Amendments to the Federal Law “On non-profit organisations”: are there any challenges for software developers and open source?

At the end of summer 2023, very few people, especially those from the IT industry, took notice of the amendments to Federal Law No. 7-FZ of 12 January 1996 “On Non-Profit Organisations” (“NPO Law”). The amendments were introduced by Federal Law No. 409-FZ of 31 July 2023 “On Amending the Federal Law ’On Non-Profit Organisations’.”

However, the changes are quite wide-reaching: instead of just the one former ban on participating in the bodies of foreign NPOs, which was set as a general rule for civil and municipal servants, the current version of art. 30.1 now also prohibits natural persons and legal entities from taking part in the activities of a foreign non-profit organisation that does not have divisions in Russia. For breaching this requirement, a person can incur administrative liability and, in some instances, even criminal liability.

The Commission for Legal Support of the Digital Economy of the Moscow office of Russia’s Lawyer Association has already noted that these amendments are formulated in such a way that they can cover activities associated, among other things, with the development of open source products.

So what has changed?

In brief, nobody can now take part in the activities of foreign non-government NPOs that do not have a presence in Russia, except for activities where such NPOs were invited to participate by persons authorised to do so.

Some time ago, before Federal Law No. 409-FZ of 31 July 2023 “On Amending the Federal Law ’On Non-Profit Organisations’”, art. 30.1 of the NPO Law concerned only persons substituting those holding government or municipal positions or other positions in government or municipal services. They were unable to sit on the governing bodies, on the trustees or supervisory boards and in other corporate bodies of foreign non-government non-profit organisations and their divisions operating in the Russian Federation unless otherwise provided by an international treaty or Russian laws. With the same reservations in place, the mentioned persons were prohibited from engaging in any paid activities funded exclusively at the expense of foreign states, international and foreign organisations, foreign nationals and stateless persons.

This rule remains in place, but another one has been added to it that applies to all natural persons and legal entities: according to the newly added part 1 of art. 30.1 of the NPO Law, natural persons and legal entities may take part in the activities of a foreign non-government non-profit organisation in the Russian Federation starting from the date it registers a structural unit (a division of such organisation) in the manner prescribed by art. 13.1 of this law or from the date information on the branch office or representative office of the relevant organisation is entered on the register of branch offices and representative offices of international organisations and foreign non-profit non-government organisations in the manner prescribed by art. 13.2 of this law.

There is an exception to the rule: according to part 2 of art. 30.1 of the amended NPO Law, a person can take part in the events of a foreign NPO from the date the authorised body publishes information on its official website on the holding of the event provided that such NPO is invited to take part in the event in Russia in the manner prescribed by the NPO Law by a person authorised to make such invitations (these are various organisations set up or controlled by the state).

It appears that in all other cases a common rule applies: natural persons and legal entities in Russia cannot take part in the activities of a foreign non-government NPO unless such organisation has a presence in Russia.

Does the law stipulate liability?

Yes, both administrative and criminal. Ancillary laws introduce new corpus delicti into the Russian Administrative Offences Code and Russian Criminal Code.

Federal Law No. 412-FZ of 4 August 2023 introduces a new article 19.34.2 to the Russian Administrative Offences Code that stipulates administrative liability for just taking part in the activities of a foreign or international non-profit non-government organisation in the Russian Federation where information on the structural units of such organisation is missing from the register of branch offices and representative offices of international organisations and foreign non-profit non-government organisations or where such organisation does not have a structural unit (a division) registered in the Russian Federation in the manner prescribed by the Russian legislation on non-profit organisations (except where such participation is permitted by the Russian legislation on non-profit organisations) provided such activities do not meet the criteria of a criminally punishable act. For foreign nationals and stateless persons, in addition to fines, the law provides for potential administrative deportation.

Federal Law No. 413-FZ of 4 August 2023 introduces a new article 330.3 to the Russian Criminal Code that stipulates criminal liability for just taking part in the activities of a foreign or international non-profit non-government organisation in the Russian Federation where information on the structural units of such organisation is missing from the register of branch offices and representative offices of international organisations and foreign non-profit non-government organisations or where such organisation does not have a structural unit (a division) registered in the Russian Federation in the manner prescribed by the Russian legislation on non-profit organisations; and such liability is stipulated for a person who has been held administratively liable for committing an administrative offence under art. 19.34.2 of the Russian Administrative Offences Code two times during a year or for a person who has a criminal record of committing an offence under this article or art. 284.1 of the Russian Criminal Code (concerning undesirable organisations) (except where such participation is permitted by the Russian legislation on non-profit organisations). Liability is also stipulated for organising the activities of such organisation. A person may be released from liability if such person voluntarily stops taking part in the activities of the relevant NPO and actively assists in solving and/or investigating a crime.

What is the problem and how does it relate to IT?

The notion of “taking part in the activities of a foreign or international non-profit non-government organisation in the Russian Federation” is not clarified and, if interpreted literally, may include — by form — not only participation in the governance of such organisation or in the arrangement of such governance, but also participation in the events and other activities of the organisation, and — by substance — not only social and political activities, but also any other activities. An explanatory note to the relevant draft law states that the restrictions are not in any way related to any restrictions on politically oriented NPOs, but it mentions the common goal of preventing a foreign non-profit non-government organisation from taking part in the activities in Russia if information on its structural units is missing from the register.

The Commission for Legal Support to the Digital Economy of the Moscow’s office of Russia’s Lawyers Association specifically emphasises that currently, from a purely legal perspective, any forms of cooperation with foreign non-profit organisations may be found illegal, including, for example, any activities associated with open source product development projects. Large open source projects that are being developed as part of the activities of non-profit organisations include Linux distros and many other projects (for example, the Firefox browser or the Python programming language). Even though this does not mean that something of the kind will necessarily take place in practice, especially considering the significance of certain open source projects, such risk may not be ruled out from a legal perspective.

What to do and what to expect?

The very least that you can do is take account of the amendment that was not widely covered in the media.

According to information available to us, in August-September 2023, the Commission for Legal Support of the Digital Economy of the Moscow office of Russia’s Lawyer Association was working on amendments aimed at rectifying the existing uncertainty.

In our opinion, these amendments do have potential as, due to the broad wording, there are concerns not only for organisations associated with open source projects, but for many others not engaged in social and political activities, such as, for example, organisations operating in other sectors of technology development and cooperation, education, religion, etc.