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Dear clients and cooperation partners,
With the coming of autumn, we can look at the harvest of amendments to laws on public procurement, with special focus on amendments to Latvia’s Law On International Sanctions and National Sanctions.
What must be done? Iepirkuma veicējam
As from 12.07.2018, Section 11.1 of the Latvian Law On International Sanctions and National Sanctions imposes an obligation of the contracting authority to check and confirm that a candidate or applicant for the right to enter into a contract is not subject to international or Latvian sanctions or sanctions imposed by a member state of the EU or NATO affecting contract performance and which significantly affects the interests of the financial and capital market (’sanctions’).
More information about sanctions and sanction lists can be obtained from the website of the Latvian Ministry for Foreign Affairs here.
Which procurements must be checked?
Checks must be carried out for every procurement that applies any of the procedures specified in the Public Procurement Law, the Law on Procurement of Public Utility Providers, the Law on Procurement in the Defence and Security Sector, or the Law On Public-Private Partnership, including the simplified procurement procedure.
Who should be checked?
The requirement covers candidates and applicants for the right to enter into a procurement contract: all must be checked.
Absence of sanctions should be checked and confirmed for each candidate or applicant, as well as their board and council members, signatories and procura holders, and persons authorised to represent the candidate or applicant in branch operations. If the candidate or applicant is a partnership, then each member of the partnership should also be checked.
The same checks are to be carried out on each indicated subcontractor whose part of the construction works or services amounts to at least 10 per cent of total contract value, as well as anyone on whose abilities the candidate or applicant relies, to confirm that their qualifications comply with the specified requirements.
What are the consequences of sanctions?
Candidates or applicants ‒ or their officials or signatories ‒ on whom sanctions have been imposed should be excluded from participation in the public procurement procedure.
If it turns out that sanctions have been imposed on a subcontractor or a person on whose abilities the candidate or applicant relies, or their officials or signatories, then the candidate or applicant has the option to replace that subcontractor within 10 business days by following a procedure specified in regulatory enactments under which the procurement procedure is organised. A candidate or applicant who fails to replace this person within 10 business days after a warning has been issued or sent should be excluded from the procurement procedure.
What should be specified in the contract?
The law also requires public procurement contracts to include the right to withdraw from a contract that cannot be performed because sanctions have been applied during performance of the contract.
This obligation does not apply to procurement procedures initiated or announced before 12.07.2018. |
