EU requires reciprocity in public procurement
On 23 June, the EU adopted a regulation on the reciprocity of public procurement. The regulation aims to give EU companies better access to public procurement markets outside the EU in the so-called third countries.
The regulation will give the EU the opportunity to restrict the access of economic operators, goods and services from a third country to the European public procurement market if the third country does not give EU companies sufficient access to its public procurement market. The restrictions will only apply to non-covered procurement, that is, goods and services that are not subject to an international commitment on procurement between the EU and a third country. Least-developed countries will be excluded from the scope of the regulation.
The EU may restrict access to its public procurement market only if the European Commission has, after an investigation and/or consultations, determined the existence of a restrictive measure or practice and the barrier has not been removed despite consultations. The Commission may initiate an investigation itself or an investigation may be proposed by an EU operator, such as a company, an interest organization representing employers or employees or by an EU Member State. When the Commission initiates an investigation, it publishes a notice in the Official Journal and invites the third country in question to provide further information and to enter into consultations. The investigation and consultations shall be concluded within nine months. They may be extended by five months for justified reasons.
Restrictions apply to large contracts
The Commission may impose restrictive measures only against procurement procedures that have a total value of at least EUR 5 million for goods and services and at least EUR 15 million for works and concessions. In practice, the restrictive measures imposed against a tendering process in the EU may involve a penalty to the scoring of tenders submitted by companies from a third country subject to restrictive measures or such tenders may be excluded entirely from award procedures. In procurement procedures subject to restrictions successful tenderers will be obligated to restrict the proportion of goods and services originating from a third country to no more than 50 per cent of the total value of the contract. This obligation applies to all tenderers, including EU companies.
The regulation will enter into force on 29th August 2022. The regulation will have no real impact on procurement procedures until the EU imposes its first restrictive measures. The regulation will affect the procedures of procurement authorities in the EU and in Finland when calls for tender fall within the scope of the restrictions and the content of concluded procurement contracts.
It is important that Finnish companies take account of the possibility of restrictions when bidding in calls for tenders in Finland and elsewhere in the EU. They should be particularly careful when dealing with goods and services originating from countries subject to restrictions.
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