No. 72. Protection of competition when agreements involving state and municipal property are concluded

01.09.2009

Goltsblat BLP advises that Federal Law of 17 July 2009 No. 173-FZ “On Amendments to Article 171 and 53 Of the Federal Law “On Protection of Competition”” (the Federal Law) mostly came into effect on 23 July 2009.

The Federal Law emphasises that lease, gratuitous use, trust management and other agreements envisaging transfer of possession and (or) use of state or municipal property may be concluded only on the basis of tenders or auctions.

At the same time, the Federal Law extends the list of cases when such rights to this type of property are granted without a tender or auction. These include:

  • granting of rights on the basis of international treaties of the Russian Federation, federal laws, acts of the President of the Russian Federation, and court rulings;
  • transfer of rights to state and local government authorities, state extra-budgetary funds, the Central Bank of the Russian Federation, as well as state and municipal institutions, state corporations and state-owned companies;
  • provision of rights to not-for-profit organisations (associations and unions, religious and public organisations, including parties, trades unions and partnerships of housing owners), chambers of attorneys, notaries, trade and industry, educational institutions, and privately-owned medical institutions;
  • transfer of rights for a maximum of 30 calendar days within any period of six consecutive calendar months;
  • certain other cases.

The given procedure for concluding agreements no longer applies to property disposed of in accordance with the legislation on concession agreements.

It should be noted that the person entitled to possess and (or) use premises, a building, structure or edifice may transfer such rights to third parties, with the consent of the owner, without holding a tender or an auction. The area thus transferred may not, however, exceed 10 per cent of the given facilities or amount to more than 25 square metres.

Let us note separately that, from 1 January 2011, all information about tenders and auctions must be posted on the official website of the Russian Federation.

At the same time, the Federal Law establishes a transition period. Accordingly, until 1 July 2015, tenders or auctions will not be required for prolonging lease agreements concluded up to 1 July 2008 with a number of small or medium-sized business, on the condition that, when they are extended, there are no grounds for terminating them early as envisaged by the civil legislation. Moreover, such lease agreements may be concluded only for a period up until 1 July 2015.

For additional information, please contact:

Eugenia Borzilo, Head of Group
Corporate /M&A
Goltsblat BLP
T: +7 495 775 69 99
E: info@gblplaw.com

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Ksenia Soboleva

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