COVID-19: extension of licences new specific aspects of activities in 2020 that require a permit addressing the issues of the value of net assets of JSCs AND LLCs at the end of 2020

Pepeliaev Group advises that, against the backdrop of the coronavirus COVID-19 pandemic, the Russian Government has established in 2020 new features of licensing, accreditation, evaluation and other procedures related to a company’s activities that require a permit.

On 1 April 2020, Federal Law No. 98-FZ “On amending certain items of the legislation of the Russian Federation in relation to the forestalling and elimination of emergencies” came into force. In accordance with article 17(1)(2) of the above law, the Russian Government has been given powers to establish in 2020 specific features for licensing, accreditation, evaluation, qualifying exams and other procedures that require a permit to be issued as provided for by Russian legislation.[1] In furtherance of the above article of the law in question, the Russian Government’s Resolution No. 440 dated 3 April 2020[2] (“Resolution No. 440”) has introduced lists of fixed-term licences which will be automatically extended, as well as other specific aspects of companies’ operations that require a permit.

1. An automatic extension of some licences and permits

Resolution No. 440 establishes a list of fixed-term licences and other permits[3] that expire (have already expired) during the period from 15 March until 31 December 2020, and which will automatically be extended for 12 months. Below are the licences and permits which will be extended as stated above:

Licences:

• Licences to produce and sell ethyl alcohol, alcoholic beverages and products containing alcohol (including licences for retail trade in alcohol products);
• Licences to use subsoil resources;
• Licences to provide telecom services, and for TV- and/or radio-broadcasting;
• Licences to carry out private detective (investigation) and private security activities.

Other permits:

• State registration of medicines for veterinary use.
• Permits to use ship-radio stations that are used on sea vessels, inland-waterway vessels and mixed (river-sea) navigation vessels.
• State registration of a medicine for human use.

2. Deferral of deadlines for some conformity procedures

If, while Resolution No. 440[4] is in effect, an individual or a legal entity has to confirm conformity to mandatory requirements and has to perform (undergo) any of the procedures below: (1) having a permit reissued (2) regularly confirm conformity (competency), (3) re-accreditation, (4) re-evaluation, (5) re-certification, or (6) re-examination, and provided that the above activities that require a permit are listed in Annex 2 to Resolution No. 440, the deadline of the above procedures can be deferred for up to 12 months[5].

In particular, this rule applies to the following types of activity that require a permit:

• accrediting a specialist to practice medicine and carry out pharmaceutical activity;
• accrediting legal entities as units of transportation security;
• accrediting legal entities to assess vulnerabilities of transport infrastructure and transport vehicles;
• accrediting legal entities and individual entrepreneurs in the national accreditation system;
• accrediting officers who are engaged in assessing a fire risk;
• an evaluation for performing an expert examination of design documentation;
• an evaluation of experts for performing biomedical expert examination of biomedical cell products;
• evaluation of experts for performing expert examination of medicines;
• issuing a certificate of a private security officer and certification of a private security officer;
• issuing permits to Russian carriers to perform international road haulage;
• state accreditation of educational activity;
• certification of healthcare professionals;
• issuing permission documents for arms trading.

Further, Annex 2 to Resolution No. 440 provides for other forms of activities that require a permit and to which the above rules apply.

Please note that according to Resolution No. 440 a decision to defer the deadlines for conformity procedures is a right rather than an obligation of a relevant state authority and will be made by the latter taking into consideration specific aspects of the public relations where the relevant permit applies. Alternatively, the state authority may decide that a procedure of conformity to mandatory requirements which implies undergoing the above procedures is deemed to be performed by the person in questionand the permit is deemed to be valid.

3. Simplified rules for issuing and reissuing licences and permits

In accordance with Resolution No. 440:

• mandatory field audits of licence applicants and licensees, as well as other field audit measures necessary for obtaining permits or for having them reissued and extended will be conducted with the use of remote instruments of control, such as photo-, audio- and video-recording and video-conferencing.
• The following decisions can be adopted with respect to a type of activity that requires a licence or a permit and is regulated by Resolution No. 440 [6]:

- that the list of licensing requirements be reduced (requirements for the activity or actions with respect to which the permit was obtained);

- that applications and other materials necessary to issue, reissue and extend permits be filed and accepted electronically, and interaction with applicants will be conducted electronically on a temporary basis.

• Licences and permits listed in article 12(1) of the Federal law “On licensing certain types of activity”, as provided for by Annexes 1 and 2 to Resolution No. 440 do not require the reissuing of the licence or a permit in the following cases:

- a change of a legal entity’s legal address* (residential address of an individual entrepreneur);

- a change of the place* of licensed activity or of activity with respect to which a permit was issued

(*where such changes are due to a change of the name of the geographical area, street, square or another territory, or the change of numbering);

- a reorganisation of a legal entity in the form of a transformation, consolidation or a merger.

4. Specific aspects of application of a legal procedures that require a permit to be issued

Resolution No. 440 has established the following specific aspects of the application of legal procedures that require a permit to be issued:

Town-planning activity

• The validity* of a construction permit will be extended for 1 year.
• The validity* of qualification certificates giving right to issue expert's opinions on design documentation and/or on the results of engineering surveys will be extended from 5 years to 6 years.
• The period of use* of an area planning design and the development plan for a land plot will be extended for 1 year for the purposes specified in para 4 of clause 1 of Annex 3 to Resolution No. 440.
• The period of use* of information set out in the development plan for a land plot will be extended for 1 year for the purposes specified in para 5 of clause 1 of Annex 3 to Resolution No. 440.

* If the above deadlines expire during the period from 6 April 2020 until 1 January 2021. The deadlines will be extended automatically.

• In accordance with Annex 3 to Resolution No. 440, other specific aspects have been established with respect to the activity in this sphere.

The use of subsoil resources

• Resolution No. 440 (Annex 4 to it) stipulates that in 2020 the right of use of subsoil resources will not be terminated, including owing to the expiry of the validity period stated in the relevant licence.

Industrial safety of hazardous production facilities

• Further to a decision of heads of organisations operating hazardous production facilities or heads of detached units of legal entities, hazardous production facilities will be operated, up to 1 July 2020, without any expert examination of the production safety of technical devices used at such production facilities, or in buildings and structures located on them.
• After 1 July 2020, an expert examination of the industrial safety of technical devices used at hazardous production facilities can be performed with the use of means of remote interaction between experts in industrial safety and employees of organisations that operate such hazardous production facilities.
• Fire explosive facilities and chemically hazardous production facilities of hazard classes I, II and III will be operated and activity connected with the circulation of industrial explosives will be carried out without having the relevant licences reissued in connection with the change of an address where a licensed activity is performed as indicated in the licence.
• In accordance with Annex 5 to Resolution No. 440, other specific aspects have been established with respect to activity in this sphere.

Security of hydrotechnical facilities

• Hydrotechnical facilities are temporarily operated without their owners and/or operating organisations submitting to a relevant supervisory authority a declaration of safety with respect to hydrotechnical facilities, or in the absence of a state expert examination of such declaration being conducted.
• In accordance with Annex 6 to Resolution No. 440, other specific aspects have been established with respect to activity in this sphere.

Appraisal activity

• The validity period of appraisers' qualification certificates will be extended: (1) by 6 months - for qualification certificates issued before 31 October 2017; (2) by 3 months - for qualification certificates issued between 1 November 2017 and 31 January 2017.
• Qualification certificates that were issued earlier will not be reissued in connection with their validity periods being extended.
• A 6-month moratorium has been introduced for practising appraisers to confirm their qualifications by passing a qualification exam in appraisal activity.
• In accordance with Annex 7 to Resolution No. 440, other specific aspects have been established with respect to activity in this sphere.

The electric power industry

• The actual voltage and power are temporarily accepted (supplied) when electric power receivers, electric power generation facilities and electric grid facilities owned by grids and other persons are connected to electric grid facilities, or when a heat supply facility is temporarily connected, without any permit being obtained from a competent state authority authorising the operation of the above facilities.
• No assessment of knowledge of occupational or other safety requirements for organisations and for work performed at electric plants will be conducted until 1 October 2020.
• In accordance with Annex 8 to Resolution No. 440, other specific aspects have been established with respect to activity in this sphere.

Protection of the health of the public

• Medical care aimed at preventing, diagnosing and treating the new coronavirus infection is provided by medical and other organisations included in the list of medical and other organisations that are planning and/or performing medical care aimed at preventing, diagnosing and treating the new coronavirus infection based on the medical licences they maintain, without the need to have these reissued.
• The Russian Healthcare Ministry may approve minimum requirements for medical care aimed at preventing, diagnosing and treating the new coronavirus infection.
• In accordance with Annex 9 to Resolution No. 440, other specific aspects have been established with respect to activity in this sphere.

Educational activity

• State accreditation has been extended for 1 year for educational programmes implemented by organisations engaged in educational activity, where such state accreditation certificates expire between 15 March and 31 December 2020.
• In accordance with Annex 10 to Resolution No. 440, other specific aspects have been established with respect to activity in this sphere.

Accreditation in the national accreditation system

• Accredited testing laboratories (centres), inspecting authorities and subordinate state and municipal authorities are entitled in 2020 to conduct research, tests, measurements and conformity assessments in connection with measures to protect public health and prevent harm to the health and life of the public given the threat of the new coronavirus infection spreading, in accordance with the documents setting out the rules and methods for such research, tests, measurements and inspections not included in the approved scope of accreditation, where they do not have to undergo the procedure to extend such scope of accreditation, provided that they comply with accreditation criteria when they perform their work.
• The deadlines will be extended for accredited entities to undergo the procedure to confirm their competences where such procedures are due in 2020: (1) for accredited certification authorities and testing laboratories engaged in mandatory conformity procedures, except for state and municipal authorities, – by 6 months; (2) for other accredited persons – by 12 months.
• In accordance with Annex 11 to Resolution No. 404, other specific aspects have been established with respect to activity in this sphere.

What to think about and what to do

Organisations engaged in licensed activities or other activities that require them to obtain permits from state authorities are advised, when they do business or plan their business processes, to take into account the new rules regarding the validity periods of permits and licences, as well as of the specific aspects of procedures when such permits need to be issued as stipulated by Resolution No. 440.

Help from your adviser

Pepeliaev Group's specialists are closely monitoring any changes in legislation in connection with the current epidemic situation and are ready to provide any support to business when companies carry out activities that require permits. We are ready to audit your current licensed activity as to its compliance with licensing requirements, assess whether you need to obtain a relevant permit or a licence, apply, on your behalf, to a state authority in order to obtain such permit or licence, draft any documents necessary, and advise you on any issues arising in connection with companies applying legal procedures where permits are required, undergoing accreditation, or carrying out licensed activities.