Protecting Commercial Secrets in Russia

In today’s highly competitive global market, protecting commercial secrets is essential for maintaining a company’s edge. For both domestic firms and foreign investors operating in Russia, understanding and complying with the legal framework is crucial. Russia’s Federal Law No. 98-FZ of July 29, 2004, outlines clear guidelines for identifying, handling, and safeguarding commercial secrets.

What Are Commercial Secrets?

Commercial secrets refer to confidential information with actual or potential economic value that is not publicly known. This includes technical data, business strategies, production methods, and client databases. To qualify for protection, such information must be deliberately kept secret and appropriately marked typically with a “Commercial Secret” stamp.

Legal Framework and Key Responsibilities

Businesses in Russia have the right to define what constitutes a commercial secret, provided they take steps to protect it. This includes:

• Restricting Access: Only authorized individuals should have access, with confidentiality agreements in place.
• Employee Obligations: Employees must maintain confidentiality during and after employment, with violations potentially resulting in disciplinary, civil, or criminal penalties.
• Information Transfer: Sharing sensitive data must be covered by clear legal agreements to ensure confidentiality.
• Proper Marking and Storage: Sensitive documents must be marked and safeguarded using both administrative and technical means (e.g., encryption, access logs).

Exclusions: Certain Information Cannot Be Classified as Commercial Secrets

Some types of information must remain publicly accessible and cannot be treated as commercial secrets. These include:

• Legal documents of companies
• Business operation permits
• Public enterprise property details
• Labor conditions
• Government auction information

These exclusions are designed to protect transparency and uphold public interest.

State Oversight and Legal Compliance

Russian state authorities can request access to commercial secrets only under legally justified circumstances. Businesses must comply with valid requests or risk legal action, though they may challenge improper demands in court. Public officials are strictly prohibited from using or disclosing commercial secrets for personal gain.

Consequences of Breaches

Unauthorized disclosure of commercial secrets, whether by employees, partners, or officials, carries serious consequences. These range from financial damages to criminal prosecution. However, accidental or non-malicious access generally does not result in liability.

Conclusion

For any business, especially foreign investors in Russia, protecting commercial secrets is not just a strategic necessity, it is a legal obligation. By understanding and adhering to Russia’s commercial secrecy laws, companies can secure their sensitive data, reduce legal risks, and operate with confidence in a competitive market.