Crisis measures: Russian Authors’ Society (RAO) introduced long overdue changes to the Articles of Association of the organization at its extraordinary conference


At a meeting of the extraordinary conference of the Russian Authors’ Society (RAO), held on October 24 in Zaryadye Concert Hall in Moscow, important amendments were made to the Articles of Association of the organization to bring it into line with the changed legislation and increase the efficiency of solving urgent matters. The meeting was attended by 177 delegates from 45 regions – more than half of the regional branches of RAO.

Among the participants were well-known cultural figures: Anatoly Kroll, a conductor, composer, pianist, the Honored Artist of the Russian Federation; Alexander Tchaikovsky, a composer, pianist, professor, the Honored Artist of the Russian Federation; Boris Lyubimov, a theater critic, professor, the Honored Artist of the RSFSR, President of Schepkin Theater College; Alexander Klevitsky, a composer, the Honored Artist of the Russian Federation, CEO of the Russian Musical Union; Vladimir Presnyakov, a composer, performer, the Honored Artist of the Russian Federation; Alexander Sokolov, the Honored Artist of the Russian Federation, President of Tchaikovsky Moscow State Conservatory; Vsevolod Zaderatsky, the Honored Artist of the Russian Federation, Editor-in-Chief of the PianoForum magazine; Viktor Drobysh, a composer, producer, the Honored Artist of the Russian Federation; Yuri Ericona, a composer, the Honored Artist of the Russian Federation, and others.

The agenda of the meeting included such important issues as increasing the rate of deductions from royalties due to the obligation of RAO to pay insurance fees, as well as measures that the organization plans to take to protect the interests of the authors. Vladimir Matetskiy, an author of many songs for famous pop singers, multiple laureate of the “Songs of the Year” finals, jury member of music competitions, producer, and radio host, was unanimously elected the Chairman of the Extraordinary Conference of RAO. Maxim Dmitriev, the Chairman of the Board of RAO, became the Secretary of the Extraordinary Conference.

Presenting the report on the results of the financial and economic activities of the Russian Authors’ Society (RAO), Dmitriev noted that since 2017, the organization has been able to significantly increase the efficiency of its activities and take a number of successful measures to eliminate losses inherited from the previous management. Thus, compared to 2016, collection of royalties in 2018 increased by 17.4%, and payment of royalties for the same period increased by 28.2%. As a result of competent new policies on financial and economic activities and the use of modern mechanisms, the RAO balance loss was reduced in half, from 2 billion to 1 billion Russian rubles.

As Dmitriev explained, these results were achieved due to the competent financial policy of RAO: “We have modernized the mechanisms for implementing management decisions and introduced up to date software products that allow us to monitor financial and economic operations of the organization online. We also found new ways of costs optimization at RAO, terminated contracts with default contractors, and liquidated branches and separate divisions of the organization. All released resources were allocated to royalties, which is evidenced by the positive dynamics of fees and payments.”
The main topic of discussion was the current situation with payments to the Pension Fund of Russia and the subsequent increase of deductions from royalties to cover debt to the Pension Fund and timely fulfill the insurance obligations by RAO.

Sergei Sashin, a songwriter, librettist, the Secretary of the Audit Commission at RAO, explained why the current situation at RAO is so constrained. “I am sure that the management of RAO will continue its efforts to resolve this problem, to remove this illegal addition from the law. RAO is not an employer literally, so it is not obligated to make payments to the pension fund. It is not obligated and should not. RAO is engaged only in the collection and distribution, does not provide services for the placement of content, producer services and others. I believe that this is unfair and that something needs to be done and take certain measures.”
Since the previous version of the Articles of Association of RAO was adopted in 2017 and did not allow prompt resolving of any arising problems, following the results of the conference, it was decided to amend those provisions that are outdated in terms of compliance with the law and do not meet the present requirements:
– In order to comply with the Resolution of the Government of the Russian Federation “On the approval of the information disclosure principles by collective management organizations that have received state accreditation” dated July 16, 2018, establish in RAO functions an additional obligation regarding disclosure of information on its activities on the official website of the organization and the distribution registry of IPChain.

– Record in the Articles of Association the function of RAO to take measures to search for and identify copyright holders entitled to receive remuneration in accordance with the license agreements and remuneration agreements concluded by the organization.

– Transfer decision-making on RAO membership to the current governing body – the Management Board of the organization.
– Provide for the possibility of making decisions on issues permitted by law in absentia.

– Not to record in the Articles of the Association the maximum limits of the amounts withheld by RAO from royalties to cover the necessary expenses for collecting, distributing and paying remuneration to rightholders, and the amounts allocated to special funds created by the organization, and be guided in this matter by law and regulations of the Russian Federation. According to Resolution of the Government of the Russian Federation No. 992 of December 29, 2007, the maximum limit of these amounts is 45% of the collected remuneration, including no more than 20% of the amount of the collected remuneration can be transferred to such special funds.

– Change the function of the RAO Supervisory Board to the function of monitoring the organization’s activities in accordance with the adopted amendments to Part 4 of the Civil Code of the Russian Federation.

– Include in the duties of the Audit Commission checking the compliance with RAO Articles of Association and verification of property and reporting of the organization.