FOREIGN TRADE BARRIERS
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Russia banned states and municipalities from purchasing foreign-made automobiles, other vehicles, and
machinery, and banned procurement of a broad array of consumer goods produced outside the EAEU. On
December 31, 2014, President Putin signed the Industrial Policy Law, which specifically promotes import
substitution and restricts government procurement (and SOE purchases) of foreign-made products. The
law went into effect on June 30, 2015, and provided a framework for the support of innovative product
manufacturing, research and development subsidies, and infrastructure projects as well as implementation
of the “Buy Russia” law. The law also includes provisions for financial and material support for Russian
companies to boost their export potential.
To implement the Industrial Policy Law, Russia has established “local content” requirements for a variety
of industrial product sectors, including machine tools, automotive, special mechanical engineering,
photonics and lighting, electrical-technical, cable, and heavy machinery. As a consequence, for example,
some types of metalworking equipment must contain from 20 to 50 percent domestic parts, with increasing
targets each subsequent year. In 2015, Russia reaffirmed the ban on government procurement of a wide
range of foreign-made machinery (e.g., machinery used in the construction and raw material extraction
industries) and certain vehicles (e.g., emergency service vehicles, bulldozers, and excavators). In addition,
Russia banned government procurement of numerous foreign-made medical devices and health-related
disposable goods if fewer than two companies from the EAEU submitted a bid; as noted above, the list of
covered medical devices was expanded in 2016. In August 2016, the Russian government also established
a ban on a list of certain food and dairy products from non-EAEU Member States for government and
municipal procurement including, fresh and frozen fish, fish products, canned fish, salt, beef, pork, veal,
poultry, cheese, cottage cheese, rice, butter, and sugar.
Similarly, pursuant to amendments to Russia’s national procurement law, in 2016, Russia created a registry
of Russian software; foreign-made software not on the list will no longer routinely qualify for government
and municipal procurement, unless there is no similar domestically produced software available. In July
2016, the Russian government went a step further and issued an order that approved a three-year plan to
switch government agencies to Russian office software. In late September 2016, Russia imposed a ban on
the procurement of a range of over 100 types of foreign-made radio-electronic products and components
for state and municipal needs when there are at least two bids for similar items manufactured in Russia or
an EAEU Member State. In addition, Russia has created a Government Commission on Import Substitution
with the mandate to support the production of priority goods, works, and services that are not currently
produced in Russia. (See the section on Import Substitution Policies for more information.)
INTELLECTUAL PROPERTY RIGHTS PROTECTION
Russia remained on the Priority Watch List in the 2016 Special 301 Report. The Report identifies online
piracy, failure to allocate adequate resources to intellectual property rights (IPR) enforcement, manufacture
of and trade in counterfeit goods, and the absence of transparency as some of the significant obstacles to
adequate and effective protection of IPR in Russia. Multinational and U.S. companies continue to report
counterfeiting in the areas of consumer goods, distilled spirits, agricultural chemicals and biotechnology
products, and pharmaceuticals. In 2015, Russian courts began to implement the antipiracy legislation
passed in November 2014, which resulted in permanent blocking of 33 pirate websites, including the
notorious, high-traffic Russian torrent website Rutracker.org, which has been listed in the USTR’s
Notorious Markets Report. However, more sophisticated Internet users still manage to access the blocked
website through various anonymizing tools and “mirror” sites and, as noted in the 2016 Notorious Markets
Report, the site remains one of the most popular in the world as well as a top site in Russia. Finally, in the
pharmaceutical industry, Russia has substantially reduced the effectiveness of its regulatory protection of
test and other undisclosed data, and its system is not transparent.