Administrative liability for non-compliance with localisation requirements

On 25 August 2025, a Draft Law “On Amendments to Article 164-14 of the Code of Ukraine on Administrative Offences Regarding Liability for Failure to Comply with the Requirements for the Degree of Localisation of Production in the Field of Public Procurement” was registered in the Verkhovna Rada of Ukraine.

Firstly, it should be noted that, according to paragraph 29-1 of part one of Article 1 of the Law of Ukraine “On Public Procurement”, the degree of localization of production is the share of local components (raw materials, materials, components, works or services) in the cost of the goods being procured.

The Draft Law proposes amendments that, in particular, establish administrative liability for:

not establishing requirements for the degree of localisation in accordance with the legislation in the tender documentation. Such a violation is punishable by a fine of 1 700 ₴ on the customer’s officials (officers) and authorised persons;
purchasing goods without considering the requirements established by law regarding the degree of localization of production. A fine of between 25 500 ₴ and 51 000 ₴ is envisaged for the customer’s officials (officers) and authorised persons.

It is important to note that localization does not apply to procurements below UAH 200 000 and to procurements whose value is equal to or exceeds the thresholds of the relevant international agreements entered into by Ukraine that regulate public procurement.

We will closely monitor further changes in the status of this Draft Law and report on them in future Legal News.