ANNOUNCEMENT 21 Mar 2016In March 2016, the government of the Russian Federation announced a change in the local input requirements for the participation in certain public purchases.
NUMBER OF INTERVENTIONS
With Resolution No. 475-p of 21 March 2016 the Russian Government requested 90 state-owned organisations to purchase innovative and high-tech products from small and medium enterprises ('SMEs').
The organisations are joint stock companies with state participation, state corporations, state companies and federal state unitary enterprises that implement innovative development programmes. Among these 90 state organisations are included the 12 biggest public procurement contractors out of 35, whose procurement planned schedules must be approved bythe Federal Corporation for Development of Small and Medium Enterprises in accordance with Resolution No. 2258- of 6 November 2015 of the Russian Government (see the attached related GTA report No.10397).
Resolution No. 475-p introduces a new, non-existent before, and different rule, compared to the requirement, introduced by Resolution No. 2258-. Namely, Resolution No. 2258- introduces an obligatory state pre-screening concerning public procurement of a list of selected 35 public procurement contractors, while Resolution No. 475-p requests the 90 juridical persons to purchase SME goods and services. In addition, Resolution No. 2258- identifies the public procurement contractors based on their annual income in 2014 from procurement goods, works and services of at least 2 billion RUB (ca. 35.55 million USD as per the official RUB/USD exchange rate for 31 December 2014), while Resolution No. 475-p does not contain any additional rule how the enterprises are selected apart from being state owned.
The GTA includes state guarantees and other financial incentives that are likely to affect the restructuring and performance of firms facing international competition, whether from imports, in export markets, and from foreign subsidiaries.