Direct Ban on Collecting Personal Data Using Foreign Databases Will Take Effect on July 1, 2025
On February 28, 2025, a law introducing amendments to the personal data regulation was published. These amendments will come into force on July 1, 2025 [1]
In addition to establishing a special data processing regime for certain categories of individuals (specifically: employees of the FSB, foreign intelligence, state security, the Ministry of Internal Affairs, judges, participants in criminal proceedings, and some other persons), the amendments also clarify the requirements for the collection of personal data.
Specifically, Article 18, Part 5 of Federal Law No. 152-FZ previously imposed a positive obligation on operators to process personal data collected in databases located in Russia. The updated wording now establishes a direct ban on collecting personal data using foreign databases.
Initial data collection, as well as any subsequent updates (clarification, renewal, or modification), must now be carried out using databases located exclusively within the territory of the Russian Federation. Whether the subsequently collected data can be transferred for use in foreign systems remains an open question, and we will closely monitor any further developments on this issue.
New Bill of Clarifying Requirements for the Return of Foreign Companies to Russia
A bill[2] has been submitted to the State Duma introducing measures that affect organizations from unfriendly states that ceased or reduced business operations in Russia after February 22, 2022, and are now seeking to resume their activities.
These measures include:
The decision to apply such measures to a particular organization, and their duration, will be made by the President. The Government will determine the procedures for enforcing mandatory payments, approve the form and conditions for technology disclosure, and define the list of business activities and other grounds for applying such measures.
Cassation Court Emphasizes the Need to Assess Public Policy in Sanctions-Related Disputes
By the judgment of court of first instance, a Swiss creditor was issued a writ of execution to enforce an award of the International Commercial Arbitration Court at the Chamber of Commerce and Industry of the Russian Federation (ICAC), to recover a debt from a debtor under Russian jurisdiction for goods supplied.
However, a cassation court overturned the order and remanded the case for reconsideration. It found that, at the time of the order, countersanctions were in effect on fulfilling obligations to foreign agents under the jurisdiction of foreign unfriendly countries. The court of first instance had failed to examine whether enforcing ICAC award would contradict Russian public policy. The creditor attempted to challenge the judgment of cassation court, but it was refused to send the case for the consideration of Supreme Court of of the Russian Federation [3]
Damages and Penalties Must Be Calculated in the Currency of the Obligation, Not the Payment Currency
The Supreme Court of the Russian Federation reviewed a dispute between an individual entrepreneur and a supplier under a leasing agreement. The contract stipulated that the obligation would be denominated in US dollars, while payments were to be made in Russian rubles. Due to the supplier’s failure to deliver the bus on time, the leasing deal was terminated and a new vehicle was purchased from another supplier at a higher price. The entrepreneur sought compensation for damages resulting from the substitute transaction.
Courts of all three instances upheld the claim and calculated the damages in rubles, rejecting the supplier’s argument that the calculation should be made in US dollars. However, the Supreme Court disagreed, stating the following:
·The parties had agreed on US dollars as the currency of the obligation and had accepted the currency exchange risk;
·Damages must be calculated in the agreed currency of the obligation, regardless of the payment currency;
·Calculating damages solely in rubles without reference to the agreed currency may distort the actual loss, especially in the context of exchange rate fluctuations.
The Court emphasized that when awarding damages in foreign currency, the amount must be indicated in that currency, with the ruble equivalent calculated at the official exchange rate on the date of payment, unless otherwise provided by law or contract (Ruling of the Supreme Court of the Russian Federation dated May 22, 2025 No. 305-ЭС25-619. The case was remanded for a new hearing).
[1] Federal Law No. 23-FZ "On Amendments to the Federal Law "On Personal Data" and Certain Legislative Acts of the Russian Federation"
[2] https://sozd.duma.gov.ru/bill/928052-8
[3] Ruling of the Supreme Court of the Russian Federation dated 16.05.2025 N 301-ES25-3149 in case N A43-27728/2024
On February 28, 2025, a law introducing amendments to the personal data regulation was published. These amendments will come into force on July 1, 2025 [1]
In addition to establishing a special data processing regime for certain categories of individuals (specifically: employees of the FSB, foreign intelligence, state security, the Ministry of Internal Affairs, judges, participants in criminal proceedings, and some other persons), the amendments also clarify the requirements for the collection of personal data.
Specifically, Article 18, Part 5 of Federal Law No. 152-FZ previously imposed a positive obligation on operators to process personal data collected in databases located in Russia. The updated wording now establishes a direct ban on collecting personal data using foreign databases.
Initial data collection, as well as any subsequent updates (clarification, renewal, or modification), must now be carried out using databases located exclusively within the territory of the Russian Federation. Whether the subsequently collected data can be transferred for use in foreign systems remains an open question, and we will closely monitor any further developments on this issue.
New Bill of Clarifying Requirements for the Return of Foreign Companies to Russia
A bill[2] has been submitted to the State Duma introducing measures that affect organizations from unfriendly states that ceased or reduced business operations in Russia after February 22, 2022, and are now seeking to resume their activities.
These measures include:
- Mandatory payments;
- Disclosure of technologies used in the creation of high-tech products;
- Other restrictions.
The decision to apply such measures to a particular organization, and their duration, will be made by the President. The Government will determine the procedures for enforcing mandatory payments, approve the form and conditions for technology disclosure, and define the list of business activities and other grounds for applying such measures.
Cassation Court Emphasizes the Need to Assess Public Policy in Sanctions-Related Disputes
By the judgment of court of first instance, a Swiss creditor was issued a writ of execution to enforce an award of the International Commercial Arbitration Court at the Chamber of Commerce and Industry of the Russian Federation (ICAC), to recover a debt from a debtor under Russian jurisdiction for goods supplied.
However, a cassation court overturned the order and remanded the case for reconsideration. It found that, at the time of the order, countersanctions were in effect on fulfilling obligations to foreign agents under the jurisdiction of foreign unfriendly countries. The court of first instance had failed to examine whether enforcing ICAC award would contradict Russian public policy. The creditor attempted to challenge the judgment of cassation court, but it was refused to send the case for the consideration of Supreme Court of of the Russian Federation [3]
Damages and Penalties Must Be Calculated in the Currency of the Obligation, Not the Payment Currency
The Supreme Court of the Russian Federation reviewed a dispute between an individual entrepreneur and a supplier under a leasing agreement. The contract stipulated that the obligation would be denominated in US dollars, while payments were to be made in Russian rubles. Due to the supplier’s failure to deliver the bus on time, the leasing deal was terminated and a new vehicle was purchased from another supplier at a higher price. The entrepreneur sought compensation for damages resulting from the substitute transaction.
Courts of all three instances upheld the claim and calculated the damages in rubles, rejecting the supplier’s argument that the calculation should be made in US dollars. However, the Supreme Court disagreed, stating the following:
·The parties had agreed on US dollars as the currency of the obligation and had accepted the currency exchange risk;
·Damages must be calculated in the agreed currency of the obligation, regardless of the payment currency;
·Calculating damages solely in rubles without reference to the agreed currency may distort the actual loss, especially in the context of exchange rate fluctuations.
The Court emphasized that when awarding damages in foreign currency, the amount must be indicated in that currency, with the ruble equivalent calculated at the official exchange rate on the date of payment, unless otherwise provided by law or contract (Ruling of the Supreme Court of the Russian Federation dated May 22, 2025 No. 305-ЭС25-619. The case was remanded for a new hearing).
[1] Federal Law No. 23-FZ "On Amendments to the Federal Law "On Personal Data" and Certain Legislative Acts of the Russian Federation"
[2] https://sozd.duma.gov.ru/bill/928052-8
[3] Ruling of the Supreme Court of the Russian Federation dated 16.05.2025 N 301-ES25-3149 in case N A43-27728/2024