Rada passes at first reading bill setting local production share in public procurement
Ukraine's Verkhovna Rada has passed at first reading a bill "Buy Ukrainian, Pay to Ukrainians" (bill No. 7206), which in particular introduces the share of local components no lower than 20% in bids submitted to participate in public procurement tenders.
A total of 241 lawmakers backed the document.
As reported, bill No. 7206 registered by 31 parliamentarians proposed taking into account the local content in public procurement, or locally manufactured goods.
The document proposes separating categories of goods, labor or services that will be procured only using the price criteria. The additional non-price criteria are foreseen for the rest of categories of good. It is planned to introduce the local content share no lower than 20% in tenders.
The parliamentarians said that the local content means the share of locally manufactured goods – cost of raw materials, salaries paid to employees, spending on rental and some other financial expenditure, as well as availability of servicing centers to service the procured goods in Ukraine.
The Economic Development and Trade Ministry opposed the adoption of this bill.
First Deputy Minister of Economic Development and Trade Maksym Nefyodov wrote on his Facebook page that the beautiful name of the bill "disguises a number of harmful initiatives, according to which in any tender the customer will be required to overpay up to 43% for a product that is defined by someone as domestic using a complex formula."
According to Nefyodov, this requirement is violation of the Ukraine-EU Association Agreement and it also creates significant corruption risks, because to confirm the domestic origin of the goods, the proposed amendments to the law require the submission of 23 certificates.