A new experimental legal framework for AI startups in Moscow

06 March 2020

A new draft bill[1], popularly backed by Russia's IT community, was introduced in the Russian State Duma in early 2020 on implementing an experimental legal framework in Moscow for the development of artificial intelligence (AI) projects. The bill is aimed at stimulating the introduction of new technologies in the market and providing  workable regulations for anonymized data. It is expected go into effect this July and remain in force for five years.

The document authorises the creation of special regulatory "digital sandboxes" for testing AI projects. The sandboxes are tools for establishing special legal frameworks for the development and use of technologies that now fall outside of the scope of current regulations - or that even may conflict with existing ones.

The Moscow City Government will oversee the coordination of the whole project. This will include the establishment of: requirements for the development and use of AI technologies, operating procedures for the use of new AI technologies, and conditions for the use of anonymized personal data. Secondary legislation will only apply to participants within this experimental legal regime who are included in an official register of participants for this five-year period. The Moscow government is also authorised to establish a coordinating council that will be responsible for the disposal of collected and processed personal data, and that council will be obliged to submit reports to the Russian government recommending new amendments to existing legislation.

According to the draft bill:

  • A participant must be a legal entity or individual entrepreneur registered in the city of Moscow; and
  • A participant must be a company engaging in the development and implementation of AI technologies, or one that renders services based on such technologies.

In order to be included among the register of participants taking part in this experimental framework, applications must be submitted to the Moscow government or designated authorities.

The draft bill also prescribes for amendments to the Law on Personal Data and allows for the processing of anonymized personal data for the purposes of governmental and municipal management, as well as other purposes outlined within the draft bill.

This new legal initiative has been well received by the Russian IT community and many major tech companies. Existing personal data laws that regulate the processing of anonymized personal data have been  regarded as hurdles in the development of AI technologies. This project is expected to stimulate the implementation and use of new technologies, help reveal flaws in current regulations, and serve as a blueprint for future regulations.

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