Cleansing continues. Google and Meta against the Kremlin? Property rights, which do not exist

December 28. 2021

Strange logic

Russian Foreign Minister Sergey Lavrov stated that he does not see the possibility of Russia joining NATO. I am ready to agree with this statement, understanding that we are talking about today’s Russia under today’s President Putin (at the beginning of his presidency, Vladimir Putin did not rule out such a scenario). However, Lavrov’s arguments turned out to be quite strange. He believes that Russia cannot join NATO because “the West does not want to have rivals comparable in influence in the international arena.” The idea that Russia might not rival the West does not seem to fit the Minister’s worldview.

Cleansing of the media space continues 

Roskomnadzor, Russia’s internet censor, continues its cleansing of the media environment, seeking to remove any information that’s displeasing to the Kremlin. Late last week, the website of OVD-Info, a human rights media project that collects and disseminates information about political repression in Russia, and coordinates legal assistance for detainees, was blocked.

The court decision to shut down access to the media project was issued by a local court in a small city 140 kilometers from Moscow on the outskirts of the Moscow region. It contained standard wording stating that the information from the media project was aimed at “justifying the activities of extremist and terrorist associations, justifying the actions of members of such organizations.”

Three months earlier, the Ministry of Justice had included OVD-Info in the register of foreign agents. Here is how the Ministry justified this step: “The internet resource ovdinfo.org contains current news about detentions at unauthorized public events, administrative and criminal charges for offenses related to participation in activities of undesirable organizations, reports on freedom of speech and assembly, including joint reports with the interregional public organization Human Rights Center ‘Memorial’ and the Council of Europe media project with a description of the problems in Russian legislation and a detailed list of recommendations for changing Russian legislation.”

The Kremlin actively uses the law on foreign agents to fight against independent media and NGOs. The law does not establish clear grounds for assigning such status, leaving it to the Ministry of Justice. For an organization to be recognized as a foreign agent, it is sufficient for it to receive a minimum amount of funds from any foreign source (including transfers from individuals) and “carry out political activities.” At the same time, the definition of political activity is so broad and vague that it can be interpreted as anything. 

The Russian legislation allows foreign media outlets and NGOs to be given the status of foreign agents. An individual “cooperating with a foreign agent,”—i.e., journalists—can also be called a foreign agent. In addition, the legislation does not allow an organization to take any steps to be removed from the list of foreign agents. 

Google and Meta against the Kremlin?

In February 2021, Roskomnadzor received the right to demand that social networks remove information that is undesirable from the censor’s point of view. In situations of non-compliance with such a demand, the censor draws up a protocol on administrative violations and applies it to the court, which fines the social network. Until recently, the amount of such fines was insignificant. So, during the first six months of the implementation of this practice, the penalties imposed on Meta (former Facebook) totaled 66 million rubles ($890,000), Twitter—38.4 million rubles ($515,000), Google—26 million rubles ($350,000).

But that was only the beginning. In October, Roskomnadzor started making repeated protocols, based on which the courts imposed fines, the amount of which could be from 5% to 10% of the annual revenue of the social network. Last week, the court levied fines of about 2 billion rubles ($27 mln) and over 7.2 billion rubles ($96.6 mln) on Meta and Google, respectively. Of course, the ruling won’t be enforced immediately. To begin with, Meta and Google will challenge these decisions, which will take several months. In addition, neither of these companies has a Russian legal entity that consolidates revenues generated in Russia, and it is unlikely that it will be possible to collect Russian fines in California.

But there should be no doubt that the Kremlin intends to see this case through to the end. On the one hand, in early 2022, a law will come into force in Russia that requires social networks to create Russian legal entities to conduct their activities in the country (the “landing” law). On the other hand, if fines are not paid, Roskomnadzor has the right to slow down and block access to social networks. 

Voluntarily or involuntarily, global social networks are becoming the Kremlin’s primary target in its fight against freedom of speech in Russia. There will be the next presidential elections in Russia in 2024, and Kremlin would like to minimize the media space for political dissidents. That means the next two years will show how far social networks are willing to compromise and yield to pressure from Russian authorities. And the Russian authorities will have to demonstrate whether they are ready to take the most drastic measures and block YouTube, for example, which has become the most essential infrastructure element of the Russian media space.

Total control

In Russia, a system of identification and total control over foreigners now is in place. Starting this week, all foreigners coming to Russia for more than 90 days will have to be fingerprinted and get a registration card with a chip. The holder of such a document will not be able to sign employment contracts without registering in the state information system. He will need to register his place of residence, among other things.

The system of total control will be gradually extended to Russian citizens. The Interior Ministry is creating a centralized biometric data bank of Russians and foreigners in Russia, which, according to Interior Minister Vladimir Kolokoltsev, will be completed by 2023. The system will combine dactyloscopy and phonographic information and DNA-analytical laboratories. To fill the database with data, the Russian government intends to limit the access of Russian citizens and foreigners to a large number of public services.

The flight is over. It’s time to pay

The new Russian narrow-body MS-21-300 aircraft with wings built from Russian composite materials has made its first flight.  

The development and production of the MS-21 have been carried out by the United Aircraft Corporation, part of the Rostec State Corporation, since the early 2000s. The total cost of the project amounted to at least 470 billion rubles (approximately $7 billion, taking into account exchange rates in different years), but this is not the final count: Prime Minister Mikhail Mishustin said that “on behalf of the President we will send additional 61 billion rubles ($825 million) for the development work on the MS-21 project, as well as import substitution of components, production, and after-sales service of the planes.”

According to the Rostec data, the share of the composite materials in the MS-21 design makes up about 40%, which is the maximum level for the narrow-body planes. Such materials allowed the creation of the wing with improved aerodynamics, increased the aircraft’s fuselage width, and expanded its interior.

The aircraft was originally planned to use American composite materials. In September 2018, the U.S. Department of Commerce imposed sanctions on Rostec’s subsidiary, “Aerocomposite,” and the supply of materials from the United States fell under the ban. It took two years to develop and start the production of Russian composite materials.

“Rostec” claims that the first MS-21 plane will start passenger flights at the end of 2022, that annual production will be 36 aircraft, and that by the end of 2023, the aircraft will be certified by EASA.

Convenient, but...

Valentina Kazakova, head of the Russian Interior Ministry’s Migration Department, said Russia will begin issuing “electronic passports” in 2023, with the same legal force as the traditional paper passports inherited from the Soviet Union. Plastic cards will contain a chip that will keep all data from the paper passport. 

On the one hand, I cannot but rejoice that the life of Russian citizens will be a little easier, and they will not have to carry around paper passports, easily corrupted. On the other hand, I cannot understand why the Ministry did not decide to combine two documents—driving license and “e-passport”—both controlled by the Ministry. Besides, as a citizen, I am much more impressed with the solution used in Ukraine, where citizens can store all essential documents issued by the state, including passport and driving license, in an app on their smartphone.  

Property rights, which do not exist

The General Prosecutor’s Office of Russia has filed a lawsuit demanding to revert the privatization of Kuchuksulfat, which took place almost 30 years ago. The company is located in Altai Krai and is Russia’s only producer of natural sodium sulfate. Its annual revenue in 2020 was 2 billion rubles ($27 mln).

The prosecutor claims that the privatization was illegal because the law did not allow for the privatization of mining companies without the permission of the Russian government, while all decisions to privatize the company in 1991-1993 were made by local and regional authorities. Representatives of Kuchuksulfat expect to convince the court that the plant belonged to the chemical industry, not the mining industry and that the regional authorities were authorized by the federal government to take their actions. In addition, they talk about missing the limitation for the lawsuit, which, in this case, is three years. 

The law prescribes that the limitation period begins when the Russian Federation “through any of its bodies” learned or should have learned of the violations in the privatization procedure. The documents available to the company show that in the 1990s, the Prosecutor’s Office checked the privatization procedure several times and found no violations.

Nevertheless, I have no reason to hope that the company owners will defend their rights. Exactly one year ago, the privatization of the Bashkir Soda Company was reverted on similar grounds. At that time, the prosecutor convinced the court that neither the Prosecutor’s Office nor any other authority in the Russian Federation knew about the company’s privatization. It is unclear what will prevent the Prosecutor’s Office from using the same arguments that the court found persuasive!  

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