Privacy & Information Security Law Blog

On December 31, 2014, Russian President Vladimir Putin signed legislation to move the deadline for compliance to September 1, 2015, for Federal Law No. 242-FZ (the “Localization Law”), which requires companies to store the personal data of Russian citizens in databases located in Russia. The bill that became the Localization Law was adopted by the lower chamber of Russian Parliament in July 2014 with a compliance deadline of September 1, 2016. The compliance deadline was then moved to January 1, 2015, before being changed to September 1, 2015 in the legislation signed by President Putin.

The Russian law firm ALRUD reports that the Localization Law creates a new obligation to store personal data of Russian citizens in Russia, meaning that companies located outside Russia “will be forced to place their servers within Russia if they plan to continue making business in the market.” The exact purview of the Localization Law is somewhat ambiguous, but the law requires data operators to ensure that the recording, systemization, accumulation, storage, revision (updating and amending), and extraction of personal data of Russian citizens occur in databases located in Russia. As an example of the ambiguity regarding the scope of the Localization Law, it is unclear whether the law applies to companies that collect personal data from Russian customers but have no physical presence in Russia. In addition, it is unclear whether the law will affect the cross-border transfers of personal data from Russia to foreign jurisdictions.