication in the register.

According to the annual survey of the World Bank Group, Russia is ranked in the world’s top-30 jurisdictions with the most favorable conditions for doing business. As a result of Russia’s 2018 legislative reforms, Russia climbed three spots (up to the 28th place) within one year.

For the first time in history, Russia has become a top-30 country in the international ranking “Doing Business,” which ranks countries based on the most favorable conditions for doing business. The ranking is annually published by the World Bank Group. Compared to last year’s results, Russia climbed three spots (from the 31th to 28th place), and is ahead of Japan, China, France and other countries. Like in the previous year, New Zealand and Singapore are at the top of the ranking.

In compiling the ranking this year, the World Bank took into account several Russian legislative reforms, which were aimed at creating favorable conditions for doing business. In particular, several reforms were intended to broaden the application of the “single-window” system for obtaining public services, to strengthen the protection of minority shareholders through increased corporate transparency, and to simplify tax bookkeeping.

Russia ranks the highest with regard to the ease of getting electricity (7th place), registering property (12th place), and getting credit (25th place).