UKRAINIAN-CZECH OFFSET CONSULTING
24.11.2010 | 11:16 |

With the purpose of studying the practice of state regulation of offset activities and working over of normative and legal base that regulates the relations in the sphere of state defense procurement of the Czech Republic, on October 26 to October 28 the Ukrainian delegation visited Prague to participate in the bilateral consultations with the representatives of the Ministry of Industry and Commerce of the Czech Republic. The Ukrainian delegation consisted of Yurii Oleksandrovych Mityaev, Deputy Director of the Department of Defense and Safety Economy, Director of the Department of Special Programs and Military-Technical Cooperation, and Yulia Vyacheslavivna Malyshenko, Director of the Department of Economic Cooperation with NATO.

 

During the bilateral Ukrainian-Czech offset consulting, the Ukrainian delegation informed the representatives of the Ministry of Industry and Commerce of the Czech Republic about the situation with the application of offset schemes in Ukraine. Namely, it was spoken about the need to establish legislative bases in Ukraine to work in the direction of the offset schemes implementation. The Ukrainian delegation noted that the Ministry of Economy of Ukraine initiated making amendments in the Law of Ukraine УOn State Defense ProcurementФ in the part of regulation of the process of procurement of products, works and services of defense purposes by import. After the mentioned Law enters into force, the procedure of entering compensation (offset) agreements shall be developed.

Within the frameworks of the specified event, the representatives of the Ministry of Industry and Commerce of the Czech Republic familiarized the Ukrainian delegation with the normative acts and guiding documents on offset activity valid in the Czech Republic; the procedure of preparation, entering into and enforcement of offset agreements (contracts) with military products exporters.

The director of the Department of Industry, Research and Development, M.Stykha, familiarized the Ukrainian delegation with the authorities, staff and tasks of the Offset Commission Ц a consulting and advisory agency of the Ministry of Industry and Commerce of the Czech Republic, the competence of which includes matters of analysis of offset offers from foreign suppliers, preparation of offset agreements, coordination of activities of state agencies during the enforcement of offset agreements and monitoring of enforcement of concluded offset agreement.

Z. Khrustovski, the specialist of the department of strategy of industrial and offset activity, made a presentation on the legislative regulation of offset activity of the Czech Republic. During his speech, Mr. Khrustovski notified the members of the Ukrainian delegation about the changes of offset legislation in the part of increase of the contract price for purchase of equipment and services from a foreign supplier from 500 million crowns to 1 billion crowns, and the contract with a domestic contractor Ц from 250 million crowns to 500 million crowns.

Also, Mr. Khrustovski paid attention to the peculiarities of preparation of offset contracts by the Czech Republic, namely, the Czech Republic stopped using the offset multiplier due to the subjective approach to the evaluation of contract value and established the minimal sanctions for failure to enforce the contract in the amount of 5% of the total contract value.

After the presentations, the representatives of the Ministry of Economy of Ukraine, Yu. Mityaev and Yu. Malyshenko offered a series of matters for discussions: the number of offset contracts entered into between the Czech Republic and foreign companies, the course of enforcement of these contracts, analysis of completed contract and matters related to the practical part of preparation of offset contracts Ц authorities and duties of the state agencies which act as parties to such contracts, as well as the role of the Offset Commission in the monitoring of contract enforcement. Exhaustive answers were obtained for all questions.

After the event, the parties exchanged informational and analytical materials and templates of normative and legal acts valid in Ukraine and the Czech Republic and regulating the specified sphere of activity.

After discussion of the agenda, the parties also reached an agreement on having further consultations dedicated to the exchange of experience between Ukraine and the Czech Republic on utilization of military property unsuitable for further use or storage.

The efficiency of bilateral Ukrainian-Czech offset consulting has been confirmed by the importance of studying the experience of the Czech Republic on application of compensation (offset) schemes at the procurement of arming and military machinery, as well as the opportunities of its introduction and application in Ukraine.