Russian Government Provides Details of Collection Society Overhaul

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The Kremlin in Moscow, Russia photographed on May 7, 2015.

As the fight for control of Russia’s collecting industry continues, the economic development ministry, the main advocate of state control over the sector, has revealed specifics of its proposals.

The agency sent to first deputy prime minister Igor Shuvalov, who is overseeing the reform of the country's royalty collection system, two possible scenarios for government control of the sector, the business daily Vedomosti has reported.

Under one plan, all copyright fee collection, currently managed by the RAO, VOIS and RSP, would be transferred to a new organization established by the government.

The other mandates the creation of a new, state-run collection society that would oversee all types of copyright fees, which would then be distributed to rights holders through a series of other organizations.

Both plans seem to obviate the need for the country's existing collection societies (RAO, the state-accredited society for authors' rights, VOIS, which deals with neighboring rights, and RSP, which collects a one-percent tax on imports of electronic devices that can be used for copying content). 

A government meeting, chaired by Shuvalov, will make a final decision about the industry's future, Oleg Fomichev, deputy economic development minister, was quoted as saying by Vedomosti.

The date of that meeting is yet to be set, he added.

The government became serious about taking control of the collecting sector this past summer, following the jailing of RAO's general director Sergei Fedotov on allegations of fraud related to a real estate transcation. Subsequently, a group of rights holders registered with RAO held a conference that replaced Fedotov with Maxim Dmitriyev, the head of First Music Publisher, but RAO management insists the conference is illegitimate. A court is supposed to resolve the matter.

Meanwhile, rights holders and music industry insiders, although unhappy with RAO, are even less enthusiastic about the government's interference. Last month, they expressed their worries in a letter to Shuvalov.

"The government should create conditions for transparent operation of collecting societies," a source in the Russian music industry told Billboard. "But it should not be directly involved with collection."