Restrictions and Protection of Third Country Contractors in the European Market

Subjects of Judgement:

The two ECJ judgments C-652/22 of 22 October 2024 and C-266/22 of 13 March 2025 concern the possibility for an entity established in the European Union to exclude or remove an economic operator from a third country in the framework of a public procurement procedure.

What is an economic operator??

According to the wording of EU Directives 2014/23/EU, 2014/24/EU, 2014/25/EU, the term ‘economic operator‘ means any natural or legal person, public entity or group of such persons or entities, including temporary associations of companies, which offers on the market the execution of works or a work, the supply of products or the provision of services. At the same time, these Directives do not contain a specific definition of a “third-country economic operator”. In practice, therefore, an economic operator from a third country is considered to be a contractor whose registered office is not located on the territory of a Member State of the European Union.

Special protection for economic operators from third countries

The European Union is bound by international agreements with certain third countries, in particular the World Trade Organisation (WTO), known as the Government Procurement Agreement (GPA), which guarantee, on a reciprocal and equal basis, access for EU economic operators to public procurement contracts in these third countries and access for economic operators from these third countries to public procurement contracts in the EU. The protection of economic operators from third countries is implemented within the framework of the above-mentioned directives by guaranteeing that they “shall enjoy treatment no less favorable than that accorded to works, supplies, services and economic operators of the Union in respect of the award of public procurement contracts“.

Restrictions for economic operators from third countries

The cases reviewed by the ECJ, Rs: C-652/22 and C-266/22, dealt with the issue of limiting the participation of economic operators from third countries that have not concluded the relevant agreements with the European Union on public procurement. In Case C-652/22, the Turkish consortium KOLIN, disappointed with the selection of another bidder, appealed against the decision of the Croatian company responsible for managing the railway infrastructure in Croatia concerning the tender organised by that company. The case was eventually brought before the ECJ, which ruled, inter alia, that in the absence of an international agreement on international cooperation in the field of public procurement between Turkey and the European Union, the Turkish contractor was not entitled to the special protection of Directive 2014/24/EU. Even the fact that a non-EU contractor was allowed to participate in a tender did not guarantee that it would be granted special protection.

The subject of these considerations was developed in the context of another case considered by the ECJ, case number C-266/22. In that case, a Chinese consortium consisting of CRRC Qingdao Sifang Co. Ltd and Astra Vagoane Călători SA was excluded from an open tender procedure on the basis of a Romanian national provision because it was not included in the list of entities authorised to participate in tenders under Romanian law. The ECJ recognized that it is the exclusive competence of the European Union to establish both subjective and objective restrictions in the field of public procurement. Therefore, a Member State (in this case, Romania) does not have the right to legislate in this area. The decision on the possible exclusion from the tender is the sole prerogative of the contracting authority (i.e. the entity announcing the tender).

Summary

According to the above-mentioned judgments, economic operators from third countries whose countries have not concluded relevant agreements with the European Union (here: Turkey or China) are not in a privileged position, i.e., such as operators from individual European Union countries. The lack of protection through “no less favorable treatment” means that the conditions imposed on such entities from outside the European Union may be worse, i.e., usually more difficult to meet, than those imposed on entities from the European Union.

At the same time, the legislation of individual European Union countries cannot enter into the matter of establishing restrictions or exclusions in the field of public procurement, as the European Union has not transferred any powers in this area. Once again, all responsibility and decision-making power have been transferred to the contracting authority (i.e., the entity announcing the tender).

As a result of the above-mentioned ECJ rulings in Poland, a government initiative is currently underway to amend the Public Procurement Act. According to the information provided by the government, the new approach envisages the introduction of an obligation for the contracting authority to determine on a case-by-case basis whether and under what conditions economic operators from countries outside the European Union, which have not concluded an appropriate agreement with the European Union in this respect (e.g. China), will be admitted to tender.

📞 If you have any questions, we are here for you!