Payers of private copying levy in Russia realised its imperfections but can’t change it

Currently Russian law requires manufacturers and importers of equipment capable of copying a copyrighted content to pay private copying levy. Nobody from “taxpayers” likes this levy, and pays it reluctantly. What they can do? File a suit? Yes, Russian law allows it to challenge system of private copying levy in court and there is a defendant. But they always chose wrong defendant and lost.

Representative of payers of this levy in Russia wrote a letter and asked Russian minister of culture to find out how Russian Union of Right holders (RSP), accredited state organisation collecting mandatory private copying levy in Russia, collects levy from importers and manufacturers of taxable equipment. RSP requires levy for such equipment which is not a subject to private copying levy.

RSP collects levy from household electronics and from professional equipment (servers, working stations etc.) despite the governmental prescription that professional equipment is not a subject of private copying levy. Such RSP’s practice has been called in the letter a “one of the most widespread malpractice from the part of accredited state organisation”.

The list of taxable equipment has been formed under customs codes mentioned in governmental decree. But the governmental decree imposes private copying levy on equipment used by private persons for their private purposes, unlike the professional using equipment for business purposes. But how to define it? Importers and manufacturers in Russia don’t think about; even to propose to government to think about.

Business believes for RSP is only one factor is leading for collection of levy – equipment must comply with customs codes. “RSP arbitrarily requires importers to pay levy, and subsequently sues them in relation to any equipment, which is formally complies with customs codes regardless of specific and features of such equipment” states the letter. But earlier the author of this letter believed that taxpayer must prove in court that certain equipment is not taxable. It seems he changed his position.

The fact that almost all disputes in courts between RSP and importers have been lost by importers disappoints business. “Despite obviously unjustified RSP’s requirements, technical and factual groundlessness, the courts almost automatically grant any requirements of accredited organisation (RSP).” The courts don’t take into consideration evidence of importers.

But it is not all accusations in relation to RSP and system of private copying levy in Russia. The letter also states that RSP pushes the industry. RSP requires enforcement authorities to open criminal or administrative cases. “It is obvious for us, the system of royalties collection should be changed. It is not suitable for manufacturers and for many participants of this system – including authors and performers, receiving remuneration”, – stated representative of RATEK (association of trading companies and manufacturers of electronic, computer and household goods).

Russian ministry of culture proposed to take into account constructive features of taxable equipment for purposes of private copying levy. It has even drafted amendments to governmental decree. Ministry intended to introduce its amendments till the end of 2016. Currently it is 2017 and substantially nothing changed.