Restrictive measures in the context of Russian actions in the Ukraine

EU Regulation on restrictive measures in the context of Russian actions in the Ukraine

In the light of Russian actions in the Ukraine and as a matter of urgency, the European Council recently adopted a new regulation – EU Regulation 2022/576,– aimed at restricting participation in economic activity by economic operators from the Russian Federation. The Regulation was adopted on 08 April 2022, with immediate effect and the complete text may be found in full here.

Article 5k of the Regulation applies to public procurement procedures for the award of contracts under the provisions of Directives 2014/23/EU, 2014/24/EU, 2014/25/EU and 2009/81/EC – above threshold only.

The Regulation prohibits the award or continuation of contracts falling within the scope of the Public Procurement Directives to persons or undertakings related to the Russian Federation.

The Regulation prohibits the conclusion and performance of contracts falling under the EU Procurement Directives with Russian nationals or economic operators established in the Russian Federation, including any self-employed person, legal person, institution or other entity.

Furthermore, the prohibition covers calls for competition where more than 50% of the ownership of an economic operator, either directly or indirectly, is owned by nationals or companies of the Russian Federation. In relation to sub-contracts the Regulation stipulates that subcontractors, suppliers and persons on whom the tenderer or candidate relies may not be a national of the Russian Federation, or a company, institution or other entity established in the Russian Federation where the value of that subcontract exceeds 10% of the contract value.

Contracting Authorities and Contracting Entities are recommended to review all existing contracts to ensure that none come within the terms of EU Regulation 2022/576 and the prohibitions contained therein.

Where a contract or subcontract, is found to come within the application of EU Regulation 2022/576, the responsible Contracting Authority or Contracting Entity is required to terminate such a contract with immediacy or by 10 October 2022 as appropriate.

Support@OGP.gov.ie may provide assistance with enquiries in this matter.