1. SPECIALTIES OF LEGAL AND CONTRACT WORK IN EPC/EPC(m)-PROJECTS
RUSSIAN Federation

2. Content 1. Overview of EPC-projects in Russia
2. General risks of EPC/EPC(m) contracts performing on territory of Russia/EEU and protective measures
3. Practical examples of contract strategies based on EPC model

3. history Projects in USSR: Executed under industry-specific forms
State-owned companies
No foreign contractors, but some foreign licensors and equipment suppliers (oil refinery)
Disintegrated approach on the execution level (Owner, Engineer, Suppliers, Construction contractor, Commissioning company)
Integration on the higher level (ministries and agencies)
regulation of EPC approach (civil construction)

4. OVERVIEW OF EPC PROJECTS IN RUSSIA
Integrated approach is contradict to culture of national companies
Most part of projects realizing basing not on pure EPC model, practice of usage hybrid models of contracts (EPs, EP+Cm, EPsCm etc.)
Problems related with project financing, many construction projects realizing for own costs of Employer
Features of national law including the accounting, taxation and currency supervision and state control under construction

5. CONTRACT AND legal risks
Project documentation development and approval of such documentation by Glavgosexpertiza
Necessity to use works of Russian Design Institute and to be liable for result under Employer
Mandatory compliance of approved project documentation to detailed design documentation and as-built documentation
Construction, Commissioning and Use permits
Risks of
Supplementary expenses for parties of the project (additional expertise, estimations, obtaining of authorizations)
Sanctions and penalties from supervisory authorities (including suspension of the project or total prohibition for realization)

6. CONTRACT AND legal risks
Russian Law contains a lot of imperative rules
Special requirements of law related with compliance of EPC Contract to public order of state where contract concluded
Arbitrational practice of national courts recognize the legal nature of EPC Contract very hardly
Sustainable trend of internal policy in the state to use more standard contracts for projects in Russia (C
Risks of
Recognition of EPC Contract invalid by court (fully or in a part)
Requalification by court the legal nature of Contract with application of imperative rules
Inability to enforce the decision of foreign court of international arbitrage

7. CONTRACT AND legal risks
Historically not applicable for modern integrated approach system of accounting in construction
Problem of usage “unit rates mechanism ” (e.g. FUR/TUR in Russia)
Special rules of currency control and supervision
Risks of:
Tax negative consequences
Sanctions and penalties from state bodies
Administrative and criminal liability

8. Practical examples of contract strategies based on EPC model
Many Russian companies in the last years use hybrid models of projects realization with the participation of foreign and national contractors.
Foreign contractors provide design, international procurement, construction management and project management consulting
Russian contractors perform design in a part of Glavgosexpertiza requirements, internal procurement, construction works and Commissioning works

9. Practical examples of contract strategies based on EPC model
EP+Cm Model (Moscow Refinery)
Russian Design
Institute
Russian
Employer
Foreign
PMC Consultant
Foreign FEED
Contractor
Foreign
EP+Cm
Contractor
Management of Construction
Russian
Construction
Contractor
Foreign and Russian
Suppliers
Russian
Comissioning
Contractor

10. Practical examples of contract strategies based on EPC model
EPsCm Model (Omsk Refinery)
Russian Design
Institute
Russian
Employer
Foreign
FEED Contractor
Foreign
EPsCm
Contractor
Management of Construction
Russian
Construction
Contractor
Management of Procurement
Russian
Comissioning
Contractor
Foreign and Russian
Suppliers

11. Thank for your attention!