On 22 October 2024, the Court of Justice of the European Union (CJEU) delivered a significant judgment in Case C-652/22, addressing the rights of non-EU economic operators in EU public procurement procedures. This ruling clarifies the legal standing of companies from third countries without reciprocal procurement agreements with the EU, such as Turkey, in participating in EU public tenders.
Background of the Case
The case originated from a Croatian public procurement procedure for the construction of railway infrastructure, where Kolin İnşaat Turizm Sanayi ve Ticaret AŞ, a Turkish company, participated. After the contract was awarded to another bidder, Kolin challenged the decision, invoking EU procurement law. The Croatian High Administrative Court referred questions to the CJEU regarding the applicability of EU procurement directives to non-EU bidders.
Key Findings of the CJEU
a) Inapplicability of EU Procurement Directives to Non-EU Bidders
The CJEU ruled that EU procurement directives, specifically Directive 2014/25/EU, do not apply to economic operators from third countries that have not concluded an international agreement with the EU guaranteeing equal and reciprocal access to public procurement markets. Consequently, such operators cannot rely on the provisions of these directives, including the right to equal treatment and non-discrimination, in EU public procurement procedures.
b) Exclusive EU Competence in Regulating Third-Country Access
The Court emphasised that the European Union holds exclusive competence in regulating access to its public procurement markets for third-country operators. This competence is grounded in the EU’s common commercial policy, as outlined in Article 3(1)(e) TFEU. Therefore, Member States cannot unilaterally legislate or adopt binding acts concerning the participation of economic operators from third countries without EU agreements.
Discretion of Contracting Authorities
While non-EU bidders without reciprocal agreements cannot invoke EU procurement law, the Court acknowledged that contracting authorities may still allow such operators to participate in specific procurement procedures. However, any participation is at the discretion of the contracting authority and must be assessed on a case-by-case basis. Additionally, contracting authorities may include provisions in the procurement documents to account for the objective differences in the legal situation of these operators.
Implications for Non-EU Contractors
The ruling has significant implications for non-EU contractors, particularly those from countries like Turkey that do not have procurement agreements with the EU. These contractors are now aware that they cannot rely on EU procurement directives to challenge procurement decisions or claim equal treatment in EU public tenders. Their participation is contingent upon the discretion of the contracting authority and the specific conditions set forth in each procurement procedure.
In real terms, this means near neighbours of the EU, that do not have reciprocal arrangements through the World Trade Organiations GPA or an equivalent bi-lateral arrangement need to think twice about bidding into EU processes. Given the global trade tensions, this ruling may acquire greater significance for contracting authorities.
Sources:
Judgment of the Court (Grand Chamber) of 22 October 2024.
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A62022CJ0652
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