On November 11th, the WTO Committee on Government Procurement (Committee) approved Ukraine’s accession to the WTO Government Procurement Agreement (GPA). Ukraine’s membership in the GPA will help it “strengthen good governance in the area of public procurement, assist in its fight against corruption, and increase the transparency of government procurement practices”, according to Maxim Nefyodov, Ukraine’s Deputy Minister of the Economy and Trade in remarks to the Committee. Its accession will also fulfill a commitment it made when it joined the WTO in 2008. This post describes the procurement that Ukraine will open under the GPA, as set out in the Committee’s decision (GPA/133).
Central Government Entities: Ukraine will bring a wide variety of central government entities under the GPA, including entities in the following categories:
- Administrative bodies of Ukraine’s Parliament, President and Cabinet of Ministers;
- Ministries and other central government bodies of the executive branch;
- Ukraine’s Constitutional Court, Supreme Court and higher specialized courts;
- Institutions and organizations, which are main spending units of state budget funds, such as its National Bank, Anti-monopoly Committee, Prosecutor General’s Office of Ukraine and Accounting Chamber;
- Ukraine’s academies of sciences; and
- Subordinate entities that are financed by state budgets.
Ukraine lists the entities covered by these categories in an indicative list of 114 entities. These entities will apply the same threshold as most GPA parties in the procurement of goods and services: 130,000 Special Drawing Rights (SDRs).
Sub-central Government Entities: With regard to sub-central government entities subject to the Agreement, Ukraine provides an indicative list of 52 entities. That list includes the Parliament, Council of Ministers and executive authorities of the Autonomous Republic of Crimea, 24 provincial councils (including Donetsk) and 16 municipalities (including Kiev and Sevastopol). These entities will apply a threshold of 200,000 SDRs for purchases of goods and services (the same as most parties).
Other Entities: The third category of entities that Ukraine will cover under the GPA are entities in which: (i) public authorities have more than 50% of the authorized capital, a majority of votes in the governing body or the right to appoint more than half of the executive body; or (ii) the entity has special or exclusive rights. Such entities will conduct their procurement under GPA rules if they carry out activities in one of 13 areas, which include: gas, heat, electricity, water, sewage, rail or electric transport, airports, ports, postal services, geological exploration (of oil, gas and coal), telecommunications, and crude oil and oil products. Ukraine provides an indicative list of 48 entities that fulfill the criteria for coverage, which includes a number of state-owned companies, such as its national oil and gas company (Naftogas). These entities will apply a threshold of 400,000 SDRs when they purchase goods and services.
Services: Ukraine will follow New Zealand and the United States in using a negative list to define its coverage of services. It will cover the procurement of all services except for the four categories that it excludes:
- Services of international mediation courts and international commercial arbitrages that are provided for resolution of disputes involving a procuring entity;
- Services of financial institutions, including international institutions, related to the raising of credit resources and funds by a procuring entity;
- R&D services; and
- Financial and related services procured or provided by Ukraine’s National Bank.
Ukraine will also cover all construction services, applying a threshold of five million SDRs. The coverage of both services and constructions services is subject to the limitations and conditions specified in its offer under the WTO General Agreement on Trade in Services (GATS).
Exclusions: Ukraine excludes the procurement of goods and services for the design, development and production of its currency, personal identification documents, and citizenship documents, including passports, and other documents requiring special security features.
European Union’s Terms for Ukraine’s Accession: The Committee Decision also indicates that the EU will provide Ukraine with access to all of the central government entities that it lists for its Member States – its second best coverage.
The Committee directed Ukraine to submit its instrument of accession within six months (by mid-May 2016); Ukraine’s accession will enter into force 30 days after its submission.
Jean Heilman Grier
November 16, 2015
New Procurement Opportunities under Revised GPA