Regulation of state procurement in Russia

Participating in state procurement is a good opportunity for companies to increase their sales. There are two federal laws in Russia that regulate the system of state procurement. The choice of applicable law depends on the type of customer:

• Federal Law No. 44-FZ "On the Contract System for State and Municipal Procurement of Goods, Work, and Services" dated 5th April 2013; and
• Federal Law No. 223-FZ "On Purchasing Goods, Work, and Services by Certain Types of Legal Entities" dated 18th July 2011.

44-FZ applies to purchases made by state and municipal authorities, corporations and institutions that are fully owned by the state while 223-FZ applies to purchases made by companies where state or a municipality owns more than 50% of the charter capital. 223-FZ also regulates purchases made by natural monopolies and organizations engaged in business that are subject to state regulation (e.g. electric power, gas, water, or heat supply). You can find the information about all purchases, including procurement plans, both under 44-FZ and 223-FZ on the official website www.zakupki.gov.ru.

The main supervising authority is the Russian Federal Antimonopoly Service (FAS). The FAS keeps two separate registers of unfair suppliers in relation to laws 44-FZ and 223-FZ. Unfair suppliers are included in either register for two years. Any state procurement participant encountered a violation of applicable federal laws has the right to lodge a complaint with a regulatory authority. According to official statistics, FAS satisfied 39.8% of complaints in 2017.

Comparative analysis of Law No. 44-FZ and Law No. 223-FZ