New EU sanctions prohibit the supply of software for industrial design and enterprise management
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The European Union has increased pressure on the industrial and technological sectors of the Russian Federation by introducing additional restrictions on the supply of software. First of all, the sanctions affect solutions for industrial design and enterprise management. The new restrictions mean the termination of even those licenses that were purchased several years in advance. However, according to lawyers, the EU will give foreign vendors time to finally sever relations with counterparties and will establish a number of exceptions, for example, for environmental safety reasons.
The 12th package of EU sanctions against the Russian Federation included a ban on the supply of software for enterprise management, as well as for industrial design and production. We are talking primarily about computer-aided design (CAD) systems. These categories, for example, include products from Autodesk (including AutoCAD), SolidWorks, SAP, Oracle, Microsoft, etc. The formulation of EU sanctions may include a wide range of products, including industry solutions, notes Verba Legal advisor Ekaterina Tretyakova.
The listed manufacturers stopped supplying systems to the Russian Federation last year. In the summer it became known that Autodesk was liquidating Autodesk (CS) LLC. In September, SAP told its Russian partners that it would cut them off from supporting its software by the end of 2023 (see Kommersant on September 5).
“Thus, Western vendors have long been closed to the Russian market,” says Nikolai Komlev, Chairman of the Council of the Russian Chamber of Commerce and Industry for the development of the digital economy. “Therefore, the goals of the new sanctions are not very clear.” In some enterprises, foreign software still works, he admits, but is not updated, including due to fears of remote shutdown.
At the same time, Alexey Smirnov, head of the board of directors of Basalt SPO, clarifies that Russian engineering software now occupies only about 30% of the market: “Many organizations implemented their projects in Autodesk or other foreign CAD systems, so support is forced to continue, otherwise everything will have to be developed with zero.” Mr. Smirnov adds that packages of foreign software were purchased from many Russian organizations for a long period of time, so the subscription has not yet been exhausted, but there is no longer any support for the products in Russia. “EU sanctions on the sale of industrial software may be aimed at complicating the supply of software and support for parallel imports,” he believes.
Large companies began the transition to Russian solutions, but medium and small businesses in most cases continue to work on foreign solutions, emphasizes independent IT market expert Denis Kasimov: “Foreign companies that were transferred to Russian management suffer the most. All the work of such organizations was based on foreign software.”
The project to switch from imported software to Russian in large industrial companies takes more than one month, since it is necessary to transfer all operational and economic activities of the company from one platform to another, while ensuring uninterrupted production and shipments of finished products, explains the director of corporate relations and sustainable development of Cementum Vitaly Bogachenko (in December 2022, the Russian business of the Swiss cement manufacturer Holcim was sold to management). According to him, the company has already transferred all critical business processes to Russian software, but “the systems require additional configuration and improvement, the work will take another year.”
NSP lawyer Gleb Boyko clarifies that the sanctions mean the cessation of work with Russian counterparties, even if the license has not yet expired. However, in his opinion, the EU will establish a transition period to complete the interaction, and will also establish a number of exceptions: “For example, software may be allowed to subsidiaries of European companies. Purely Russian businesses may be allowed to use the software to prevent situations that could negatively affect safety and the environment.”
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