Looking at the EU's 12th package of sanctions: focus on IT

25 January 2024
Law Messenger
On 18 December 2023, the Council of the European Union adopted its 12th package of sanctions, which will have a significant impact on IT processes in Russian companies. In addition to the previous ban on IT consulting services (including those involving the development and installation of hardware and software), the European Union has introduced restrictions on the transfer of enterprise management, industrial design and manufacturing software to organizations incorporated in Russia.
The software whose use is prohibited includes enterprise management software, defined as systems that digitally represent and manage all ongoing processes, including:

  • Enterprise resource planning (ERP)
  • Customer relationship management (CRM)
  • Business intelligence (BI)
  • Supply chain management (SCM)
  • Enterprise data warehouse (EDW)
  • Computerized maintenance management system (CMMS)
  • Project management software
  • Product lifecycle management (PLM)
  • Typical components of the above, including accounting, fleet management, logistics and human resources software
The new sanctions also apply to design and manufacturing software used in architecture, construction, manufacturing, media, education and entertainment, including:

  • Building information modeling (BIM)
  • Computer-aided design (CAD)
  • Computer-aided manufacturing (CAM)
  • Engineer-to-order (ETO)
  • Standard components of the above

It is also prohibited to provide financing, technical support and other services related to the provision of software. The adopted sanctions will affect widely used programs such as SAP, Microsoft, Autodesk and Oracle. The amendments provide for a transition period, which Russian companies can use to develop and legally formalize new approaches to the software they use.

Thus, until 20 March 2024, actions to terminate already concluded agreements and addenda under which software rights are granted are permitted.

Another important change is that the 12th package of sanctions revises the approach to exemptions from requirements for Russian companies that are subsidiaries of European and Western entities. Subsidiaries of European and Western entities in Russia, without special permission from the regulator, may use the affected software only until 20 June 2024.

In the coming months, special attention should be paid to the termination of licenses: the new sanctions package does not make exceptions for cases where Russian licensees have paid for rights of use for several years in advance. Therefore, one of the legal difficulties that companies may face is the refunding of fees.

Moreover, it is recommended that a careful approach be taken to formalizing legal relations with new contractors-suppliers of software products, taking into account the other details of the sanctions regulation.

The B1 team is ready to provide support on various issues related to EU sanctions in the field of intellectual property, including legal advice on the impact of sanctions on the current activities of companies and the preparation of licensing and other accompanying agreements.

Authors:
  • Natalia Aristova
    Partner
    B1 Legal
  • Anton Sidnin
    Senior Associate
    B1 Legal
  • Polina Bychenok
    Associate
    B1 Legal
Contact us

Learn more about our services by filling in the feedback form, or send us a request for proposal by email. Select the appropriate option.
This website uses cookies to improve your user experience. If you continue on this website, you will be providing your consent to our use of cookies.
Accept