Profile committee recommends the abolition of localization requirements for EU manufacturers

Requirements for the localization of production in Ukraine will not apply to companies from the countries of the European Union and the United States.

Verkhovna Rada Committee on Economic Development recommended to the parliament to adopt bill No. 3739 “On Amendments to the Law of Ukraine “On Public Procurement” to Create Preconditions for Sustainable Development and Modernization of Domestic Industry” in the second reading and in general with technical and legal processing.

The railway magazine Railway Supply writes about this with reference to Railinsider.

“We looked at the committee decision of December 7, 2020 in order to agree on some provisions of the draft law,” says the decision, published on the committe official website.

According to the statement of the deputy chairman of the committee Dmitry Kisilevsky, localization requirements will not apply to companies from the European Union, the United States and other signatories to the GPA agreement on public procurement within the WTO.

The People Deputy called the adoption of the decision “an unpleasant compromise”, noting that a significant obstacle to the adoption of the document in the second reading by the parliament was the position of the European Union, which referred to the Association Agreement between Ukraine and the EU.

But a member of the committee, Roksolana Podlas, in the comments for Interfax-Ukraine, called the compromise acceptable, noting the competition with other manufacturers.

“To a greater extent, Ukrainian machine builders are concerned about the competition from Belarusian, Chinese and Turkish manufacturers. And goods from the EU are usually more expensive than Ukrainian ones, so the localization law will be an effective tool for protecting national producers,” she commented.

Earlier, the Verkhovna Rada ratified a framework agreement between the Cabinet of Ministers of Ukraine and the French government to support the renewal of the UZ locomotive fleet.

The ratification of the agreement will allow to ensure the renewal of the locomotive fleet of UZ by purchasing 130 freight electric locomotives (80 two-system, 50 single-system) with the localization of production in Ukraine. The President also signed the corresponding law.

As Prime Minister Denis Shmigal noted earlier, the supply of Alstom locomotives for JSC Ukrzaliznytsia is possible only if the French side observes earlier agreements on the localization of production in Ukraine at 35%.

This was also stated by the Minister of Infrastructure. And on November 9, the head of UZ announced that it was planned to conclude a contract with Alstom by the end of the year.

In addition, in September, Dmitry Kisilevsky, Deputy Chairman of the Verkhovna Rada Committee on Economic Development, intended to amend the draft State Budget for 2022, as a result of which it would be prohibited to buy imported trains or locomotives for budgetary funds.

At the same time, Alstom has signed over 50 agreements with potential Ukrainian suppliers.

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