"Russian Federation" out of bounds.
Yesterday the government website published Prime Minister's resolution cancelling the preceding, 1996, version which restricted the use of the words "Russia," "Russian Federation" and "federal" in company and organisation names. However, the use of "state-related" words is as before, regulated by Russia's Civil Code.
The resolution signed by Prime Minister Vladimir Putin replaces the previous one, No. 1463 of December 7, 1996. That document restricted the use of the words "Russia," "Russian Federation" and "federal" and their derivatives in the names of private companies. Only national trade unions, political parties, religious groups and public organisations were allowed to use those words. Other legal entities were required to agree the proposed name with a special government commission. This restriction was aimed at controlling unscrupulous businessmen who chose company names "that differ only very slightly from names of state bodies." That risks misleading their customers, the resolution explained.
Vadim Uskov, head of the law firm Uskov and Partners, said this commission existed only "on paper" and "very few knew about it until recently." He cited as an example the insurance company Rus, which had problems with financial authorities until it provided, in support of its case, the opinion of an expert board of linguists that the company's name did not derive from "Russia." After that the company decided to apply to the government commission, then headed by Valentina Matviyenko, but the commission "either wasn't functioning, or had no regulations in place - in any case it didn't help the insurance company resolve its problem," he added.
The existing restrictions on using Russia-related words in company names will not be lifted, as there is an article in the Russian Civil Code documenting nearly all restrictions that the Prime Minister's resolution invalidated. Thus, article 1473 in Part 4 of the Civil Code which came into effect in November 2008 says that the words "Russia," "Russian Federation" and their derivatives can be included in the names of legal entities, only after the commission's approval.
The commission, headed by Justice Minister Alexander Konovalov, was established on July 1, 2009 by joint order of the Ministries of Justice, Finance, Culture, Healthcare and Social Development, Economic Development, and the Federal Anti-trust Service (FAS).
The first company to officially obtain permission under the Civil Code was Bank Rossiya, which was granted special permission to use the word in September 2009 by a resolution signed by Prime Minister Vladimir Putin (Kommersant, September 23, 2009).
However, other financial institutions, including Rosbank, Russian Development Bank and Russian Capital Bank, are apparently in no hurry to follow suit. This may be because the government should have issued a separate resolution detailing legitimacy criteria for using "state-related" words in company names. Until such criteria are in place the Central Bank is not going to impose any sanctions on the banks, the regulator's spokesman said.
by Alexander Voronov