Localization of Stadler and Alstom in Ukraine resolved
The Verkhovna Rada of Ukraine adopted a localization law. The Parliament adopted the Law “On Amendments to the Law of Ukraine“ On Public Procurement ”Regarding the creation of prerequisites for sustainable development and modernization of the domestic industry”.
From 2022 for a period of 10 years, the law temporarily establishes the following features of the implementation of procurement procedures if the cost of the procurement item is equal to or exceeds UAH 200 thousand.
“The customer purchases the goods specified in subparagraph 2 of this paragraph only if their degree of localization of production is equal to or exceeds:
- in 2022 – 10%;
- in 2023 – 15%;
- in 2024 – 20%;
- in 2025 – 25%;
- in 2026 – 30%;
- in 2027 – 35%;
- from 2028 until the end of the 10-year term of this clause – 40%.”
According to the bill, “the degree of localization of production is determined independently by the manufacturer of the goods being the subject of the purchase, and is confirmed by the Authorized Body in the manner prescribed by the Cabinet of Ministers of Ukraine, according to the appropriate formula.”
In addition, the Cabinet of Ministers of Ukraine, in agreement with the relevant committee of the Verkhovna Rada of Ukraine, can annually (no later than October 31) change the degree of localization of production for the next calendar year to 5% in the direction of decreasing or up to 10% in the direction of increasing for each individual subject of the purchase.
Manufacturers from the EU, the United States and a number of other signatory countries of the GPA (WTO Public Procurement Agreement) were excluded from the localization requirements. Their share in these categories of goods is about 20%.
Other countries supplying 80% of imports in these categories will be subject to localization requirements. These are Belarus, Turkey, China and others who have not signed the GPA.
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