Foreign companies are planning to prohibit owning critical infrastructure

Head of the State Duma IT Committee Leonid Levin



On Tuesday, January 24, the State Duma of the Russian Federation in the first reading adopted the draft law “On safety of the critical information infrastructure of the Russian Federation” . To the second reading in the text of the document proposed to make changes. So, one of them will be a complete ban on the ownership of critical infrastructure by foreign companies, according to Izvestia. The initiator of the possible ban is the relevant committee of the State Duma on information policy, information technology and communications under the leadership of Leonid Levin. It was he who proposed to discuss the introduction of “restrictions for owners and users of critical information infrastructure facilities”.



From the conclusion of the committee it follows that the amendments will include companies with foreign participation or affiliated with foreign states, international and non-governmental organizations. At the same time, the committee claims that ignoring this issue can lead to threats to the information and national security of the Russian Federation.



According to the text of the draft law, the critical infrastructure includes information and telecommunication systems in:

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• government agencies;
• defense industry;
• health care;
• transport;
• communication;
• credit and financial sphere;
• energy;
• fuel industry;
• nuclear industry;
• rocket and space industry;
• mining and chemical industry;
• metallurgy.

In addition, automated control systems at the enterprises of the above areas will be counted as critical infrastructure. All significant objects are proposed to be included in the next special registry.



With these amendments, officials want to achieve the opening of legal representative offices of companies with access to critical infrastructure in the territory of the Russian Federation. This is done in order to increase the transparency of their activities, to collect taxes and to have “on hand” top officials who could be held accountable.



“We believe that companies that own or dispose of critical infrastructure should be legal entities in Russia,” Leonid Levin, head of the State Duma’s IT Committee, told Izvestia.



But there is a negative side to this approach. For example, telecom operators recognize that part of the infrastructure, which they want to recognize as critical, was created by foreign companies on their order. Moreover, its maintenance is also performed by its creators on the principle of outsourcing.



“Foreign manufacturers have taken care of themselves. Like, why do you have to suffer with what you have no competencies, we have developed this system. Therefore, it is important how the new requirements will be formulated and how to monitor their implementation, ”said one of the publication’s interlocutors.



In its current form, and with the current wording, foreign manufacturers will have to open legal offices in the country to serve the Russian systems and comply with the new law. As is known, many companies prefer to work from abroad as foreign organizations.



If the amendments are adopted in the second reading in its current form, this may lead to another round of expensive “import substitution” (subject to the availability of similar systems), or a conflict between business and officials, which is already observed around the implementation of the Yarovaya-Ozerova law package.