New Jersey Division of Local Government Services Local Finance Notice 2023-11

Local Finance Notice 2023-11 Persons and Entities Engaging in Prohibited Activities in Russia or Belarus; Russia-Belarus & Iran Investment Certification for Vendors and Contractors

• P.L. 2022, c. 3, signed into law on March 9, 2022, required the Treasury to develop a list of persons and entities engaging in prohibited activities in Russia or Belarus.

Key Terms

• The phrase “engaging in prohibited activities in Russia or Belarus” is defined as companies that support, assist, or facilitate the Governments of Russia or Belarus in their campaigns to invade the sovereign country of Ukraine.
• A “person or entity” is any natural person, corporation, company, limited partnership, limited liability partnership, limited liability company, business association, sole proprietorship, joint venture, partnership, society, trust, or other nongovernmental entity, organization, or group.
• The Russia-Belarus law applies to entities such as non-profits, local governments, and state agencies, but not to federal government agencies.

Impact on Procurement

• Treasury’s Russia-Belarus list prohibits persons and entities from entering into or renewing contracts with State agencies, State colleges and universities, and local public contracting units.
• Investor-owned, BPU-regulated utility companies are not subject to the Russia-Belarus vendor certification requirement for payment of electric, gas, water, or sewer bills. However, a contract for energy supply separate from distribution would be subject to the requirement.
• Vendors and contractors are required to certify that they are not identified on Treasury’s Russia-Belarus list before being awarded a State contract. A contracting unit may choose to apply its own local quote threshold to the Russia-Belarus certification.
• If a person, parent entity, subsidiary, or affiliate has engaged in prohibited activity in Russia or Belarus, that person must provide a detailed and precise description of such activities to the contracting unit before the contract can be entered into.
• The law states that a contracting unit may rely on a vendor’s or contractor’s Russia-Belarus list, but if the contracting unit becomes aware of credible information indicating a certification may be false, it may terminate the contract and report the false certification to the Attorney General.
• Cooperative purchasing systems and State contracts available for local use require the lead agent to obtain the Russia-Belarus certification prior to awarding a contract. Local contracting units are responsible for obtaining their own Russia-Belarus certification from the vendor or contractor.
• The Russia-Belarus law does not contain a provision addressing emergency contracts, but contracting units should notify the vendor or contractor of the certification requirement at the time of award and hold off on final payment until receiving the completed certification.

Local Finance Notice 2023-11

Please follow the link below to read more about these items and guidance on how your local unit can implement them: https://www.nj.gov/dca/divisions/dlgs/lfns/23/2023-11.pdf

Contact Wielkotz & Company, LLC Today

For further information on Local Finance Notice 2023-11 and its implementation feel free to reach out to Steven Wielkotz at (973)-835-7900 ext. 201 or sdw@w-cpa.com.