Russia limits foreign state IT purchases

Oct 3, 2016

RussiaThe Russian government has legislated a limiting on the “purchase of foreign electronic devices” including printers.

Russia Today reported on the decision by the Kremlin, which consists of a by-law “that limits state-run enterprises from buying foreign-made electronic devices” including mobile phones, laptops, tablets, cash registers, ATMs, LEDs, keyboards, monitors, TVs, scanners and printers, as well as TV cameras, camcorders, e-books, speakers and “many other devices” in a list of 100 products.

The government law means that “government-backed companies” will face the restrictions “only when there are two Russian or Eurasian Economic Union (EEU) producers in the bidding”, with the EEU a group established last year consisting of Russia, Armenia, Belarus, Kazakhstan and Kyrgyzstan, and Tajikistan a “prospective member”. This means that if there are “two Russian/EEU participants in the bidding, a request to buy foreign products should be turned down”.

The criteria for the law means that an electronic device “can be recognised as Russian if it is produced as part of a contract between the producer and Russia or if the production is localised in the country”. Russia Today noted that the same rules “were previously applied to software”, with this coming into effect “from the second half of the year”, with all state-backed companies needing to “switch to locally-produced software”.

With this law, if public authorities “want to buy foreign software, they must first consult with a special registry and make sure that there are no similar Russian products”, and if there are Russian alternatives, “authorities will have to explain why Russian software doesn’t suit their needs”. In turn, there are “import restrictions” that will affect the defence, mechanical engineering and medical devices markets.

The Russian Federal Anti-Monopoly Service criticised the new law, and the “decision to limit imports”, noting that it will lead to “higher prices without improving the quality of products”, adding that “import substitution should be reduced to defence, pharmaceuticals and food”.

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