Diplomatic Academy of Vienna Symposium EU-RUSSIA TRADE LAW AND POLICY RELATIONS Government Procurement Agreement (GPA) and Russian public procurement rules: current status and key issues Dariya Molchanova, PhD Researcher, ESI, MGIMO University Diplomatic Academy of Vienna July 3, 2017

GPA: principles and coverage July 3, 2017 GPA: principles and coverage Principles Non-Discrimination Transparency Procedural Fairness GPA only applies to procurement of goods, services, or any combination thereof, as specified in each Party's schedules to the Agreement (i.e., Annexes to Appendix I): Annex 1, the central government entities whose procurement is covered by the Agreement Annex 2, the sub-central government entities whose procurement is covered by the Agreement Annex 3, all other entities whose procurement is covered by the Agreement Annex 4, the goods covered by the Agreement Annex 5, the services, other than construction services, covered by the Agreement Annex 6, the construction services covered by the Agreement Annex 7, any General Notes

Existing Russian public procurement legal framework July 3, 2017 Existing Russian public procurement legal framework Key federal laws regulating public procurement in Russia: Federal Law No. 44-FZ "On contractual system in the sphere of public procurement of goods, works, services for state and municipal needs" of 5 April 2013 (the Law 44-FZ) and Federal Law No. 223-FZ "On procurement of goods, works, services by certain types of legal entities" of 18 July 2011 (the Law 223-FZ) There are also different subordinate legal acts (usually in the form of RF Government Regulations) that set forth some peculiarities for public procurement process (in relation to procurements according to both Law 44-FZ and Law 223-FZ) Law 44-FZ explicitly provides for a right of the RF Government to ban or restrict the procurement of goods, works, services from foreign entities in certain cases (protection of the constitutional system, protection of state defense etc. – see par. 3 of article 14 of Law 44-FZ) Law 223-FZ explicitly provides for a right of the RF Government to establish a priority for procurement of goods, works, services from Russian entities (see subpar. 1) of par. 8 of article 3 of Law 223-FZ)

Types of public procurement July 3, 2017 Law 44-FZ It is used for procurement of goods, works and services by state and municipal bodies, State Corporation "Rusatom" (but not by all of its subsidiaries), State Corporation "Roscosmos", management body of a state non-budgetary fund, state public institution acting on behalf of Russian Federation or a constituent entity Types of public procurement Tenders Auctions Request for quotation Request for proposals public closed electronic with limited participation closed with limited participation closed two-stage closed two-staged

July 3, 2017 Law 223-FZ Law 223-FZ regulates the basics of procurement of goods, works and services for the following (there are, however, exclusions) legal entities (the Entities Concerned): state corporations (save for Rusatom and Roscosmos), state companies, public law companies, natural monopolies, regulated legal entities (electricity supply, heating supply, waste management, water supply and wastewater disposal), state unitary enterprises, municipal unitary enterprises, autonomous enterprises and commercial legal entities where over 50% of the shares belong to the Russian state, a RF constituent entity or a municipality) commercial legal entities where over 50% of the shares belong to the entities listed under the first dash above commercial legal entities where over 50% of the shares belong to the entities listed under the second dash above budgetary enterprises in certain cases Law 223-FZ does not establish tendering procedures itself, but requires Entities Concerned to adopt their own internal procurement regulations with an exhaustive list of procurement procedures applicable by relevant entity

Current status of negotiations July 3, 2017 Current status of negotiations Russia joined WTO and Pledged to to initiate negotiations on its accession to GPA in 4 years August 2012 Russia applied for accession to the GPA August 2016 GPA Committee meeting The initial market access offer was discussed June 2017