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Russia
Prize promotions around the world
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- Governing law
Name Law or Code? Russian Civil Code (Part II of 26 January 1996 No. 14-FZ) Code Russian Federal Law on Lotteries (dated November 11, 2013 No. 138-FZ) Law Last modified 9 Jan 2019
- Extra-territoriality
The Code and Law do not contain specific rules on prize promotions offered abroad. As a general rule, promotions offered to Russian parties from abroad will be subject to the same treatment as those offered in Russia (in part of any mandatory Russian rules constituting 'public order'). Theoretically, the only sanction which can be applied to foreign prize promotions, run online and violating Russian 'public order', is the blocking of the website through which the violating promotion is run. In practice, we have not heard of practical precedents of such enforcement.
Last modified 9 Jan 2019
- Skills competitions
Yes, this is permitted and specifically regulated under the Code. The main requirements set out in the Code are:
- The competition must be directed to the achievement of socially amenable purposes;
- The announcement of the competition must contain, at least, the essence of the task, criteria and procedure of assessment of results, place, term and order of delivery of results, amount and type of award, order and terms of announcement of the competition's results;
- The competition organizer may modify or cancel the competition only within the first half of the set term of delivery and must make the announcement in the same way as the initial announcement. The organizer must reimburse the expenses incurred by participants before such cancellation or modification.
Last modified 9 Jan 2019
- The competition must be directed to the achievement of socially amenable purposes;
- Prize draws
Yes. In this case, the promotion will fall under the definition of 'lottery' (which is regulated differently and separately from skills-based competitions). The main requirements set out in the Code and in the Law are:
- A lottery conducted in Russia must adhere to certain formal requirements and must be registered as such;
- The terms of the lottery must contain the timeframes of conducting the lottery, order of determining the award and its amount and other formal requirements;
- If the timing for payment of the award is not indicated, the award must be paid out not later than 10 days commencing on the date of determination of the results of the lottery (general rule). In case of non-payment the participants may claim the redress of damages in full amount from the organizer.
The refusal to conduct the lottery in the pre-agreed term will give the participants the right to demand the pay out of damages (only real damages, not lost profit).
Last modified 9 Jan 2019
- A lottery conducted in Russia must adhere to certain formal requirements and must be registered as such;
- Selection of winners
In relation to skills competitions, the process of selection of winners and requirements for awarding prizes is determined by the organizer but must be clearly described in the announcement of the competition.
In relation to lotteries, the order of determining the award and its amount must be defined by the organizer and clearly communicated to participants.
Last modified 9 Jan 2019
- Judges
There are no legal requirements in relation to judges or judging for skills competitions. This is entirely determined by the organizer. However, the criteria and procedure of assessment of results must be announced by the organizer of the competition.
Last modified 9 Jan 2019
- Prizes
There are no specific restrictions on prizes to be awarded. However, goods which are generally restricted to the public by law, such as weapons and narcotic substances, cannot be offered as an award.
Last modified 9 Jan 2019
- Registration requirements and fees
Registration Requirements
There are no specific requirements for skill competitions. However, lotteries are subject to the heavy regulatory regime. This means the operator of the lottery (i.e. the entity running the lottery) must agree to a contract with the Ministry of Finance or Ministry of Sports ('organizers of the lottery') on the basis of a preliminary held state tender.
Fees / Taxes Payable
For lotteries, a state fee of 10% is payable to the state budget.
Last modified 9 Jan 2019
- Other local requirements
In relation to lotteries the Law contains certain requirements. For example, there are requirements regarding mandatory state inspections of equipment used by organizers in the running of a lottery. Additionally, every operator of a lottery must order and undergo an annual mandatory audit of its activities in relation to accounting aspects.
Last modified 9 Jan 2019
- Timing
No.
Last modified 9 Jan 2019
- Translations
While there is no express legal requirement for the terms to be translated into Russian, having such translation in place is highly advisable. The organizer may face various issues and even potential legal disputes relating to consumers misunderstanding of the terms if it is not translated into Russian.
Last modified 9 Jan 2019
- Penalties for non-compliance
Aside from the civil damage awards (in the case of any breach of the rules), there may be administrative (or even criminal) sanctions applied to an organizer.
The average sanction is an administrative fine of 200,000 Russian Rubles (approx. US$3,086). The maximum sanction for gross violations is 3 years imprisonment (applicable to officers of legal entities), but it is not likely to transpire in practice.
Last modified 9 Jan 2019
- Restrictiveness of regulations
The skill-based prize promotions are generally subject to soft/mild legal treatment and the applicable legal regulations are not restrictive or onerous.
However, lotteries are subject to a very restrictive and heavily regulated regime (ie mandatory conclusion of a contract with the state authority under the tender procedure, state duties, annual audit. prohibition of lotteries on the Internet).
Last modified 9 Jan 2019
- Regularity of sanctions
Rarely imposed for skill-based competitions.
Fines are imposed more often for violations in relation to lotteries.
Last modified 9 Jan 2019
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