Russia’s Ministry for Industry and Trade has declared a list of western-made aircraft and other equipment that will be restricted for purchase by all those Russian companies which are partially owned by the state, without prior approval by a special commission for imports substitution. The new rule becomes effective from July 1, 2018.
The list of restricted items, which are subject to approval prior to purchase, lease or rent, includes all passenger and cargo aircraft and helicopters with unit costs exceeding 200 million rubles (approx US$3.2 million), and with a total annual procurement cost exceeding one billion rubles.
The restrictions also apply to airworthiness services for airframes and engines with the cost of a single visit exceeding two million rubles and annual contract costs exceeding 50 million. Notably, only several makes of light helicopters such as Robinson, are exempt from the sanctions.
The law is effective for state-owned companies, corporations and their subsidiaries with more than 50 per cent of shares held by the Russian government. Those companies which fall under these definitions will not be able to purchase, lease, rent or service aircraft abroad if that cost exceeds a set limit, without previously coordinating such an arrangement with the authorities.
Last year, the government introduce amendments to the regulations which enabled it to demand airlines to coordinate their aircraft purchases with the Import Substitution commission. But it was then thought that the deal amount would start from one billion rubles.
These amendments to state-owned company procurement rules published in December 2017 are due to come into force in July 2018. The Ministry of Industry and Trade believes that restrictions on the purchase of western-built aircraft will foster the development of Russia’s own aerospace industry.
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