PPN 007 FAQs on Russian and Belarusian suppliers: the official answers, explained

The key facts

• This document is the FAQ companion to PPN 007, originally issued in August 2022 and updated in February 2025 alongside the parent note.
• There is no central policy mandate to terminate any contract with a Russian or Belarusian prime contractor. The decision rests with each contracting authority.
• The PPN does not apply to the Devolved Administrations, which will issue separate guidance.
• Neither Russia nor Belarus is a member of the WTO Agreement on Government Procurement, and the UK has no international agreements containing procurement obligations with either country.
• Where a bid is declined on this basis, the exclusion does not rely on the exclusion grounds in the Procurement Act 2023, though sections 26 and 27 checks still apply as normal practice.
• A prime contractor being terminated should be told the reason is the situation in Ukraine and the resulting sanctions.
• Local government FAQs are set out in questions 27 to 34, and confirm that best value authorities and parish councils are not required to review their contract portfolios.
• The Local Government (Exclusion of Non-Commercial Considerations) (England) Order 2022 came into force on 1 July 2022 and applies to call-offs from framework agreements as well as direct contracts.

What this document is and how it relates to PPN 007

This is the frequently asked questions companion to PPN 007, Contracts with suppliers from Russia and Belarus. It does not create policy of its own. It answers the questions that came back from practitioners trying to apply the parent note, and it should be read alongside it rather than instead of it. Like the parent PPN it was originally issued in August 2022 and updated in February 2025.

The scope answers mirror the parent note. In scope are all central government departments, their executive agencies and non-departmental public bodies awarding public contracts for goods, services or works other than special regime contracts, together with best value authorities in England within the meaning of section 1 of the Local Government Act 1999 and parish councils in England. Other public sector contracting authorities should consider applying the PPN. The Devolved Administrations are not covered and will issue separate guidance.

The document is organised into general questions, questions on existing contracts, questions on new contracts, and a block of local government specific questions at 27 to 34. That structure is a good guide to where the genuine ambiguity sat when the policy landed.

Existing contracts: what the FAQ actually permits

The single most important answer in the document is that there is no central policy mandate to terminate any contract with a Russian or Belarusian prime contractor. The government has called on relevant contracting authorities to exit relevant contracts at their earliest convenience, but the decision lies with the individual authority, and the FAQ accepts there may be valid financial, operational, national security or commercial reasons why a contract cannot or should not be terminated.

On mechanics, the FAQ expects contracts to contain clear termination clauses, which may allow termination with or without notice and without cost, for example a break clause, or termination for convenience with a defined calculation of payments due. Where a decision to terminate is made, the guide is to take the option that results in the lowest overall payment to the prime contractor on a whole life cost basis. Any additional costs arising from termination need to be covered by existing budgets.

It also names the scenario nobody plans for: terminating a contract can benefit the supplier. The worked example is a fixed three-year contract priced below the prevailing market. Terminate it and the supplier can sell at the higher market rate, while the authority replaces the contract at that same higher rate. That is a reason to assess rather than to act reflexively.

On critical contracts the FAQ is firm. Critical contracts should not be terminated before a suitable alternative solution is available that can be implemented without disproportionate cost, and contracts with no alternative source of supply should not be terminated unless the authority is assured the risk is manageable. On subcontractors it is equally clear: where Russian or Belarusian subcontractors are identified, you should understand the impact on the supply chain and discuss the links with your prime contractor, but there is no requirement at this stage to consider terminating those subcontracts.

New contracts, verification and the treaty state limit

For new procurements, the FAQ confirms it is possible to decline to consider bids from suppliers 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. The condition is that neither the supplier nor any member of the supply chain relied on to deliver the contract is a UK supplier or a treaty state supplier. Where that condition is not met, the supplier should not be automatically excluded, because the non-discrimination provisions of the Procurement Act 2023 apply.

A subtle but useful answer concerns the legal route. Excluding a supplier in this context does not rely on the exclusion grounds in the Procurement Act 2023, and it is not necessary to consider them, because there is no obligation under the Act to consider non-treaty state suppliers. You must still check for the absence of exclusion grounds in accordance with sections 26 and 27 as a matter of normal practice. The FAQ also confirms neither Russia nor Belarus is a GPA member and the UK holds no procurement agreement with either.

On verification, the FAQ points first to the information suppliers upload as Supplier's Basic Information on the central digital platform, which should normally cover supply chain details and Persons of Significant Control. Beyond that, conduct due diligence in the usual way using the Companies House Register and other open sources, or seek verification directly from the supplier. It also spells out what a Person of Significant Control is: someone holding more than 25 per cent of shares, more than 25 per cent of voting rights, or the right to appoint or remove the majority of the board, with a narrower category for those exercising significant influence or control by other means.

Where the supply chain information is not available directly, the FAQ tells you where to go. If the contract sits under a framework agreement, contact the framework owner. For Crown Commercial Service agreements, that is the CCS helpdesk. Full supply chain mapping to source should not be necessary to execute the actions in the PPN, though you must hold enough information to identify and assess risk effectively.

The local government answers

Questions 27 to 34 exist because section 17 of the Local Government Act 1988 generally prohibits authorities from taking non-commercial considerations, including the location or country of origin of a supplier, into account in procurement decisions. The Local Government (Exclusion of Non-Commercial Considerations) (England) Order 2022, in force from 1 July 2022, disapplies the prohibition in section 17(5)(e) in respect of Russia and Belarus so that best value authorities and parish councils can apply this PPN.

What the Order permits is specific. The country or territory of origin of entities, covering suppliers and subcontractors, can be taken into account where the country of origin of supplies to the contractor is the Russian Federation or the Republic of Belarus, or where the location of the business activities or interests of a contractor is Russia or Belarus. The reach extends to a supplier or customer of the contractor, a subcontractor of either, and associated bodies, which is why the FAQ confirms that a contractor with a significant Russian or Belarusian customer base can be considered. The Order also covers call-offs from framework agreements, because it applies to all procurement functions.

Crucially, none of this is compulsory. Local government authorities are not required to review their contract portfolios. They should consider whether it is proportionate to conduct a risk assessment and review, bearing in mind resource implications, and act accordingly. The FAQ frames the Order as enabling a flexible approach requested by council leaders, and notes that because it mandates nothing it creates no new burden.

Two other duties are addressed. The Best Value Duty under section 3 of the Local Government Act 1999 still applies, and the FAQ warns that terminating contracts for non-commercial reasons, paying significant termination charges or moving to a more expensive alternative could be incompatible with it depending on the circumstances. Social value under section 1 of the Public Services (Social Value) Act 2012 applies only at the pre-procurement stage, so it is relevant to replacement procurements but not to contract termination.

How eSourcing Data helps

Most of the FAQ answers reduce to a single operational question: can you find the information quickly enough to make a proportionate decision. eSourcing Data holds contract and supplier records together, including ownership and Persons of Significant Control detail, framework provenance and identified subcontractors, so the questions the FAQ answers in theory can be answered against your own portfolio in practice.

The document repeatedly stresses documented, approved decisions and the whole life cost view of termination options. The platform captures the assessment, the notice period and cost comparison, the recommendation and the approvals it passed through, so that a decision not to terminate is recorded as deliberately as a decision to terminate. That is exactly the audit trail the parent PPN asks for.

For new procurements, eSourcing Data supports selection stage capture of supplier basic information, group structure and supply chain declarations, and lets you flag where a treaty state or UK supplier check must be completed before any bid is declined. It handles the notices and below-threshold workflows alongside, so the same record supports both the policy decision and the transparency obligations that follow it.

What to do about it

1. 1Read the FAQ alongside PPN 007 rather than on its own, and use it to settle scope and process questions before starting a portfolio review.
2. 2Record explicitly that termination is discretionary, and document the financial, operational, national security or commercial reasons where you decide not to terminate.
3. 3Compare termination options on a whole life cost basis, including notice periods, penalties and supplier switching costs, before recommending a route.
4. 4Use supplier information from the central digital platform first, then verify through Companies House and other open sources, or directly with the supplier.
5. 5Where the contract is under a framework, request supply chain information from the framework owner rather than attempting full supply chain mapping.
6. 6In local government, decide and minute whether a portfolio review is proportionate, and test any proposed termination against the Best Value Duty.
7. 7Build a treaty state and UK supplier check into new procurements, and keep sections 26 and 27 exclusion grounds checks running as normal practice.