PPN 007: Contracts with Russia and Belarus · first published 17 February 2025
PPN 007 (originally August 2022, updated February 2025) tells public-sector buyers to identify any contracts where the prime contractor is a Russian or Belarusian entity and to consider terminating those contracts if it is legally and financially feasible. The update refreshes the language to align with the Procurement Act 2023 and Procurement Regulations 2024, which apply to procurements started on or after 24 February 2025. The policy does not change the underlying rules — it is a terminology refresh, not a new call to action. For new procurements, buyers may decline to consider bids from suppliers constituted under Russian or Belarusian law, unless the supplier qualifies as a UK supplier or a treaty-state supplier. If your business is UK-registered or treaty-state based but has a Russian or Belarusian parent company or a Person of Significant Control (a shareholder or director holding more than 25% of shares or voting rights, or the right to appoint/remove the majority of the board) who is resident in Russia or Belarus, you may be excluded from bids or face contract termination.
WHO THIS APPLIES TO
THE ENKII VIEW
For most UK SMEs this PPN is a risk-awareness document rather than a direct opportunity: if your business has any Russian or Belarusian ownership ties — even via a parent company — you face a real risk of exclusion from new bids or termination of existing contracts. Conversely, if you are a UK-based SME with no such links, contracts being exited by Russian/Belarusian incumbents may open replacement opportunities, particularly in energy supply. The key watch-out is the 'Persons of Significant Control' test: a shareholder holding more than 25% of shares or votes in your company who is resident in Russia or Belarus could trigger exclusion even if your firm is UK-registered.
1. Check your Companies House Persons of Significant Control (PSC) register now. If any PSC is resident in Russia or Belarus, or holds more than 25% of shares or voting rights, or can appoint/remove the majority of your board, document this and take legal advice on whether you could be excluded from public-sector bids or face contract termination.
SMEs with any Russian or Belarusian shareholders, parent companies, or directors — The PPN defines a Russian/Belarusian supplier to include UK-registered firms controlled by a PSC resident in Russia or Belarus, and buyers may exclude such firms from new procurements.
2. Prepare a clear, factual ownership narrative and supporting Companies House documents to present proactively during bid qualification stages, demonstrating that you qualify as a UK or treaty-state supplier and should not be automatically excluded.
SMEs that are UK suppliers or treaty-state suppliers with complex group structures involving Russian or Belarusian parent companies — The PPN states buyers must not automatically exclude UK or treaty-state suppliers but may scrutinise complex group structures — having evidence ready reduces the risk of being wrongly screened out.
3. Monitor public contract termination notices on Find a Tender and Contracts Finder for contracts previously held by Russian or Belarusian suppliers, and position yourself as a ready replacement supplier by ensuring your supply-chain is verifiably free of Russian/Belarusian links.
UK SMEs in energy supply, facilities management, or other sectors where Russian/Belarusian incumbents may be exiting — The PPN requires buyers to identify and consider terminating contracts with Russian/Belarusian prime contractors, creating replacement opportunities; energy markets are specifically flagged as the primary exposure area.
4. When completing supplier information on the central digital platform (Find a Tender/Procurement Act portal), ensure your PSC information is accurate, up to date, and clearly shows country of residency for all controlling persons — inaccurate data could trigger unnecessary exclusion reviews.
All SMEs bidding for public contracts — The PPN states buyers will use the central digital platform PSC data as a primary source to identify Russian/Belarusian connections, and may seek further verification directly from the supplier.
Every rule below quotes the official document verbatim.
The PPN applies to all central government departments, executive agencies, non-departmental public bodies, best value authorities, and parish councils in England for all contracts above and below Procurement Act 2023 thresholds. (All in-scope organisations; all contract values; all sectors)
“This Procurement Policy Note (PPN) applies to all central government departments, their executive agencies and non-departmental public bodies when awarding public contracts for goods and/or services and/or works… and to best value authorities within the meaning of section 1 of the Local Government Act 1999 (c. 27) and parish councils in England.”
The updated PPN applies to procurements commenced on or after 24 February 2025; procurements commenced before that date fall under the previous PPN 01/22. (All in-scope organisations)
“The Procurement Act 2023 and the Procurement Regulations 2024 apply to procurements commenced on or after 24 February 2025.”
A 'Russian or Belarusian prime contractor' means an entity constituted under Russian or Belarusian law, OR a UK-registered or UK-operating entity controlled by a Russian/Belarusian parent or by a Person of Significant Control resident in Russia or Belarus. (All in-scope organisations; all contract values)
“an entity registered in the UK or with substantive business operations in the UK, or another country but controlled by an entity based in Russia or Belarus e.g. a parent company or by 'Persons of Significant Control' (or beneficial owner is defined as holding i) more than 25% of shares in the company; and/or ii) more than 25% of voting rights in the company; and/or the right to appoint or remove the majority of the board of directors).”
Buyers may decline to consider bids from suppliers constituted under Russian or Belarusian law, or whose Persons of Significant Control are resident in Russia or Belarus, unless the supplier is a UK supplier or treaty-state supplier. (All in-scope organisations; new procurements commenced on or after 24 February 2025)
“you could decline to consider (or otherwise exclude from participating in the procurement) bids from suppliers who are constituted or organised under the law of Russia or Belarus, or whose 'Persons of Significant Control' information states Russia or Belarus as the place of residency, unless the supplier (or any member of their supply chain they rely on to deliver the contract) is a UK supplier or a treaty state supplier.”
A UK supplier or treaty-state supplier must NOT be automatically excluded from a new procurement even if it has Russian/Belarusian links, because the non-discrimination provisions of the Procurement Act 2023 apply. (All in-scope organisations; new procurements)
“If the supplier is a UK supplier or a treaty state supplier, the supplier should not be automatically excluded from a new procurement, as the non-discrimination provisions of the Procurement Act 2023 will apply.”
Buyers should only proceed to terminate a contract if a commercially acceptable termination provision exists, alternatives are available and affordable, and financial and other risks have been assessed and mitigated. (All in-scope organisations; existing contracts)
“Only proceed to terminate a contract if an alternative supplier can be sourced in line with value for money, affordability and with minimal disruption to public services.”
Energy supply contracts are flagged as the highest-risk area; specialist advice from an energy expert or public sector buying organisation must be sought before terminating an energy contract. (All in-scope organisations holding energy supply contracts)
“You must seek advice from an energy expert and/or a relevant public sector buying organisation before taking action to terminate an existing energy supply contract to ensure an alternative source of supply is available and affordable.”
The update is a terminology refresh only — organisations that reviewed their contract portfolio in 2022 do not need to repeat that exercise. (All in-scope organisations)
“This update does not constitute a change in policy or a new call for action… if an in-scope organisation reviewed its contract portfolio for contracts with Russian and Belarusian suppliers in 2022, it does not need to do so again now.”
Where volume-based contracts exist, reducing volume to zero can achieve the same effect as termination if formal termination is not feasible. (All in-scope organisations; volume-based contracts)
“Where volume-based contracts exist, a reduction in volume to zero could achieve the same effect if termination is not feasible.”
A Person of Significant Control is defined as holding more than 25% of shares, more than 25% of voting rights, or the right to appoint or remove the majority of the board of directors. (All in-scope organisations assessing supplier ownership)
“beneficial owner is defined as holding i) more than 25% of shares in the company; and/or ii) more than 25% of voting rights in the company; and/or the right to appoint or remove the majority of the board of directors”
Under the Procurement Act 2023, a contract termination notice must be published where the procurement commenced on or after 28 October 2024; for earlier contracts it is good practice to update the Contracts Finder notice. (Best value authorities and parish councils; contracts commenced on or after 28 October 2024)
“The Procurement Act 2023 requires the publication of a contract termination notice where the procurement which resulted in the relevant contract commenced on or after 28 October 2024.”
This briefing is enkii's interpretation of the official document — the official text always governs.
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