Starting from January 10, 2016, a revised version of Federal Law No.223-FZ dated July 18, 2011 “On procurement of goods, works and services by certain types of legal entities” will become effective.

This new edition of the law provides for special considerationsof procuring machine-building products when implementing investment projects whose cost exceeds 10 billion rubles.

Procurement of the said products under such projects can be performed only based on planning documents, provided that the legal entities subject to said provisions are obliged to make a list of machine-building products needed in the long-term for a period no less than 5 years or for the project implementation period. The Russian Government will adopt criteria for determining which goods fall under the category of machine-building products. Procurement of machine-building products is prohibited until the said lists are submitted to the coordination body of the Russian Government. 

Moreover, procurement of certain kinds of machine-building products can be limited. The Russian Government is entitled to determine the types of machine-building products which cannot be procured without obtaining approval of their operational characteristics from the coordination body of the Russian Government, as well as the types of machine-building products which cannot be procured outside the Russian territory. 

It should be noted that along with the standard list of entities whose activities are effected by the law, the possibility to apply provisions of this law to other legal entities (including commercial ones) has been introduced. In such cases, the law affects procurement based on funds budgeted for investment projects with state support in the form of:

- state guarantee of the Russian Federation; and/or

- full or partial (in the amount of at least 10% of the investment project cost) financial security at the expense of:

• federal budget (budgetary investments or subsidies);
• National Wealth Fund;
• Vnesheconombank.

Pavel Karpunin   Partner   St. Petersburg    pkarpunin@cls.ru   Tel.: +7 (812) 346 79 90

Rimma Tolmacheva   Senior Associate    St. Petersburg    rtolmacheva@cls.ru   Tel.: +7 (812) 346 79 90

Additional notes

Should any questions arise in connection with the above or if you need any additional materials, please contact Pavel Karpunin or Rimma Tolmacheva, St. Petersburg Office of Capital Legal Services.

This Information letter keeps the clients of Capital Legal Services and other interested parties abreast of information that may, to any extent, affect their activity or cater to their particular interests. The opinions and commentaries expressed in this information letter shall not be deemed as legal opinions and do not cancel the need to obtain legal advice or legal opinion on separate issues.