Category: Uncategorized

Russia’s Special Procurement Investment Contracts (SPIC).

From the Public Procurement Institute (Moscow, www.roszakupki.com):

SPIC is an agreement between investor and the Russian Federation and/or region of the Russian Federation under which investor commits to invest certain amount of money in creation, development or modernization of production facilities at the territory of Russia while the government guarantees freezing of tax burden and stability of normative requirements to products for the duration of an investment project and is obliged to apply stimulating measures to the investor, including tax benefits. And procurement idea is that starting from September 1, 2016 SPIC investors are entitled to claim the right to sell up to 30 % of produced merchandise under public procurement procedure on a non-competitive basis.

Background paper:  investment-contract-russia

Editor’s note:  Michael Bowsher is the coordinating co-chair of the September 19, 2016 conference at Kings College London, which will address procurement issues after Brexit; registration is free, at http://www.eventbrite.co.uk/e/opening-transatlantic-procurement-markets-tickets-25739851589.  Michael’s contribution below is part of a very interesting review of regulatory issues that may emerge from Brexit.

___________________________________

Procurement

Michael Bowsher QC of Monkton Chambers considers the potential implications for the EU procurement regime, a key area for criticism from those who have campaigned to leave the EU.

“At a very simple level, it is hard to see politicians, administrators or courts wanting the disposal of the money raised from taxpayers to be done without some transparent framework in which to operate. Perhaps even more fundamentally though, these are not just the EU’s rules (which of course reflected many of the UK’s demands). Any modern trade agreement between industrialised nations includes a chapter regarding the opening up, and therefore also the regulation of, government procurement markets. The EU rules themselves are actually the expression in the EU of the requirements of the WTO’s Government Procurement Agreement (GPA). The UK or England and Wales could join the WTO without joining the GPA, but it would be very strange if it did given the list of countries that are already signed up.

“Finally, it already seemed likely that the EU would soon legislate to provide for the means of closing its own government markets to countries that did not provide reciprocal access. If that happened, we would have to put in place something comparable to the GPA rules just to continue trade for this 20% or so of the EU market, and those GPA rules require something very like the EU directives with some appropriate remedies. So, while there will be a lot of change, some elements of the current system are likely to remain.

“In the short term, there will be an immediate impact on projects, research and so forth funded by the EU, or in some way related to the EU. Those dependent on those projects and research that are funded may be immediately affected. The volume of government funded work generally may reduce and this will affect the practice of procurement law, although history shows that this can be unpredictable. Quite often when there are more people chasing less work, there is more concern as to how that smaller pie is distributed and more disputes over the result.”

For further information on this website, please feel free to contact Christopher Yukins, a professor and co-director of the Government Procurement Law Program at The George Washington University Law School, cyukins@law.gwu.edu.