The government is launching a program to support Ukrainian mechanical engineers by guaranteeing the participation of manufacturers of domestic products in electronic auctions. It will be implemented with the help of a localization tool that provides requirements for the origin of products sold through the Prozorro system. 

“The purpose of the program is to stimulate the mechanical engineering industry by creating demand for such products. As a result, we expect tens of thousands of new jobs, an increase in tax revenues to the budget, and an increase in GDP, which will allow us to speed up the recovery of the Ukrainian economy,” emphasized Yuliia Svyrydenko, First Vice Prime Minister – Minister of Economy of Ukraine 

In order to ensure the practical implementation of the program, the Government has adopted the procedure for confirming the share of domestic components in products, which is carried out by the following algorithm:

• The manufacturer calculates the cost price of the product – separately imported and Ukrainian components, and determines the share of localization by the established formula. Goods in which at least 10% of the internal component is produced in the territory of Ukraine are allowed to participate in public procurement;
• The results of calculations are submitted to the Ministry of Economy together with an application for inclusion of products in the list of goods that correspond to the degree of localization;
• The Ministry automatically checks the arithmetical correctness of the calculations provided and enters the goods into the register;
• After that, the manufacturer gets the opportunity to participate in public procurement;
• To exclude possible data manipulation, after winning the auction, the product supplier is obliged to provide the customer with calculations concerning the level of localization for the supplied goods or batch of goods. 

Among the types of products to which the aforementioned requirements apply are ambulances, fire trucks, electric buses, individual parts such as engines, turbines, pumps and compressors, etc.

These requirements do not apply to products from countries with which Ukraine has signed Free Trade Agreements as well as to the goods of participants in the Government Procurement Agreement. These are, inter alia, EU countries, Japan, the USA, South Korea, Singapore, Hong Kong and Canada. (The full list of countries and threshold values as an exception are published on the official website of the Ministry of Economy).

The Government has also approved the procedure for monitoring compliance with the requirements for the degree of production localization. It is conducted once every six months by the Ministry of Economy to minimize risks.