An amendment package to the Town Planning Code of the Russian Federation (hereinafter the Town Planning Code) adopted by Law No. 372-FZ dated 3 July 2016 "On the Introduction of Amendments to the Town Planning Code of the Russian Federation and Certain Legislative Acts of the Russian Federation" (hereinafter Law No. 372-FZ) entered into force on 1 July 2017. The following important amendments affect the membership requirements of self-regulating organisations working in the field of engineering surveys, design and construction (SRO):
- access certificates cease to be in effect;
- changes have been made to the list of persons who are required to join a SRO;
- subcontractors may not be members of SROs;
- technical client functions may only be performed by members of SROs;
- a member of an SRO must have on staff at least two specialists who are included in the national register;
- a foreign construction company may become a member of any SRO without having to comply with the regional principle.
We provide a brief overview of these amendments below.
New requirements on membership of self-regulating organisations
Prior to the entry into force of the amendments to the Town Planning Code, in order to perform work on engineering surveys, the preparation of design documentation, and also the construction, reconstruction and material repair of material construction assets, a company or an individual entrepreneur performing these or other types of work that affect the safety of these assets needed to have access certificates that would be issued by an SRO for the performance of respective types of work.
Effective 1 July 2017 it will no longer be necessary to obtain access certificates to perform these or other types of work, while the SRO certificates issued previously will cease to be in effect. Instead, membership of a self-regulating organisation is required. At the same time, changes have been made to the list of persons who are required to join an SRO in a corresponding field (engineering surveys, architecture and building design or the construction, reconstruction and capital repair of assets).
In accordance with the Town Planning Code in the version of Law No. 372-FZ, the following persons need to be members of SROs to perform work in the field of engineering surveys, design and construction:
- the property developer if it is performing the work using its own resources;
- the technical client, and also
- the contractor performing the work under a contracting agreement concluded with the following persons:
- the developer;
- the technical client;
- the person who received the permit for the use of a publicly-owned land plot to perform engineering surveys (under contracting agreements on the performance of engineering surveys);
- the person responsible for the operation of a building or facility (under contracting agreements on the performance of planning or construction work);
- the regional operator (under contracting agreements on the performance of planning or construction work).
Under the amendments, now only general contractors will have to be members of a self-regulating organisation. Subcontractors will be able to perform work without being members of SROs.
An SRO membership is not required according to the Town Planning Code in the following instances:
- if the work is performed by state and municipal unitary enterprises under contracts with the state authorities or local government authorities within whose jurisdiction they fall;
- if the contracts are concluded by organisations that are more than 50 per cent owned by state and municipal unitary enterprises and autonomous institutions;
- if the contracts are concluded by legal entities created as public legal entities, and also commercial organisations that are more than 50 per cent owned by such persons;
- if the contracts are concluded by legal entities which are more than 50 per cent owned by public legal entities, and commercial organisations that are more than 50 per cent owned by such persons, with the state authorities or local government authorities;
- if the amount of the obligations under the construction contracting agreement does not exceed RUB 3 million;
- if an individual is engaging in the construction, reconstruction or material repair of a free-standing residential building.
How does one become a member of a self-regulating organisation?
The requirements on members of self-regulating organisations are established by legislation and the internal regulations of the SRO. Each SRO drafts qualification standards which determine the qualifications of the employees performing employment activities regarding the implementation of engineering surveys, design and construction work (Article 55.5 of the Town Planning Code).
The minimum requirements on the members of an SRO are established by the Town Planning Code and include the following:
- the head of the organisation or individual entrepreneur has a higher education in the appropriate area and at least five years work experience in his specialization;
- the presence of at least two specialists regarding the organisation of engineering surveys/design/construction (chief engineers of projects or principal architects of projects) as their primary place of employment, information on whom is included in the national register of specialists in the field of engineering surveys and architecture and building design or in the national register of construction specialists (hereinafter the national registers).
The procedure for maintaining national registers and entering information in the register on the individuals was approved by Order No. 688/pr of the Ministry of Construction of Russia dated 6 April 2017, which also enters into force on 1 July 2017 (hereinafter Order No. 688).
The National Register of Specialists in the Field of Construction is maintained by NOSTROY, and the National Register of Specialists in the Field of Engineering Surveys and Design is maintained by NOPRIZ.
If companies perform work in respect of highly hazardous, technical complex or unique assets, the requirements imposed on them for membership of SROs may not be lower than the minimum requirements established by the RF Government. At present such requirements are established by Resolution No. 559 of the RF Government dated 11 May 2017 "On Approval of the Minimum Requirements on the Members of a Self-Regulating Organisation Performing Engineering Surveys, Engaging in the Planning of Documentation, the Construction, Reconstruction and Material Repair of Highly Hazardous, Technical Complex and Unique Assets", which entered into force on 1 July 2017.
The requirements on specialists in the organisation of engineering surveys/design/construction, and also the list of their official duties are established in Article 55.1-1 of the Town Planning Code. A respective specialist must comply with the following criteria to be included in the national list:
- have a higher education in a profession, specialization or area of training in the field of construction (the list is determined by Annex No. 2 to Order No. 688);
- have a work record of at least three years in an engineering position at organisations performing corresponding work;
- have an overall work record of at least ten years in a profession, spezialisation or area of training in the area of construction,
- upgrade his skills as specialist at least once every five years;
- have a work permit in the case of foreign citizens.
Special rules for foreigners
A foreign company that wants to join an SRO should bear in mind that a foreign legal entity may be a member of an SRO provided that it complies with the requirements imposed by a corresponding SRO on its members, and pays contributions to compensation funds.
This means that it is necessary to hire specialists on the basis of an employment contract (not civil contract) whose details have been entered in the national register. Furthermore, including a foreigner in this register depends on the holding of a work permit. An expiration of the effective term of the work permit or permit for temporary stay in the Russian Federation may be reason to remove the foreign specialist from the national register (Clause 23 or Order No. 688).
In addition, a foreign construction company is entitled to join any SRO without having to observe the regional principle introduced as a result of the amendments to the Town Planning Code,which stipulates that the construction organisation must be a member of the SRO registered in the same constituent subject of the Russian Federation as the actual organisation.