Armenia Opens Public Procurement Market to EAEU Countries' Businesses: Deputy Minister

Armenia has opened its public procurement market to businesses from EAEU countries long before the general agreement signed in August 2023. This was announced by Deputy Minister of Finance Avag Avanesyan during a presentation on the mutual recognition of bank guarantees between EAEU countries in the National Assembly.

According to the agreement, the governments of the union countries or individual departments will accept financial guarantees from businesses not only from that country but also from banks of other EAEU countries when announcing public procurement tenders. Until this point, these guarantees were not mutually recognized, which hindered the establishment of a unified public procurement market within the EAEU. The adoption and ratification of this agreement will eliminate that barrier.

Avanesyan noted that Armenia had lifted this requirement for other EAEU countries several years ago, allowing companies from member states to participate in Armenian procurement tenders with guarantees from their banks.

According to the agreement, banks are required to meet several criteria: they must not be undergoing a financial recovery process in the last six months, their capital must be at least 60 million USD, and their capital adequacy ratio (the ratio of a bank's capital to its risks) must be at least 12.5 percent.

A bank guarantee is required from the contractor if they fail to complete the work or supply the goods. In this case, the state can take the guaranteed amount from the contractor's account. If the bank creates obstacles for this, it will end up on the so-called “black list” for public procurement within the EAEU.

Gevorq Papoyan, the Chairman of the Standing Committee on Financial-Credit and Budgetary Affairs of the National Assembly, noted that Armenian construction companies currently have a surplus of orders domestically, considering the government's extensive projects for the construction of infrastructure, schools, and hospitals.