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The new laws give work published on the Internet the same copyright protection as physical books, videos and CDs. Sites such as AllofMp3.com have previously been able to sell digital music without any licensing agreement from the copyright holders.

The new rules were agreed in 2004, but websites were given two years to sign the necessary licences in order to avoid prosecution. But according to Russian news service Kommersant, this has not happened.

The site says that 97 per cent of music on the Russian Internet is traded or shared without authorisation and sites such as AllofMP3 continue to sell outside Russia despite the absence of an approved licence. The country's legal music market is worth less than $1 million, while AllofMP3's turnover is estimated to be in the region of $25 to $30 million or more.

'Russian laws might be good, but they are not implemented very well,' Vadim Uskov, head of law company Uskov and Partners told Kommersant. 'If usual sellers of counterfeit goods are not caught on the street, then no one will catch the owners of websites

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in the Internet where it is hard to identify them.'

Uskov said Russia needs more 'decisive measures', such as those adopted in China that put the criminal responsibility for publishing pirate products on Internet providers.

Sites can also escape censure by exploiting a loophole in the law that allows them to sign licenses with Russian royalty collection and rights agencies, even though those agencies have no agreement with the record companies and artists whose music they are licensing. AllofMP3 exploits this loophole through its agreements with the Russian Multimedia and Internet Society (ROMS) and the Rightholders Federation for Collective Copyright Management of Works Used Interactively (FAIR).

It is also possible that the new laws may be scrapped almost as soon as they have come into force. The country's parliament, the Duma, will soon debate a completely new copyright law that will set out new rights and protections across all media.

However the music industry seems happy with the current state of affairs. Vladimir Dragunov, legal advisor of the Russian office of the International Federation of the Phonographic Industry (IFPI) said that for the first time the industry can set out its case and begin to build a legal market for digital music.

'The problem is not to destroy each pirate site,' he said. 'It is necessary to change the ratio between piratic and legal Internet from 99 to 10 per cent, for instance.'

There is a much greater issue at stake for Putin. He is keen to gain Russian membership of the World Trade Organisation, but there is strong opposition among politicians and music and movie industry lobbyists in the US who insist that it must clamp down on Internet 'piracy' before its membership application is accepted.