On 1 September 2022, amendments* to Federal Law No 38 “On Advertising” dated 13 March 2006 (the “Law”) will come into force. The Law will be supplemented by article 18.1 on online advertising, which is dedicated to labelling and accounting for online advertisements as well as transferring information to the Unified Online Advertising Register, which will be maintained by Roskomnadzor.
In order to implement the new mechanism, the Russian government and Roskomnadzor have issued a number of regulations which are listed at the end of our alert.
Roskomnadzor also provided answers* to frequently asked questions on this topic and, together with the Association of Communication Agencies of Russia (ACAR) and the Association for the Development of Interactive Advertising (ADIR), released Guidelines for advertisers*.
The Guidelines state, among other things, that the period from 1 September to 31 October 2022 will be a transitional one. During this period, the market will be given the opportunity to adapt to the new rules.
Who is subject to the new rules
The Law requires advertisers, advertising distributors and advertising system operators to submit information about advertisements to Roskomnadzor. The information is transmitted to the supervisory authority through an advertising data operator (an “ADO”).
ADO is defined as an owner of a computer programme authorised by Roskomnadzor to establish that advertisements have been disseminated on the Internet. The task of an ADO is to mediate the interaction of advertisers, advertising distributors and advertising system operators with Roskomnadzor.
ADOs are entrusted with, among other things, registering future advertising material, transmitting information on advertising to Roskomnadzor and tracking advertising actually placed by a regulated entity.
Roskomnadzor has been instructed with maintaining a register of ADOs (see the Procedure for Maintaining the Register* and the Procedure for Selecting ADOs*, both effective from 1 September 2022). It is expected that the official list of ADOs will be formed in October 2022 at the earliest.
Under the new rules, advertisers, advertising distributors and advertising system operators are required to provide information about online advertising to Roskomnadzor if the entity meets the introduced criteria* and the advertisement is aimed at consumers from Russia. The criteria are formulated as broadly as possible, making almost all advertisers, advertising distributors and advertising system operators subject to the regulation of the Law. The general procedure for such interaction is defined in Government Decree No. 974*.
There are exceptions to the rules. The following entities are not required to submit information to Roskomnadzor:
- the operator* of social advertising; and
- advertisers who have exclusive rights to advertised items and/or are manufacturers or sellers of goods, if they have contracted to provide such information to an advertising distributor or advertising system operator.
At the same time, Roskomnadzor noted in its clarifications that each regulated entity can instruct its contractual counterparty to technically provide the information on its behalf. Liability for failure to provide the information remains on the entity who instructed its counterparty to transmit the relevant information.
In addition, the requirement to provide information and affix an identifier does not apply to the following types of advertisements:
- advertisements of the regulated entity’s own products distributed independently or through entities belonging to the same group, by email or push notifications; and
- information about advertisements that are or were distributed on the Internet as part of a TV programme, TV broadcast, radio programme or radio broadcast without any changes compared to direct broadcasting, i.e. in the same sequence, form or amount.
Interaction procedure with Roskomnadzor
As a general rule, information on advertisements is transmitted to Roskomnadzor’s Unified Online Advertising Register as follows:
1. Regulated entities must determine, before registering information, whether the material they wish to publish is advertising or falls under reference or other information that is not subject to the described rules.
2. If information relates to advertising, a regulated entity must register the future advertising material (referred to as “creative material” in Roskomnadzor’s replies) with an ADO before disseminating it.
The ADO labels such materials, i.e. assigns them a special identifier by which advertisement is subsequently identified.
According to companies applying for ADO status, creative material for a specific advertising campaign will only need to be registered once to receive the appropriate identifier. The entity who has registered the relevant creative material will have to pass on information about the identifier to other entities in the chain of contracts for the relevant advertisement so that the latter may send information about the advertisement after it has been distributed (more on this in item 4).
3. At the time of dissemination, the advertisement must be accompanied by:
- the identifier of the advertisement assigned by the ADO upon registration;
- the marking “advertisement”;
- the advertiser’s name and the website with information about the advertiser.
4. Within one month following the month of dissemination of the advertisement, the regulated entity must, through the ADO, transmit to Roskomnadzor information on the advertisement, including information on the advertisers and distributors of the advertisement, as well as the operators of the advertising systems used (see list of information*).
5. Roskomnadzor receives, stores and processes all the information it receives about the advertisement disseminated. In addition, Roskomnadzor may request information from an ADO on the advertisements actually disseminated and check it against the information previously provided by the regulated entity through an ADO.
The new mechanism also provides for the right of regulated entities to request from Roskomnadzor access to information on advertising if it concerns their rights and obligations (see what can be requested* and how to request*).
In certain cases, Roskomnadzor will transfer the information it holds to the Russian Federal Antimonopoly Service (FAS) and the Russian Federal Tax Service (FTS) (see their interaction procedure*) and other bodies to be determined by the Russian government.
6. From 1 March 2023, in addition to independent checks by Roskomnadzor, ADOs will be required to monitor and analyse the advertisements actually distributed and verify their compliance with the information provided. In the event of discrepancies, an ADO will be entitled to report this to Roskomnadzor.
Article 18.1 (11) of the Law stipulates that the regulated entities are responsible for the completeness, reliability, relevance and timeliness of the submission of information to Roskomnadzor.
In addition, article 38 of the Law was supplemented with a provision on the liability of the advertiser for compliance with the requirement that the advertising material be marked as “advertising” and that the advertiser and its website be indicated.
Currently no special liability provisions have been introduced in the Code on Administrative Offences in connection with new requirements to account for online advertising, but there is general liability for non-compliance with advertising legislation under part 1 of article 14.3 of this Code, which provides for imposition of the following fines
- for corporate officers – from RUB 4,000 to RUB 20,000 (from EUR 64 to EUR 320);
- for legal entities – from RUB 100,000 to RUB 500,000 (from EUR 1,600 to EUR 8,000).
According to information from Roskomnadzor and the FAS, for the first few months, regulatory authorities will look at the actual implementation of new provisions and no penalties will be imposed, but there is no such “transition period” in the legislation.
It should also be taken into account that Roskomnadzor may transmit information on Internet advertising to the FTS, and the FTS is expected to use such information for tax control. In this respect, it is necessary to be careful about the information and its compliance with the advertisements actually disseminated as soon as they start to be transmitted to the Unified Register of Online Advertising.
In view of the new requirements for labelling and accounting for online advertising, we recommend the following steps:
- An agreement must be concluded with an ADO for the transmission of advertising information. The list of ADOs is expected to be determined in October 2022.
- Advertisers should determine whether the material to be placed on the Internet is classified as advertising and does not fall under the exceptions set out above. This should be taken into account when drafting contracts for online advertising.
- If the advertiser does not plan to interact itself with an ADO, the relevant obligations should be stipulated in contracts with agencies and advertising distributors.
- Advertising materials must be registered with an ADO before being released.
- The released advertisement must contain an advertisement identifier (assigned by an ADO upon registration), the word “advertisement”, the name of the advertiser and a website with information about the advertiser.
- Once the advertisement has been released, information about it and the regulated entities involved in its placement must be transmitted to Roskomnadzor via an ADO.
- The advertisement actually placed and information about it must be consistent with the information provided to Roskomnadzor.
Despite the vast body of secondary legislation concerning this area, the existing rules and available clarifications do not answer all the questions related to the new labelling and accounting mechanism for online advertising. More certainty is expected to emerge after 1 September when the Unified Online Advertising Register is operational and market players start to actively engage with Roskomnadzor.
In order to implement the new mechanism, the Russian government and Roskomnadzor have issued a number of regulations which cover the following issues:
If you still have questions about the topic at hand, please contact SEAMLESS Legal experts.
* In Russian