ANNOUNCEMENT 01 Jul 2015

In July 2015, the government of the Russian Federation announced a change in the local input requirements for the participation in certain public purchases.

NUMBER OF INTERVENTIONS

1

  • 0 harmful
  • 1 neutral
  • 0 liberalising
Inception date: 01 Jul 2015 | Removal date: 29 Dec 2017

Public procurement localisation

Decree No. 1352 of 11 December 2014 has introduced for the first time a 10% mandatory procurement purchase of goods, works and services by certain legal entities from SMEs.
 
The legal entities that are obliged to apply this rule are specified in article 2 of Decree No. 1352. In particular, starting from 1 July 2015, legal entities ("contractors") whose annual profit is at the amount of 10 billion Russian RUB (ca. 175.51 million USD as of 1 July 2015) are eligible. Furthermore, starting from 1 January 2016, all other legal entities become eligible.
 
Further important details regarding the public procurement procedure under this state intervention are:
 

  • The broader rule is that the annual volume of purchases that the contractors order from SMEs must not be less than 18% of the total annual volume of public procurement contracts they sign (art. 5 of Decree No. 1352).
  • The narrower rule is that the annual volume of purchases that the contractors must order under contracts signed exclusively with SMEs (art. 4, b, of Decree No. 1352) must not be less than 10% of the total annual volume of the contracts they sign.

 To the extent that this measure shifts Russian government spending away from contracts that could be contested by foreign firms (which are typically not SMEs), then this measure can disadvantage foreign commercial interests.

AFFECTED SECTORS

 
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AFFECTED PRODUCTS

 
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