Foreign subsidies distorting the internal market in the context of public procurement procedures
Foreign subsidies that cause or risk causing a distortion in a public procurement procedure shall be understood as foreign subsidies that enable an economic operator to submit a tender that is unduly advantageous in relation to the works, supplies or services concerned. The assessment pursuant to Article 4 of whether there is a distortion in the internal market and whether a tender is unduly advantageous in relation to the works, supplies or services concerned shall be limited to the public procurement procedure in question. Only foreign subsidies granted during the three years prior to the notification shall be taken into account in the assessment.
Notification thresholds in public procurement procedures
1. For the purposes of this Regulation, a notifiable foreign financial contribution in a public procurement procedure shall be deemed to arise where:
(a)
the estimated value of that public procurement or framework agreement net of VAT, calculated in accordance with the provisions laid down in Article 8 of Directive 2014/23/EU, Article 5 of Directive 2014/24/EU and Article 16 of Directive 2014/25/EU, or a specific procurement under the dynamic purchasing system, is equal to or greater than EUR 250 million; and
(b)
the economic operator, including its subsidiary companies without commercial autonomy, its holding companies, and, where applicable, its main subcontractors and suppliers involved in the same tender in the public procurement procedure was granted aggregate financial contributions in the three years prior to notification or, if applicable, the updated notification, equal to or greater than EUR 4 million per third country.
2. Where the contracting authority or contracting entity decides to divide the procurement into lots, a notifiable foreign financial contribution in a public procurement procedure shall be deemed to arise where the estimated value of the procurement net of VAT exceeds the threshold laid down in paragraph 1, point (a) and the value of the lot or the aggregate value of all the lots to which the tenderer applies is equal to or greater than EUR 125 million and the foreign financial contribution is equal to or greater than the threshold laid down in paragraph 1, point (b).
3. Procedures for the award of contracts falling within the scope of Directive 2009/81/EC shall not fall under this Chapter.
4. Procedures for the award of contracts provided by Article 32(2), point (c), of Directive 2014/24/EU, and Article 50, point (d), of Directive 2014/25/EU shall be covered by the provisions of Chapter 2 of this Regulation and shall be excluded from the application of Chapter 4 of this Regulation.
5. By way of derogation from Article 29(1), where the works, supplies or services can be supplied only by a particular economic operator, in accordance with Article 31(4), of Directive 2014/23/EU, Article 32(2), point (b), of Directive 2014/24/EU and Article 50, point (c), of Directive 2014/25/EU and the estimated value of the contract is equal to or greater than the value set in paragraph 1, point (a), of this Article economic operators submitting a tender or a request to participate shall inform the Commission of all foreign financial contributions if the condition set out in paragraph 1, point (b) of this Article is fulfilled. Without prejudice to the possibility to initiate a review under Chapter 2 of this Regulation, the submission of such information shall not be considered a notification and shall not be subject to investigations under this Chapter.
6. The contracting authority or contracting entity shall state in the contract notice or, where a procedure without a prior publication is conducted, in the procurement documents, that the economic operators are under the notification obligation as set out in Article 29. However, the absence of such a statement is without prejudice to the application of this Regulation for contracts falling under its scope.
Prior notification or declaration of foreign financial contributions in the context of public procurement procedures
1. Where the conditions for the notification of financial contributions in accordance with Article 28(1) and (2) are met, economic operators participating in a public procurement procedure, shall notify the contracting authority or contracting entity of all foreign financial contributions as defined in Article 28(1), point (b). In all other cases, economic operators shall list in a declaration all foreign financial contributions received and confirm that the foreign financial contributions received are not notifiable in accordance with Article 28(1), point (b). In an open procedure, the notification or declaration shall be submitted only once, together with the tender. In a multi-stage procedure, the notification or declaration shall be submitted twice, first with the request to participate and then as an updated notification or updated declaration with the submitted tender or final tender.
2. Once the notification or declaration is submitted, the contracting authority or contracting entity shall transfer the notification or declaration to the Commission without delay.
3. Where a notification or declaration is missing from the request to participate or the tender, the contracting authority or contracting entity may request the economic operators concerned to submit the relevant document within 10 working days. Tenders or requests to participate from economic operators subject to the obligations specified under this Article and ultimately not accompanied by the notification or declaration submitted in accordance with paragraph 1, despite a request made by the contracting authority or contracting entity in accordance with this paragraph, shall be declared irregular and rejected by the contracting authority or contracting entity. The contracting authority or contracting entity shall inform the Commission of that rejection.
4. The Commission shall examine the content of the notification received without undue delay. Where the Commission finds that the notification is incomplete, it shall communicate its findings to the contracting authority or contracting entity and to the economic operator concerned, and request that the economic operator completes its content within 10 working days. Where a notification accompanying a tender or request to participate remains incomplete despite a request made by the Commission in accordance with this paragraph, the Commission shall adopt a decision declaring that tender irregular. In that decision the Commission shall also request the contracting authority or contracting entity to adopt a decision rejecting such an irregular tender or request to participate.
5. The obligation to notify foreign financial contributions under this Article shall apply to economic operators, groups of economic operators referred to in Article 26(2) of Directive 2014/23/EU, Article 19(2) of Directive 2014/24/EU and Article 37(2) of Directive 2014/25/EU, as well as to main subcontractors and main suppliers known at the time of submission of the complete notification or declaration, or complete updated notification or declaration. For the purposes of this Regulation, a subcontractor or supplier shall be deemed to be main where their participation ensures key elements of the contract performance and in any case where the economic share of their contribution exceeds 20 % of the value of the submitted tender.
6. On behalf of groups of economic operators, main subcontractors and main suppliers, the main contractor within the meaning of Directives 2014/24/EU and 2014/25/EU or main concessionaire within the meaning of Directive 2014/23/EU shall ensure the submission of the notification or declaration. For the purposes of Article 33, the main contractor or main concessionaire is responsible only for the veracity of data linked to its own foreign financial contributions.
7. Where the contracting authority or contracting entity examining tenders suspects the presence of foreign subsidies, although a declaration was submitted, it shall communicate such suspicions to the Commission without delay. Without prejudice to the powers of contracting authorities or contracting entities, laid down in Directives 2014/24/EU and 2014/25/EU, to examine whether a tender is abnormally low, the contracting authority or contracting entity shall not perform an assessment of whether a tender is abnormally low where such an assessment would be initiated on the suspicions indicating a possible presence of foreign subsidies alone. Where the Commission concludes that there is no unduly advantageous tender within the meaning of this Regulation, it shall inform the relevant contracting authority or contracting entity thereof. Other legal or natural persons may report to the Commission any information relating to foreign subsidies distorting the internal market and may communicate any suspicions that a false declaration has possibly been made.
8. Without prejudice of the possibility for the Commission to start an ex officio procedure, where the Commission suspects that an economic operator may have benefitted from foreign subsidies in the three years prior to the submission of the tender or request to participate in the public procurement procedure, it may before the award of the contract request the notification of the foreign financial contributions provided by third countries to that economic operator in any public procurement procedure which are not notifiable under Article 28(1) or fall within the scope of Article 30(4). If the Commission has required the notification of such a financial contribution, the financial contribution shall be deemed to be a notifiable foreign financial contribution in a public procurement procedure and be subject to the provisions set out in Chapter 4.
Procedural rules applicable to the preliminary review and the in-depth investigation of notified financial contributions in public procurement procedures
1. Articles 10, 11 (1), (3) and (4), 13, 14, 15, 16, 18 and 23 shall apply to notified financial contributions in public procurement procedures.
2. The Commission shall carry out a preliminary review no later than 20 working days after it receives a complete notification. In duly justified cases, the Commission may extend this time limit by 10 working days once.
3. The Commission shall decide whether to initiate an in-depth investigation within the time limit for completing the preliminary review and inform the economic operator concerned and the contracting authority or the contracting entity without delay.
4. Where the Commission had closed a preliminary review without adopting a decision and receives new information leading it to suspect that a submitted notification or declaration was incomplete, or where such a notification or declaration is not transferred to the Commission, it may request additional information in accordance with Article 29(4). The Commission may reopen a preliminary review based on this new information. Where the preliminary review is initiated under this Chapter, and without prejudice to the possibility to initiate a preliminary review under Chapter 2, as the need may arise, the starting point for the determination of the duration of the preliminary review is the receipt of the new notification or declaration by the Commission.
5. The Commission may adopt a decision closing the in-depth investigation no later than 110 working days after it has received the complete notification. This period may be extended once by 20 working days, after consultation with the contracting authority or contracting entity, in duly justified exceptional cases including the investigations referred to in paragraph 6 or in cases referred to in Article 16(1), points (a) and (b).
6. By way of derogation from paragraph 2, where the public procurement procedure is a multi-stage procedure, the Commission shall examine the complete notification submitted with the request to participate within 20 working days from the receipt of that notification, without closing the preliminary review or reaching a decision on opening an in-depth investigation. After the deadline of 20 working days elapses, the preliminary review shall be suspended until the submission of a final tender or a tender in the case of a restricted procedure. Once the tender or final tender containing a complete updated notification is submitted, the preliminary review shall be resumed and the Commission has 20 working days to finalise it, taking into account any additional information. The Commission shall adopt a decision closing any ensuing in-depth investigation within 90 working days from the submission of the completed updated notification.
Commission decisions
1. Where, after an in-depth investigation, the Commission finds that an economic operator benefits from a foreign subsidy distorting the internal market pursuant to Articles 4, 5 and 6, and where the economic operator concerned offers commitments that fully and effectively remedy the distortion in the internal market, it shall adopt an implementing act in the form of a decision with commitments pursuant to Article 11(3). That implementing act shall be adopted in accordance with the advisory procedure referred to in Article 48(2).
2. Where the economic operator concerned does not offer commitments or where the Commission considers that the commitments referred to in paragraph 1 are neither appropriate nor sufficient to fully and effectively remedy the distortion, the Commission shall adopt an implementing act in the form of a decision prohibiting the award of the contract to the economic operator concerned (‘decision prohibiting the award of the contract’). That implementing act shall be adopted in accordance with the advisory procedure referred to in Article 48(2). Following that decision, the contracting authority or contracting entity shall reject the tender.
3. Where, after an in-depth investigation, the Commission does not find that an economic operator benefits from a foreign subsidy distorting the internal market, it shall adopt an implementing act in the form of a decision pursuant to Article 11(4). That implementing act shall be adopted in accordance with the advisory procedure referred to in Article 48(2).
4. The assessment under Article 6 shall not result in a modification of the tender or final tender submitted by the economic operator that is incompatible with Union law.
Evaluations in public procurement procedures involving a notification and suspension of award
1. During the preliminary review and the in-depth investigation, all procedural steps in the public procurement procedure may continue, except for the award of the contract.
2. If the Commission decides to open an in-depth investigation pursuant to Article 30(3), the contract shall not be awarded to an economic operator submitting a notification under Article 29 until the Commission takes a decision under Article 31(3) or before the time limits set in Article 30(5) or (6) elapse. If the Commission has not adopted a decision within the applicable time limit, the contract may be awarded to any economic operator, including the economic operator submitting the notification.
3. Where the contracting authority or contracting entity finds that the most economically advantageous tender was submitted by an economic operator, which submitted a declaration within the meaning of Article 29 and where the Commission has not opened a review in line with Articles 29(8), 30(3) or 30(4), the contract may be awarded to the economic operator submitting such a tender before the Commission takes any of the decisions referred to in Article 31 or before the time limits laid down in Articles 30(2), 30(5) or 30(6) elapse or before the Commission takes any of the decisions referred to in Article 31 regarding other tenders under investigation.
4. Where the Commission adopts a decision in accordance with Article 31(2) concerning a tender which the contracting authority or contracting entity has found to be the most economically advantageous tender, the contract may be awarded to the economic operator not subject to a decision under Article 31(2) having submitted the next best tender.
5. Where the Commission adopts a decision in accordance with Article 31(1) or (3), the contract may be awarded to any economic operator having submitted the most economically advantageous tender, including, to the economic operator having submitted the notification under Article 29.
6. The contracting authority or the contracting entity shall inform the Commission without undue delay of any decision relating to the cancellation of the public procurement procedure, the rejection of the tender or request to participate by the economic operator concerned, the submission of a new tender by the economic operator concerned or the award of the contract.
7. The principles governing public procurement procedures, including the principles of proportionality, non-discrimination, equal treatment, transparency and competition, shall be observed as regards all economic operators involved in the public procurement procedure. The investigation of foreign subsidies pursuant to this Regulation shall not result in the contracting authority or the contracting entity treating the economic operators concerned in a way that is contrary to those principles. Environmental, social and labour requirements shall apply to economic operators in accordance with Directives 2014/23/EU, 2014/24/EU and 2014/25/EU, or other Union law.
8. Time limits referred to in this Chapter shall begin on the working day following that of the receipt of the notification or of the adoption of the relevant Commission decision.
Fines and periodic penalty payments applicable to financial contributions in the context of public procurement procedures
1. The Commission may impose fines or periodic penalty payments as set out in Article 17.
2. The Commission may, by decision, also impose fines upon the economic operators concerned that do not exceed 1 % of their aggregate turnover in the preceding financial year, where those economic operators intentionally or negligently supply incorrect or misleading information in a notification or declaration pursuant to Article 29 or in a supplement thereto.
3. The Commission may, by decision, impose fines upon the economic operators concerned that do not exceed 10 % of their aggregate turnover in the preceding financial year where those economic operators, intentionally or negligently:
(a)
fail to notify foreign financial contributions in accordance with Article 29 during the public procurement procedure;
(b)
circumvent or attempt to circumvent the notification requirements, as referred to in Article 39(1).
Source: EUR-Lex (Publications Office of the EU), © European Union, reuse permitted under Commission Decision 2011/833/EU.
