Amendments to the Code of Administrative Offences of the Russian Federation

28.05.2014

Goltsblat BLP advises that, on 16 May 2014, amendments¹ to the Code of Administrative Offences of the Russian Federation came into effect introducing standard liabilities for violations of the requirements of Federal Law No. 223-FZ “On Procurement of Goods, Works and Services by Certain Legal Entities” dated 18 July 2011  (the Procurement Law).

Liability is now stipulated for both companies purchasing goods, works and services under the Procurement Law and certain employees (officials) organising and making purchases.

The amendments to the Code can be divided into two main groups:

those imposing liability for violations at the procurement stage (such as departures from the format or the manner in which purchases are to be made, violations of various deadlines or the requirements on tender documents or on the bid evaluation procedure);

those imposing liability for post-procurement violations (failure to comply with decisions or orders of the anti-trust authorities or to provide the latter with information about bad faith suppliers).

Please note that, previously, legal entities and officials were not subject to any administrative liability for violations of the Procurement Law.  In fact, the State (represented by the Federal Antimonopoly Service of the Russian Federation (FAS of Russia)) was unable to influence bad faith tender organisers other than by issuing them the orders envisaged by the Procedure for Considering Claims against Actions (Omissions) by Clients during Procurement of Goods, Works or Services as approved by Order No. 17/13 of the Russian FAS dated 18 January 2013. 

The most interesting aspect of the new amendments is how the penalties are determined:  for instance, the fine for failure to comply with decisions or orders issued by the anti-trust authority varies between 300 000 to 500 000 roubles (for legal entities); whereas non-compliance with the electronic procurement format might entail fines of from 100 000 to 300 000 roubles for each violation. 

It should be noted that the fines specified for violations of the Procurement Law are very similar to those imposed for similar violations of the Law on the Federal Contract System, this testifying that no distinction is drawn between purchases by government and municipal clients, and legal entities in which the state holds, directly or indirectly, shares or ownership interests, since these violations are deemed equally dangerous for the public.

Below you will find a table listing the key amendments to the Russian Code of Administrative Offences taking effect on 16 May 2014.

Key Amendments to the Russian Code of Administrative Offences dated 16 May 2014

Code Article

Offence

Penalty

for officials (roubles)

for legal entities (roubles)

article 7.32.3

Failure to comply with electronic procurement format

10 000 – 30 000

100 000 – 300 000

Failure to comply  with the procurement procedure under the Law on the Federal Contract System

20 000 – 30 000

50 000 – 100 000

Violation of deadlines for publishing procurement information

2 000 – 5 000

10 000 – 30 000

Failure to publish procurement information (part thereof)

30 000 – 50 000

100 000 – 300 000

Violation of deadlines for providing information about changes to the regulations governing procurement rules

5 000 – 10 000

10 000 – 30 000

Failure to comply with the requirements on the contents of notifications and (or) procurement documentation

2 000 – 3 000

5 000 – 10 000

(1) Imposition on bidders, items to be procured or contract provisions of requirements not specified by the procurement documentation;

(2) Application to bid evaluation or comparison of criteria not specified by the procurement documentation.

2 000 – 3 000

5 000 – 10 000

Article 19.5

Failure to observe decisions or orders issued by the anti-trust authority to remedy violations of the procurement legislation

30 000 – 50 000

300 000 – 500 000

article 19.7.2-1

Failure to provide (or to provide in due time) the antimonopoly service with information or provision of incorrect information about bad faith tender participants and suppliers

10 000 – 15 000

30 000 – 50 000

¹ Federal Law No. 122-FZ "On Amending the Code of the Administrative Offences of the Russian Federation" dated 5 May 2014.

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