Russian Publishers Complain About Pirate Use of Gray Payment Systems

The Russian Book Union has requested that access to banking infrastructure be restricted for pirate websites and has called for the creation of an expert group to combat their economic crimes. According to Vedomosti, letters regarding this issue were sent at the end of December to Elvira Nabiullina, Chair of the Central Bank, and Vladimir Kolokoltsev, Minister of Internal Affairs.

The proposed expert group would include representatives from the Bank of Russia, the Ministry of Internal Affairs, the Federal Tax Service, and copyright holders.

The letters state that illegal resources bypass the ban on bank account services and sell digital copies of books through gray payment systems without tax withholding. These systems reportedly lack legal entity status and do not have a Central Bank license to conduct money transfers.

The Russian Book Union’s appeal notes that hidden card-to-card transfers are risky for buyers. If a pirate site fails to provide access to purchased books, the consumer cannot request a transaction reversal through their bank. There is no refund mechanism for card-to-card transfers. The Union believes that the number of crimes involving gray payment systems would decrease if banks technically restricted illegal use of their payment infrastructure. However, the Union’s direct appeals to banks have so far not stopped these illegal activities, according to the text cited by Vedomosti.

Maria Mikhaylova, Director of the National Payment Association, told the newspaper that disguising a payment as an illegal card-to-card transfer is a common practice. She said that internet scammers, pirate sites, and crypto exchanges all use this method.

The Russian Book Union is a non-governmental, non-profit organization that brings together Russian publishers, book distributors, printing and pulp and paper enterprises, libraries, and writers’ organizations. Since 2001, its president has been Sergey Stepashin, a former counterintelligence officer, ex-Minister of Justice and Internal Affairs, and former head of the Russian government. From 2016 to 2020, the Union received nearly a quarter of a billion rubles from the Russian budget to organize the Red Square Book Festival (according to the Anti-Corruption Foundation, which is designated as extremist in Russia).