Social security fees must be paid from royalties collected in behalf of authors by collecting societies in Russia. Russian CMOs have not paid these social security fees to Russian pension fund within three last years. According to letter obtained by Vedomosti, and written by Anton Dronov, chairman of Russian Pension Fund, to Andrey Pudov, deputy of minister of labor and social security, Russian state pension fund wants to get these monies.
Despite the relevant amendments in Russian law, adopted in 2012, there is no opportunity to realise designed intention in practice. Russian collecting societies believes they are not obliged to pay social security fees under current Russian law because they are not employers or licensees in relation to authors of works. But Drozdov does not agree with such point of view. He believes that current Russian law about social fees provides an obligation to pay social security fees for all persons paying remuneration to natural persons and legal entities. Object of social security fee is not only salary payable under labor contract, but also any other payment to natural person. If collecting societies pay remuneration to right holders for exercising of their copyright, they are payers of social security fees, believes Drozdov. Representative of Russian ministry of labor explained to Vedomosti that CMO, paying remuneration under licence agreements concluded with licensees, is payer of social security fees; these fees are to be paid from remuneration payable to authors of works, 22% of these fees go to Russian pension fund, 5.1% of these fees go to Russian mandatory medical insurance fund.
Some CMOs have notified Russian pension fund that within the three years period (2012-2015) they did not change provisions of their membership agreements and “did not enlarge sums of royalties payable to authors in order to pay social security fees”. Drozdov required Russian ministry of labor to explain what exactly is source of these social security fees payable by Russian CMOs, at the same time “taking into account existing debts”. Russian CMOs pay social security fees in relation to their employees, but not in relation to their members and other right holders, who are not their members (state accreditation). In letter it was also mentioned approximately calculated sum of social security fees for three years period (2012-2015) – it is about one billion roubles. But actual sum of debts can be determined only after duly organised and executed inspection.
But there is one thing – state accreditation. Under this authority accredited by state collecting management organisation collects money for public performance right on behalf of all authors in the world: right holders, who concluded membership agreements, and right holders, who did not concluded membership agreement even if they reside abroad and are not citizens of Russian Federation (it is not about reciprocal agreements). It can be easily if accredited CMO does not know, for example, the person of author whose work has been broadcasted and monies have been paid for by user to this accredited CMO. But there is a much worse problem. When CMO collects royalty under state accreditation for public performance right on behalf of author who is not its member and receives royalty on its bank account the question arises what is should do. First of all, CMO is not able to pay collected royalty to author, who is not its member, due to absence of relevant written instrument under current Russian law (it can be only membership agreement). If “lucky” does not want to sign membership agreement he will not receive his money – they will “wait” him until membership agreement is signed. Secondly, if accredited CMO has received royalty on its bank account for exercising of certain right by user, the fact of payment receipt gives rise to obligation to pay social security fees according to Drozdov. What accredited CMO should do in such situation?