On Monday 19 July, the European Union launched the first stage of a dispute settlement procedure with Russia at the World Trade Organization (WTO). It is questioning three Russian measures which, in its view, disadvantage foreign companies in public procurement in Russia.
The first concerns the comparison of tenders submitted in the context of a public contract. Some state-owned companies deduct between 15 and 30% of the total quoted price when dealing with Russian candidates. Even if the final price charged once the company is chosen reverts to the base prices, Russian companies have an advantage in the bid comparison phase.
The second measure concerns Russian companies that wish to source engineering products from abroad. They must apply for prior authorisation from the Russian Import Substitution Commission. On the other hand, companies sourcing in Russia are not subject to this obligation.
Finally, the EU wants to tackle the existing quotas for a selection of 250 products in Russia. The proportion of these to be manufactured in Russia can be as high as 90% depending on the category.
The European Commission considers that these measures do not respect WTO agreements, in particular the principle of National Treatment. This obliges a country to give foreign companies the same treatment as its domestic companies.
The two parties now have 60 days to consult each other and try to resolve the dispute. If the negotiations fail, the EU can request the opening of a special WTO working group on the dispute.
See the EU consultation request: https://bit.ly/3hTlX38 (Original version in French by Léa Marchal)