The payment of the remuneration for the free reproduction of audiovisual works for the private purposes

Since 2010, in Russia there has been a legal norm obliging the manufacturers and importers of theequipment and material media to pay the remuneration for the free reproduction of audiovisual works forthe private purposes.It is worth noting that such payments are also collected in other states. The remuneration essence is thatthe right holder should receive the remuneration for the private use of an audiovisual work. The amountset shall be paid by direct users indirectly: it is added to the value of the equipment or material media, bywhich the audiovisual works are reproduced. The direct responsibility for the payment of theremuneration shall rest with the manufacturers and importers of the equipment and material media.The world practice of collecting payments for the use of works for the private purposesIn the foreign legislation there is not a unified scheme for paying the remuneration for the reproduction ofaudiovisual objects for the private purposes. For example, in Luxembourg and Australia, the fees for thefree use of a private nature are not collected. In Sweden, Romania and Belgium, in addition to themanufacturers and importers, the wholesalers are among the payers. In a number of countries there arefixed payments, the amount of which is regularly revised (France, Hungary, Germany), while in othercountries the remuneration is set in the amount of the interest rate from the selling price (Japan, Poland,Greece and others). ¹The legislative regulation of collecting payments for the free reproduction in the RussianFederationIn Russia, the provisions on the payment of the remuneration for the use for the private purposes for thefirst time were legally enshrined in Article 26 of Law of the Russian Federation of 09.07.1993 No. 5351-1“On Copyright and Related Rights.” This norm has lost its force after the introduction of Part 4 of theCivil Code of the Russian Federation. Article 1245 of the current Civil Code of the Russian Federationduplicates the provisions, which have been in force previously.Having analyzed the legislative norm, the following can be identified:• The subjects who are entitled to receive the remuneration. They are the authors, performers andmanufacturers of phonograms and audiovisual works.• The persons whom the payments are collected from. These are the manufacturers and importers of theequipment and material media used for the reproduction of a private nature.• The exceptions with respect to the objects for the implementation of which the fees are not collected.These include the equipment and material media manufactured for the export purposes and theprofessional equipment.The provisions of Article 1245 of the Civil Code of the Russian Federation have not been applied till2010, when the Government of the Russian Federation issued Resolution No. 829 “On the Remunerationfor the Free Reproduction of Phonograms and Audiovisual Works for the Private Purposes.” Theprovisions of the said legal act contain:• the amount of the remuneration paid;• the list of the equipment and material media, for which the payments shall be paid;• the procedure for collecting the remuneration.The organization authorized to collect the remuneration for the reproduction of audiovisual worksfor the private purposesAccording to Paragraph 2 of Article 1245 of the Civil Code of the Russian Federation: “The collection offunds for the payment of the remuneration for the free reproduction of phonograms and audiovisual worksfor the private purposes shall be implemented by an accredited organization.”The only structure authorized to collect the said payments is the All-Russian Social Organization theRussian Union of Right Holders (hereinafter referred to as the “RURH”). In 2010, according to Order ofthe Federal Service for the Supervision of the Observance of the Legislation in the Field of Protection ofthe Cultural Heritage of September 24, 2010, No. 167, the RURH received the state accreditation forexercising authority for collecting the remuneration for the reproduction for the private purposes. In 2015,by Order of the Ministry of Culture of the Russian Federation No. 2440 of September 18, 2015, theaccreditation of the Union was extended for 10 years.The amount of the payments and the distribution of the funds receivedThere are two ways of calculating the amount of the remuneration payable:• A fixed amount payable shall be set;• The manufacturers and importers shall pay a certain percentage of the selling price or the import price ofthe equipment and material media.In Russia, the percentage method of calculating the necessary payments is used. According to Paragraph 1of Article 1245 of the Civil Code of the Russian Federation, the procedure for collecting the remunerationand its amount shall be set by the Resolution of the Government of the Russian Federation. The currentinterest rate is 1% of the total value of the equipment or the material medium, which can be used for thereproduction of audiovisual works for the private purposes.Paragraph 3 of Article 1245 of the Civil Code of the Russian Federation shall set the following percentagedistribution of the paid remuneration with respect to audiovisual works:• 40% – to the authors of the audiovisual works,• 30% – to the performers, whose performance is recorded in the audiovisual works,• 30% – to the manufacturers of the audiovisual works.The development of the institution of payment of the remuneration for the reproduction ofaudiovisual objects for the private purposesAccording to the annual report of the RUSH, in 2016 the amount of the remuneration collected was2,680,749 roubles. In 2010, when the Union was established, such amount was 38,099 roubles. ² Theincrease in the payments received is due to the increase in the number of the agreements concludedbetween the RURH and the right holders and the agreements concluded between the RURH and theremuneration payers. The identified trend indicates that each year the number of the right holders whoimplement their right to the remuneration for the reproduction for the private purposes is increasing.

It should be noted that simultaneously with the beginning of the collection of the payments the attempts tostrike down the operation of the acts, which provide such a possibility, have also appeared. The lastinitiative found its expression in the draft law submitted for consideration by the State Duma Council onMarch 26, 2018. The Member of the State Duma Committee upon the State Construction and theLegislation Sergei Ivanov came up with a proposal to strike down the compensatory payments for the freereproduction for the private purposes, arguing that the users paid the remuneration to the right holders ofthe audiovisual works, when they acquired them, and there was no need to pay again. Thus, there is apossibility of striking down the payments of the remuneration for the free reproduction for the privatepurposes. ³

Bibliography:

1 See the details: Kovtun E.V., Kovalenko E.V. The system for collecting and paying the remuneration to right holders for thefree reproduction of phonograms and audiovisual works for the private purposes: problems and prospects 

2 The RUSH Report for 2016 

3 “Tax on Blanks” can be struck down // the Parliamentary Newspaper of 26.03.2018