Experts assessed the risks of sanctions for the songs of Mikhail Gutseriev Sanctions

The EU created problems not only for the main business of Mikhail Gutseriev. A well-known songwriter may have difficulty collecting royalties for performing hits in Europe,

Mikhail Gutseriev, as a songwriter, may face the problem of paying royalties - deductions for the use of works of his authorship - in the EU countries that have imposed sanctions against him, according to experts in the field of intellectual property interviewed by RBC.

The chairman of the board of directors of the Safmar group, Mikhail Gutseriev, writes poetry. Songs based on his texts are performed, in particular, by Alla Pugacheva, Grigory Leps, Nikolai Baskov. Among the songs written on the verses of Gutseriev, for example, Love Story performed by Mikhail Shufutinsky, “The Bitter Taste of Elderberry” by Lyubov Uspenskaya, “Cherry Roses” was sung by Iosif Kobzon. In total, Gutseriev wrote poetry for more than 300 songs.

Gutseriev was included in the EU sanctions list on June 21, 2021, because he has business interests in Belarus and is a longtime friend of the country's President Alexander Lukashenko, the EU Council explained. In total, 78 people fell under the sanctions, all of them, according to the EU, are related to human rights violations in Belarus, the violent suppression of civil society, the democratic opposition and journalists.

Lukashenka and Gutseriev's daughter-in-law fell under new EU sanctions on Belarus Politics

In Europe, Russian-language stations broadcast, which also broadcast modern popular music. For example, in Cyprus, stations in Limassol, Nicosia, Paphos and Larnaca operate under the Russian Radio brand. Their program director, Yana Soboleva, refused to explain whether Russian Radio in Cyprus could now broadcast songs based on Gutseriev's verses.

All European accounts and assets of members of the sanctions lists will be blocked. If Gutseriev, as a songwriter, has an agreement with an EU collective rights management organization that pays royalties to authors for the use of their songs, then this legal entity will not have the right to transfer funds in favor of Gutseriev, points out Sergey Glandin, special adviser on sanctions law at Pen & Paper. According to him, such an organization will have to freeze the funds intended for Gutseriev in a special deposit account.

Such organizations may face problems up to a criminal case, if the royalty is not depersonalized - that is, if it is indicated that the organization for collective management of rights transfers a specific amount to Mikhail Gutseriev. If the royalties are impersonal and transferred to Russian organizations in a common tranche, and the distribution to the authors takes place already in Russia, there should be no problems with the payment of remuneration to Gutseriev, Glandin suggests.

If such organizations from the EU transfer royalties to Gutseriev, they will violate the EU sanctions requirements, confirms Yury Fedyukin, managing partner of the law firm Enterprise Legal Solutions. At the same time, in his opinion, local radio stations can continue to broadcast Gutseriev's compositions.

Since songwriting for a businessman is more of a hobby than a main activity, obviously, he does not derive his main income from this, therefore, radio stations can transfer deductions to OKUPs in his favor in the “on demand” format, and Gutseriev may well receive these funds legally when the sanctions are lifted, Fedyukin argues.

Listen Poet Mikhail Gutseriev. "Landmark of Love" (Best Songs) — collection on Yandex.Music

RBC sent requests to organizations for the collective management of the rights of the EU countries, the production center of the poet Mikhail Gutseriev, the Safmar group and the representative of the businessman.

How songwriters receive royalties

In Russia, remuneration for the use of musical works to their authors - that is, composers and songwriters - is now distributed on the basis of state accreditation by the Russian Authors' Society (RAO). It enters into an agreement with the author or copyright holder, then grants a license to use the work in areas of public performance, such as radio. RAO records who and when used the work of the author, collects royalties from these persons and then distributes them to the authors.

Such a system also works in the European Union, RAO cooperates with rights management organizations of the EU countries, which allocate funds in favor of Russian authors.

According to the latest data for 2019, all foreign organizations for the collective management of rights transferred 289 million rubles to RAO UES, which is only 3.5% of all the company's fees for 2019.

In Russia, for the public performance of musical works (for example, in cafes and restaurants, background playback in beauty salons, etc.), more than 3 billion rubles were collected in favor of copyright holders, for broadcasting musical works on radio and on TV - almost 1, 8 billion rubles

Now the monthly rate of RAO deductions, for example, for restaurants (if the area where music is heard does not exceed 70 sq. m) is 40 rubles. for 1 sq. m, but not less than 1.5 thousand rubles. If this is a live performance of the performer, then the rate rises to 54 rubles. for 1 sq. m, but not less than 1.9 thousand rubles.

RAO does not disclose the amount of payments to specific right holders.