  
  
G/TRIMS/Q/RUS/11  
22 March  2022 
(22-2441) Page: 1/3 
Committee on Trade -Related Investment Measures  Original:  English  
 
  
RUSSIAN FEDERATION ‒ MEASURES IMPLEMENTING  
RUSSIA'S  IMPORT SUBSTITUTION POLICY  
REPLIES TO QUESTIONS1 FROM THE UNITED STATES  
The following communication, dated and received on 21 March  2022, is being circulated at the 
request of the delegation of the Russian Federation . 
 
_______________  
 
 
Question 1  
It is our understanding that Federal Law No. 223 applies to purchases by SOEs, business 
enterprises in which the Russian state, regional, or mun icipal government owns more than 
50 percent, and legal persons using State funding for certain investment projects. Is this 
description of the entities covered by Federal Law No. 223 correct? If not, please describe 
the types of entities covered by Federal  Law No. 223.  
Reply  
The full list of types of legal entities the purchases of which are covered by the Federal Law 
No. 223-FZ is contained in Article 1 of the Federal Law No. 223 -FZ. 
Question 2 
It is our understanding that Government Decree No. 925 implements Article 3.8 of Federal 
Law No. 223 by establishing the terms under which SOEs and certain other legal persons 
must give priority to goods of Russian origin, and to works and services perform ed and 
rendered by Russian entities. Is our understanding of the purpose of Decree No. 925 
correct?  
Reply  
The Resolution of the Government of the Russian Federation  No. 925 establishes the terms under 
which the priority  to goods of Russian origin and work s and services performed by Russian entities 
is to be granted. In particular, such terms are contained in paragraph 8 of the said Resolution  which  
requires such priority to be granted to the extent it would comply with Russia’s WTO and EAEU 
commitments . 
Question 3 
According to our reading of paragraph 2 of Decree No. 925, if goods, works, or services 
are purchased through a tender process, in evaluating the tenders the price of a Russian 
offer (i.e., for Russian -made goods or Russian -supplied works or servi ce) will be 
putatively reduced by 15  percent when compared against tenders involving foreign goods, 
works, or services. If the Russian tender is successful, however, the final contract will be 
for the full price. As a result, all else being equal, entities  covered by Federal Law No. 223 
must purchase Russian -produced goods unless those goods are more than 15% more 
 
1 G/TRIMS/Q/RUS/6.  G/TRIMS/Q/RUS/11  
- 2 - 
  expensive than imported goods. Is this a correct reading of paragraph 2? If not, could you 
please explain the mechanics of the process?  
Reply  
The process of purchasing   goods, works, services through a tender or in any other way, in which 
the winner of the procurement is determined based on the criteria for evaluating and comparing bids  
for participation in the procurement , specified in the procure ment documentation , or the winner is 
recognized as the person who offered the lowest contract price, evaluation, and comparison of bids 
for participation in the procurement, is carried out in accordance with paragraph  2 of the Resolution 
of the Government of the Russian Federation No. 925 . 
Question 4 
Paragraph 3 of Decree No. 925, which applies to so -called "reverse auctions" (where firms 
bid to provide goods, works, or services for the lowest price), appears to provide that the 
final price paid to a foreign firm who wins a contract to provide goods, works, or services 
will be 15% less than the contract price proposed in the winning proposal. Is this 
understanding correct? If not, could you please explain the mechanics of the process? Can 
you elaborate  on the distinction between paragraph 2 and paragraph 3 of Decree No. 925?  
Reply  
The process of purchasing goods, works, services through an auction or in another way, in which 
the determination of the winner is carried out by reducing the initial (maximum ) price of the contract 
specified in the notice of procurement by the "step" set in the procurement  documentation , is carried 
out in accordance with paragraph  3 of the Resolution of the Government of the Russian Federation 
No. 925.  
Question 5 
Paragraph 4 o f Decree No. 925 also appears to apply to reverse auctions, but applies when 
the winner of the auction has reduced the price to zero, but a contractual obligation 
remains. In such cases, the price to be paid will actually be 15 percent above the proposed 
price. Would you please explain how this process works? If the price of the contract has 
been bid down to zero, what is the calculation for determining 15 percent above that 
price?  
Reply  
The process of purchasing  goods, works, services through an auction o r in another way, in which 
the determination of the winner is carried out by reducing the initial (maximum) price of the contract 
specified in the notice of procurement by the "step" set in the procurement documentation , is carried 
out according to paragra ph 4 of the Resolution of the Government of the Russian Federation No. 925. 
Question 6 
Subparagraph 6(d) appears to describe a situation in which a supply bid, submitted under 
the process described in paragraph 2, includes a mix of Russian and foreign goods, works, 
or services. Is our understanding correct that the 15 percent price preference described 
in paragraph  2 will not be applied to any such supply bid if the price of the Russian -
originated goods, works, or services represents less than 5 0 percent of the total price of 
the contract?  
Reply  
The rules regarding bids for participation submitted by participant within the  purchasing of goods, 
works, services through tender s or other procurement  procedures , in which the winner of the 
procurement is determined on the basis of the criteria for evaluating and comparing bids for 
participation in the procurement specified in the procurement documentation, or the winner of which G/TRIMS/Q/RUS/11  
- 3 - 
  is the person who offered the lowest contract price, are established by  paragraph  6(d) of the 
Resolution of the Government of the Russian Federation No. 925 . 
Question 7 
Subparagraph 6(e) appears to describe a situation in which a supply bid, submitted under 
the process described in paragraphs 3 or 4, includes a mix of Russian and  foreign goods, 
works and/or services. It is our understanding that the 15 percent price preference 
described in paragraphs 3 or 4 will not be applied to any such supply bid in which the price 
of the Russian -originated goods, works or services represents m ore than 50 percent of 
the total price of the contract. Please explain the difference between subparagraphs 6(d) 
and 6(e). What is the rationale for subparagraph 6(e)?  
Reply  
The rules regarding bids for participation submitted by participant s within the purchasing of goods, 
works, services through  auction s or other procurement  procedures , in which the determination of 
the winner is carried out by reducing the initial (maximum) contract price specifie d in the notice of 
procurement by the "step" set in the procurement documentation,  are established by paragraph  6(e) 
of the Resolution of the Government of the Russian Federation No. 925 . 
Question 8 
Paragraph 8 of Decree No. 925 provides that the priority for tenders and auctions 
established by the Decree shall take into account the provisions of the General Agreement 
on Tariffs and Trade (GATT). How does the administration of the 15 percent price priority 
requirement for Russian goods take into ac count the national treatment provisions of 
Article III of the GATT  1947 or the Agreement on Trade -Related Investment Measures' 
prohibition on requiring or conditioning receipt of an advantage on the purchase or use of 
products of domestic origin?  
Reply  
In accordance with paragraph 8 of  the Resolution of the Government of the Russian Federation 
No. 925, this Resolution is  to be applied in accordance with the commitments  of the Russian 
Federation within the WTO and the EAEU.  
 
__________  