CIS Legal Update - May 2013: Developing Russia’s Military-Industrial Complex

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On October 16, 2012 the President of the Russian Federation signed a federal law establishing the Advanced Research Foundation (“ARF”)1 , a specialized legal entity that will be responsible for research and development in the military-industrial complex. The idea for the ARF was first introduced by then-President Dmitry Medvedev in 2010, who noted that the Russian Federation did not have an effective state apparatus for the support of defence research and development similar to the United States’ Defence Research Projects Agency (DARPA). In this context – and in accordance with the federal law – the ARF will be responsible for evaluating possible threats to national defense and devising ways to mitigate them. Moreover, the ARF will have the authority to identify, manage, and finance R & D projects for purposes of state defense.

The ARF is funded directly by the Russian Government and is managed by the Board of Guardians, which is comprised of 15 members, including 7 representatives of the Russian government, 7 representatives of the Russian President, and the General Director of ARF. Mr. Dmitry Rogozin, Vice-Chairman of the RF Government, was appointed the Chairman of the Board of Guardians of ARF. Mr. Andrey Grigoriev, a member of the RF government Military-Industrial Commission, was appointed as the General Director of ARF.

The Russian Government will be the owner of all intellectual property rights acquired by the ARF. However, in order to encourage the practical application of any new technologies developed in the interest of state defence and security, the ARF will be entitled to transfer intellectual property rights to its technologies to various economic sectors of the Russian Federation, and the following state entities:

  • RF federal executive bodies;
  • State Atomic Energy Corporation ROSATOM; and
  • legal entities, designated by the State Atomic Energy Corporation ROSATOM.

The procedure for the transfer of intellectual property rights is subject to the review and approval of the Russian government.

While the adoption of the ARF Federal Law represents a significant first step in developing a military R&D program, it is nevertheless simply just that – a first step. The ARF Federal Law itself only sets forth the general legal framework for ARF activity; any subsequent activity going forward will be governed by initiatives of the Russian government, as well as a wide range of internal acts to be adopted by the Board of Guardians.

According to publicly available sources of information, the ARF was registered on December 21, 2012.

Footnotes

1. The Federal Law of October 16, 2012 No. 174-FZ "On Advanced Research Foundation" (the "ARF Federal Law").