EEC drafts agreement on mutual recognition of bank guarantees for govt procurements
MOSCOW. March 31 (Interfax) - The Eurasian Economic Commission (EEC) has prepared a draft agreement on mutual recognition of bank guarantees for government procurements and will now send it to Eurasian Economic Union (EAEU) members for approval, the assistant to the chairman of the EEC, Iya Malkina said.
"The [draft] agreement sets out requirements for banks that have the right to issue bank guarantees for government procurements, and approaches to compiling a list of such banks, as well as maintaining a registry of bank guarantees. A list of banks will be compiled and registry will be maintained if this is prescribed by the legislation of the purchasing country," Malkina said.
The document has been in the works for five years, during which time it has gone through the approval process within governments and approved with feedback from the parties, she said.
"The agreement will make it possible to ensure a 'national regime' in government procurements and allow participants in 'guest' procurements to back their bids with bank guarantees issued by 'home' resident banks," Malkina said.
Russian Deputy Finance Minister Alexei Lavrov said earlier that the problem of mutual recognition of bank guarantees in government procurements is one of the main barriers to companies from fellow EAEU countries bidding for Russian government contracts. At present, purchasers cannot accept bank guarantees of bidders from other EAEU countries for the purpose of securing bids and fulfillment of contracts, he said.
"This situation has been recognized by the Eurasian Economic Commission as a restriction in the area of government procurements for the free movement of goods, services, capital and labor within the internal market of the EAEU. In order to eliminate it, there are plans to prepare and sign an agreement on mutual recognition of bank guarantees when conducting state (municipal) procurements. The draft of this document is at a high level of readiness - it was approved by the EEC Board in May and sent for intragovernmental approval," Lavrov said last year.
Meanwhile, Russia and Belarus are tackling this bank problem in a pilot project launched last July that allows Belarusian banks to participate in Russia's system for guaranteeing government procurements in 2022-2023. Belarusbank, Belvneshekonombank, Belinvestbank, VTB Bank (Belarus) and Minsk Transit Bank initially took part in the project on a voluntary basis.
In order to start working in the system for guaranteeing government procurements, these banks had to obtain individual insurance account numbers (SNILS), individual taxpayer numbers (INN) and qualified certificates for digital signature verification keys. They also had to register in the Unified Identification and Authentication System (ESIA) and Unified Information System (EIS) in the area of procurements. After having met these requirements, they were included in the list of guarantors in line with the provisions of the law On the Contract System (44-FZ).
Under the current version of this law, banks that have the right to provide independent guarantees to bidders for government contracts must have a credit rating of at least 'B-(RU)' on the national scale of the Analytical Credit Rating Agency (ACRA) or at least 'ruB-'on the national scale of rating agency Expert RA.
In addition, as of January 2022 independent guarantees for government procurements can be provided by VEB.RF and regional guarantee organizations (RGO).
Russian banks issued 803,000 bank guarantees totalling 1.5 trillion rubles to bidders for government contracts in 2021, compared to 814,000 totalling 1.49 trillion rubles a year earlier. This included 561,700 guarantees totalling 1.2 trillion rubles issued to back fulfilment of contracts; 163,200 totalling 267.2 billion rubles to secure bids for contracts; and 76,400 totalling 9.5 billion rubles to secure warranty obligations.