It just ignores this part of local legislation, like everyone else. The government tries to pressure companies to provide encryption keys, but this is unfeasible as it doesn't have big enough leverage, especially now, when hostile international relations shield foreign companies from legal threats. So the only thing they can do is an internet block, but most users do have some kind of vpn installed already to circumvent such obstacles. It also weakens government negotiations position, because one you use the nuclear option, there is no more ways to threaten the company.