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Reform of collective rights management in Russia

Russian ministry of communication (MinCom) has proposed to reform collective management in Russia as reported by vedomosti. MinCom prepares amendments to Russian Civil Code in order to abolish non-contractual collective management. Such amendments caused by imperfection of existing collective management system in Russia. The lack of transparency in a system of royalty collection, allocation and distribution and the lack of control over CMO for right holders are among the reasons why reform is necessary. MinCom wants CMO to work directly with right holders, i.e. under MinCom’ intention CMO, in order to manage someone’ rights, must conclude direct agreement with right holder. MinCom considers two possible ways of reform. The first is to abolish non-contractual right management. The second is more global: reduce commission rate (now it is about 40%) and appoint state organisation to collect private copying levy. According to deputy of minister of communication Alexey Volin, right holders are unhappy with current system of collective management. He thinks that it would be much better if author will have opportunity directly and at his own negotiate with CMO. It is not good, if the right holder is like serf and his rights are managed without his authorisation.

But Russian Ministry of Culture (MinCult) is not agree with MinCom and does not support proposed reform. MinCult’ viewpoint is that the right holders will not be in good position under this reform – they will stay without any opportunity to control exercising of rights in their relevant IP objects in Russia and overseas (TV, Radio, restaurants and cinemas). Broadcasters will also suffer. They must conclude hundreds of licencing agreements with many organisations in order to use relevant IP objects and each such organisation will set its own conditions and rates. Radio stations will also face problems with repertoire available for broadcasting. They will broadcast only such music they have obtained licences therefor. In other words, it would be better if users like broadcasters will work with one accredited CMO (which manages right in world repertoire under current accreditation) rather than with many CMO (which will manage rights in certain repertoire under direct agreements with right holders). MinCult also pointed out that MinCom does not have authority to propose any reform in a field of copyright including collective management.

CEO of Russian Authors Society (RAO) Sergey Fedotov is not agree with MinCom. He believes current system of collective management is not unique. Such system of non-contractual management exists in different countries with success. Fedotov also believes such system of collecting management is the best for Russia. Collective management based on a direct contract with right holder will lead to chaos. Many CMO – low licence rates – low royalties.

But not only MinCom wishes changes in collective management. Russian president Vladimir Putin has instructed Prime Minister Dmitry Medvedev and first Vice Premier Igor Shuvalov to develop amendments to Russian legislation to make CMO’ work more transparent. Both have time till 15th of September. Russian president believes control over CMO must be in state hands. For these purposes supervisory board must be established. Among the members of such board should be representatives of state bodies, cultural organisations, right holders and users. Putin also believes that independent audit of accredited Russian CMOs (RAO, VOIS, RSP) is necessary. President’s instruction contains requirement to provide new standards of reporting by CMO (how CMO spent moneys, how much it has collected, distributed and to whom) and proposition to set up “regulation of price parameter of operation” in relation to CMO.