As of 3 June 2015 foreign or international non-governmental organisations in Russia can be labelled as ‘undesirable’ if their activities pose a threat to the foundations of the constitutional system of Russia, its defence capabilities or security. While non-Russian NGOs that operate in Russia are the immediate target of the new rules, foreign commercial entities and their Russian subsidiaries can be caught too – the language of the new law is vague, does not expressly exclude commercial entities controlled outside of Russia and is likely to be interpreted broadly. What will constitute a qualifying threat is also open to interpretation. Thus, it was suggested that challenging the status of Crimea as a subject of the Russian Federation (and not Ukraine) could trigger the application of the new law. Moreover, interacting with or involvement in the activities of an undesirable organisation could include making donations or providing services to such an organisation.
If an organisation is declared undesirable by the Public Prosecutor following the endorsement of the Ministry of Foreign Affairs, it will be entered on a list kept by the Ministry of Justice and published on their official website (if you are viewing this page in Russia, click here to access the list in Russian). Upon publication, the organisation’s accounts will be blocked, its structural units in Russia will have to close, it will have to stop its projects in Russia and cease disseminating information materials via mass media and the internet.
This development does not call for any immediate action for most ‘normal’ commercial businesses, except for banks and lending agencies that must refuse to execute payment orders from or for the benefit of organisations declared undesirable, and report such refusal to the Federal Financial Monitoring Service.
Those involved in the activities of an undesirable organisation run the risk of:
- being held administratively liable and fined as follows:
- ordinary citizens – up to RUB 15,000 (approx. EUR 240);
- organisation executives – up to RUB 50,000 (approx. EUR 800); and
- legal entities – up to RUB 100,000 (approx. EUR 1,600);
- being banned from entering Russia – only applicable to foreign citizens;
- being held criminally (including being sentenced up to six years’ imprisonment) if a person:
- manages the activities of an undesirable organisation; or
- continues to participate in the activities of an undesirable organisation despite having been held administratively liable twice over a one-year period under the new rules.
In addition to the risk that the new law will be interpreted broadly to include foreign commercial entities, it is also conceivable that the new rules may be used as an extrajudicial lever against companies controlled from abroad. We therefore recommend foreign-owned companies in Russia take this into account when making public communications and interacting with non-Russian NGOs.