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The European Union has opposed the adoption of Ukraine's law on localization of production

Ukraine / Europe
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the European Union is concerned about the initiative of the Ukrainian politicians to restrict access to public procurement for engineering products if at least part of the proposed components will not be produced in Ukraine.

The European Union has opposed the adoption of Ukraine's law on localization of production

Official representative of the European Union in Kiev said that the adopted on 21 July by the Verkhovna Rada in the first reading the bill № 3739 "On amendments to the Law of Ukraine"On public procurement", or the so-called "law on localization" unequivocally violates the principle of non-discrimination laid down in the Association Agreement between Ukraine and the EU, and also contradicts the obligations of Ukraine in the framework of the world trade organization (WTO).

"Although the desire to support the domestic industry is clear, especially given the economic difficulties due to pandemic СOVID-19, there are other ways to do it without violating the principles of free competition in relations with the EU and other WTO members", - noted in the EU mission in response to the request of the German edition of DW.

the Bill proposed temporary from 1 January 2021 and for a period of ten years, to install especially with the public procurement of certain goods, if the volume of production in Ukraine is below the statutory norms of localization.

the Law applies only to procurement of special vehicles for the needs of energy, municipal transport and housing. For these kinds of products established the following rules of localization: from 2021 – 25-45% of the special transport must be carried out in Ukraine. 2024 – 40-60%.

As noted by a European diplomatic mission, increasing transparency of public procurement have contributed to the fact that the Ukrainians began to receive more for their money, and provided additional business opportunities. The EU delegation referred to the fact "one of the main achievements of the post-Maidan governments".

the Prime Minister of Ukraine Denis Shmyhal being in Brussels on 23 July, acknowledged that some provisions of bill No. 3739 contradict the Association agreement with the EU and has promised to "finding the balance" to his acceptance in the second reading.

Against suverenizatsii of the Ukrainian economy were made by and where Transparency International said that this initiative violates the international commitments Ukraine has taken in the framework of the Association Agreement with EU and Government procurement Agreement in the WTO.

In a statement, Transparency International noted that the Ministry of economy of Ukraine plans to introduce non-price criteria of localization in procurement engineering. Thus, manufacturers that confirmed my "nationality", will receive advantages on tenders, declare a public organization.

Previously, coalsalesthat the Zaporozhye steel mill "Dneprospetsstal" has declared readiness to participate in the project on localization of production of electric locomotives in Ukraine "national electric". The plant can offer a wide range of metal products in the framework of the project – the shafts of electric motors, axial, billet, circles spring steel 55S2A, said Deputy Director of sales – head of sales "DSS" Gennadiy Redko.

At the end of April this year at "Ukrzaliznytsia" announced the initiative in the next few years to upgrade the fleet of freight locomotives. We are talking about buying a 205 locomotives, worth about $ 1 billion. Offer Ukrzaliznytsia started with the 15% of localization of production of electric locomotives in Ukraine. But given the situation in the economy, and the opportunities that have domestic enterprises, Industrialists offered its own project of production of electric locomotives. Its location in the Ukrainian factories could reach over 50%.

"Localization is a concept that is used in all leading countries of the world. The application of the criterion of localization in procurement will be an important step towards supporting those who produce or want to produce in Ukraine. Thus, local production will get priority and access to large financial resources through public procurement, which amounts per year amount to hundreds of billions of hryvnia," – kommentiruet Minister of economic development, trade and agriculture of Ukraine Igor Petrashko.

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