# EUR-Lex - 52012PC0124 - EN

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# 52012PC0124

**Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the access of third-country goods and services to the Union’s internal market in public procurement and procedures supporting negotiations on access of Union goods and services to the public procurement markets of third countries /* COM/2012/0124 final - 2012/0060 (COD) */**

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EXPLANATORY MEMORANDUM

1.           CONTEXT OF THE PROPOSAL

Grounds for and objectives of the
proposal

This is a new proposal
in the area of the European Union’s international procurement policy. The key
objective of this initiative is to improve the conditions under which EU
businesses can compete for public contracts in third countries. Currently, EU
suppliers face manifold restrictive procurement practices in many of the
countries that are the EU’s main trading partners. Moreover, the initiative confirms
the legal status of bidders, goods and services from countries that have an international
agreement with the EU in the area of public procurement and clarifies the rules
applicable to bidders, goods and services not covered by these agreements.

General context

In the negotiations on a revised Government
Procurement Agreement (GPA) in the context of the World Trade Organisation
(WTO) and in bilateral negotiations with third countries, the EU has advocated
an ambitious opening of international public procurement markets. Some €352 billion of EU public
procurement is open to bidders from member countries of the WTO agreement on
government procurement.

However, many third countries are reluctant
to open their procurement markets to international competition or to open those
markets further than what they have already done. The value of US procurement offered to foreign
bidders is currently just €178 billion and €27 billion for Japan, whereas only
a fraction of the Chinese public procurement market is open to foreign business.
Many countries have also adopted protectionist measures, especially in the wake
of the economic crisis. All in all, more than half of the world’s procurement
market is currently closed due to protectionist measures and this share is only
growing. As a result, only €10 billion of EU exports
(0.08% of EU GDP) currently find their way in global procurement markets, whereas
an estimated €12 billion of further EU exports remains unrealised due to
restrictions.

In contrast, the EU has kept its public procurement
market largely open to international competition, despite growing pressure on
its domestic market, in particular from emerging economies on certain key
sectors (railways, construction, IT services). With the exception of some
provisions limited in scope to supply and service contracts in the utilities sector[1],
the EU has not exercised its power to regulate the access of foreign goods,
services and companies to the EU’s public procurement market.

Given the rising importance of emerging
economies, the absence of a level playing field causes many problems. The EU’s
principal problem is a lack of leverage in its international negotiations with
trading partners to redress the imbalance and to gain substantial market access
commitments for the benefit of EU business. Also, contracting authorities lack
a clear framework to be able to apply the international commitments of the EU.

This initiative aims at solving these
problems by firstly strengthening the position of the European Union when
negotiating access for EU companies to the public procurement markets of third
countries, in order to open up our trading partners’ markets. Secondly, for
this purpose it seeks to clarify the rules governing access by third-country
companies, goods and services to the EU’s public procurement market. Ultimately
the objective is to improve, in line with the EU’s 2020 strategy, business
opportunities for EU firms on a global scale, thereby creating new jobs and
promoting innovation.

Existing provisions in the area of the
proposal

The two basic public procurement directives
of the European Union[2] do not provide a general framework for dealing with bids containing
foreign goods and services on the EU’s public procurement market. The only specific
rules are set out in Articles 58 and 59 of Directive 2004/17/EC. However, these
provisions are limited to procurement by utilities and are too narrow in their
scope to make a substantial impact on negotiations on market access. Indeed the
EU public procurement for Utilities only stands for around 20% of the total EU
public procurement market.

In the Commission proposal on the
modernization of the EU rules on public procurement, the Commission decided not
to take over Article 58 and 59 of the Utilities-directive, in view of the
present initiative[3].

Consistency with the other policies
and objectives of the Union

This initiative implements the Europe 2020 strategy for smart,
sustainable and inclusive growth [COM(2010) 2020] and the Europe 2020 Flagship
Initiative on Integrated Industrial Policy for the Globalisation Era [COM(2010)
614]. It also implements the Single Market Act [COM(2011) 206] and the
Communication on Trade, Growth and World Affairs [COM(2010) 612]. It is a CWP 2011
strategic initiative (COM(2010) 623 final).

This proposal is also consistent with the
developmental policies and objectives of the Union, in particular by generally
sheltering goods and services from least-developed countries from action under
this instrument.

2.           RESULTS OF CONSULTATIONS WITH THE
INTERESTED PARTIES AND IMPACT ASSESSMENTS

Consultation of interested parties

To gather the
views of stakeholders, the Commission organised, in addition to individual
meetings, a series of consultations and outreach activities.

An open
internet consultation was carried out between 7 June and 2 August 2011. It
consisted of three detailed questionnaires aimed at (i) contracting authorities
and Member States (MS), (ii) businesses and/or their representatives, and (iii)
other potentially interested parties (citizens, NGOs, trade unions). The
Commission received a total of 215 contributions[4]. A summary
report of the contributions is given in Annex I to the Impact Assessment
report. As part of this process the Commission organised a public hearing
on 8 July 2011 in Brussels. Social partners also had the opportunity to express
their views in the Liaison Forum organised by DG Employment on 7 February 2011.
Specific consultations were also conducted with EU Delegations in third
countries and the MS in the Advisory Committee for Public Contracts.
Specific topics (i.e. Article 58 of the Utilities-Directive and the treatment
of abnormally low tenders) have also been addressed in the consultation on the
Modernisation of Public Procurement Policy. The Commission’s minimum standards
for consultations were fully met.

Summary
of responses and how they have been taken into account

The Commission
initiative was generally welcomed. A large majority of the respondents were in
agreement with the Commission's description of the current level of access to the
EU’s public procurement market for goods, services and companies from outside
the EU and they also supported the identified objectives of the initiative.

As regards the
outlined policy options it is important to note that the views expressed were
divergent: overall, a significant majority of stakeholders appear to support a
legislative initiative (around 65 %), while a sizeable minority of around
35 % prefer the ‘nothing happens’ option. However, views within the
different groups of stakeholders also diverge as to the preferred option. Among
contracting entities and government authorities (including from third
countries), for example, two thirds are in favour of the ‘nothing happens’ or
non-legislative option, while for businesses and other stakeholders some 75 %
are in favour of a legislative initiative. There are also divergent opinions as
to what that legislative option should be. Although almost half of respondents
support legislative option ‘approach A’[5], a significant number of
respondents also favour alternative approaches. It is worth noting that, despite
being the least preferred legislative option, ‘approach B’[6]
also received support from a considerable number of respondents.

The main
reasons put forward by stakeholders in favour of or against one or the other
policy option included the importance of best value for money, the
competitiveness and productivity that could be undermined by some of the policy
options, the risk of retaliation by our trading partners, the administrative
burden that could be attached to such an initiative and the fact that the
initiative would endanger the status of the EU as an advocate of open markets.
Trade unions and non-governmental organisations (NGOs) have been fairly neutral
on the choice of options and have tended to focus their contributions on the
need for third countries to respect ILO Conventions when tendering in the EU or
for the EU to open its borders to maintain fair trade vis-à-vis least-developed
countries.

Collection and use of expertise

The use of external expertise was not
considered necessary in addition to the consultations mentioned above. In the
area of public procurement the Commission traditionally commands significant
expertise.

Impact assessment

Several options have been considered by the
Commission in order to identify the most appropriate one.

The first option is not to take any additional action in this field at all,
and continue with business as usual with the international market access
negotiations (possibly in a reinforced manner) with the European Union’s
trading partners. However, judging from past experience, it is unlikely that
such an option would lead to substantial improvements in entitling EU goods,
services and suppliers to participate in procurement processes in third
countries. The inevitable result would be a continued loss of tendering
opportunities on a significant scale.

A second type of option would consist in
upgrading the implementation of existing tools under Directive 2004/17/EC (Articles
58 and 59), based on better guidance or an extension of the scope of these
tools to cover the entire scope of Directives 2004/17/EC and 2004/18/EC. Based
only on optional use by individual contracting authorities/entities, this
scenario would clearly not improve significantly the leverage of the EU in
international negotiations.

A third option could be to close generally
or by sector the EU public procurement market to goods, services and suppliers
from third countries, subject to the EU’s international obligations in this
field. However, such an option gives rise to serious concerns as to its impact
in terms of retaliation and the costs involved for individual contracting
authorities/entities and the competitiveness of the EU.

Therefore, the Commission favours a fourth
option, namely to create an autonomous instrument that would strike the right
balance between, on the one hand, the need to enhance the Union position in
negotiations on market access, and on the other hand, the preservation of a
competitive procurement regime in the European Union.

To this effect, the proposal establishes a
double mechanism. Individual contracting authorities/entities would be entitled
to exclude tenders of which more than 50% of the value is made up of goods
and/or services not benefiting from international market access commitments,
under supervision by the Commission. In addition the Commission would be
allowed to respond by limiting temporarily market access for those countries
which demonstrably exclude or discriminate against Union suppliers, goods and services
in their national procurement practices, and refuse to grant better market
access in negotiations. Any restrictions on access to the EU public procurement
market which the Commission may one day adopt under this Regulation would be
measured and finely targeted.

This Commission's Impact Assessment Board (IAB) has issued two
opinions on the Impact assessment report. In the light of the first opinion impact
assessment-report has been revised as follows: the problem definition has been
reshuffled in order to focus on the central issue identified across the impact
assessment, the need for further opening of third countries' procurement
markets and the problems of compliance of EU international commitments. The
scale of options to be considered has been broadened. In addition to a more
active negotiating policy the impact assessment takes into account the
extension of the current regime of articles 58 and 59 of directive 2004/17/EC
to all procurements covered by the EU directives and the possibility for selective
acceptance of non-covered procurement. Finally, the analysis of impacts has
been refined to upgrade the measurement of retaliation and the employment
figures. Annex 10 of the Impact assessment report provides a more detailed
review of how the IAB's first opinion has been incorporated in the revised
report, resubmitted on 8 February 2012.

In its opinion
on the resubmitted report, the IAB acknowledges the improvements made to the
report and the incorporation of the recommendations it made in its first opinion,
but stated it could not give a positive opinion. The IAB believes there are
still a number of areas where the assessment could be strengthened and
identifies a number of actions to further improve the report (i.e. refine
presentation of the options, improve the presentation of the model used to
estimate the impacts, better justify the proportionality of the preferred
option, etc). The final impact assessment report has integrated to the extent possible
these recommendations.

3.           LEGAL ELEMENTS OF THE PROPOSAL

Summary of the proposed action

The main objectives of this proposal are to
strengthen the position of the European Union when negotiating the terms of
access of EU goods, services and suppliers to the public procurement markets of
third countries and to clarify the legal situation for foreign bidders, goods
and services participating in the EU public procurement market. Accordingly,
this proposal establishes a comprehensive EU external public procurement policy
that governs the access of foreign goods and services to the EU public
procurement market and includes mechanisms to encourage the EU’s trading
partners to start market access discussions.

In the first place, the proposal reflects
in EU legislation the principle that, on the EU's internal market in
procurement, goods and services benefiting from market access commitments are
treated equally to EU goods and services and it extends this treatment to goods
and services originating in least-developed countries.

As regards the treatment of goods and
services not benefiting from market access commitments, a three-stage approach
is envisaged.

The Commission may approve that Contracting
authorities/entities exclude tenders where the value of non-covered goods and
services exceeds 50% of the total value of goods and services included in the
tender. After informing potential tenderers, in the contract notice, of its
intention to exclude such tenders, a contracting authority/entity has to notify
the Commission when it receives tenders that fall into this category. The
Commission would give its approval to the exclusion if there is a lack of
substantial reciprocity in market opening between the EU and the country from
which the goods and/or services originate. The Commission will approve the
exclusion where the goods and services concerned fall within the scope of a
market reservation by the EU in an international agreement.

In addition, this proposal establishes an
EU mechanism to further increase the leverage of the EU in international
negotiations on market access, based on Commission investigations, consultation
with third countries and, where appropriate, imposition of temporary restrictive
measures by the Commission.

Upon request by interested stakeholders or
on its own initiative, the Commission may conduct investigations to verify the
existence of restrictive procurement practices. Where the existence of such
practices is confirmed, the Commission would invite the country concerned to
enter into consultation in order to address such restrictive practices and
thereby create a better market access situation for EU companies.

If the country concerned is unwilling to engage
into consultations or provide satisfactory solutions to the restrictive
procurement measures, the European Union could take a decision to temporarily restrict
the access of goods and/or services from that country to the EU public
procurement market.

Finally, as a complement to the provisions
on abnormally low tenders in the proposed reform of the public procurement
directives, contracting authorities/entities will be required to inform the
other tenderers when they intend to accept abnormally low tenders where the
value of non-covered goods and services exceeds 50% of the total value of goods
and services included in the tender. As the need for third countries to respect
core ILO labour standards is addressed in the proposed reform of the public
procurement directives, it is not necessary to treat it in the present text.

Designed as a policy tool to stimulate
negotiations, it should be underlined that the thrust of this initiative is not
to close the procurement market in the European Union, but to gain better
access to the public procurement markets of the European Union’s trading
partners. It is imperative to preserve competitive tendering conditions on the internal
market which give tangible benefits to contracting
authorities/entities and society at large.

Legal basis

Articles 207 of the Treaty on the Functioning of the European Union.

Subsidiarity principle

The proposal falls under the exclusive
competence of the European Union. The subsidiarity principle therefore does not
apply.

Proportionality principle

The proposal complies with the
proportionality principle for the following reasons.

This proposal strikes a careful balance
between the interests of all relevant stakeholders and the form and substance
of the EU action does not exceed what is necessary to achieve the objectives of
the Treaty.

First, the contracting authorities/entities
will have the right to exclude tenders consisting, for more than 50 %, of
non-covered goods and services, under the supervision by the Commission. This
ensures that contracting authorities/entities are left the choice to accept goods
and services irrespective of their origin or restrict the access of goods and
services not covered by the EU's international agreements, to the extent such
restrictions are consistent with the EU's common commercial policy, which is
exclusively an area of EU competence. The supervision by the Commission is
carefully designed to ensure uniformity and proportionality. Secondly, the
Commission tool established by this regulation will ensure that the EU has a mechanism
available to investigate restrictive procurement practices and consult with the
third country concerned on these. Only where no other solution can be found
will the Commission adopt temporary restrictive measures.

Administrative costs are kept as low as
possible, but measures have to be taken to preserve the consistency of the
common commercial policy. The setting up of supervision and investigation
mechanisms are to be carried out by Commission services currently working on
the external public procurement policy and on market access monitoring, thus
limiting the impact on human resources within the Commission. The administrative
burden for contracting authorities/entities will be reduced to situations where
restrictive measures are taken by the Commission or when contracting
authorities/entities choose to use the mechanism, and would be based on
standard forms or self-declarations, limiting the investigations that
individual entities would perform to verify the origin of goods or services.

Choice of instruments

The proposed instrument is a regulation.

Other means would not be adequate, since
only a regulation can sufficiently ensure uniform action by the European Union
in the field of common commercial policy. Moreover, this instrument gives
powers to the European Commission, meaning that transposition would not be
useful.

4.           BUDGETARY IMPLICATION

The proposal in itself does not have
budgetary implications. The additional tasks for the Commission can be met with
existing resources.

5.           OPTIONAL ELEMENTS

Review/revision/sunset clause

The proposal includes a review clause.

European Economic Area

The proposed act concerns an EEA matter and
should therefore extend to the European Economic Area.

Detailed explanation of the proposal

Article 1
defines the subject matter and the scope of application of this Regulation,
based on the EU public procurement Directives 2004/17/EC and 2004/18/EC and the
Directive on the award of concessions contracts, as proposed by the Commission[7].

Article 2
contains relevant definitions, most of which are taken over from the EU public
procurement Directives. The text also defines the "covered goods and services"
and non- covered goods and services, which are central to the application of
this Regulation.

Article 3
sets out, for the purpose of this Regulation, the applicable rules of origin,
for goods and services procured by contracting authorities/entities. In
compliance with the EU international commitments, rules of origin for goods are
in line with the non-preferential rules of origin as defined in the EU Customs
Code (Regulation 2913/92). The origin of a service is defined on the basis of
the relevant rules under the Treaty on the Functioning of the European Union on
the right of establishment and on the definitions that the GATS provides
(Article XXVIII).

Article 4 spells
out the rules on access to the EU public procurement market applicable to
foreign goods and services benefiting from the EU market access commitments
(referred to as ‘covered goods and services’) and to goods and services
originating in the least-developed countries. Both categories have to be
treated equally to EU goods and services.

Article 5
outlines the rules of access for goods and services originating in third
countries not benefiting from market access commitments of the EU (referred to
as ‘non- covered goods and services’). The access of these goods and services
may be subject to restrictive measures taken by contracting
authorities/entities or the Commission under the mechanisms established by this
Regulation.

Article 6
sets out the conditions under which the Commission may approve that individual
contracting authorities/entities exclude tenders from tendering procedures,
where the value of non-covered goods and services exceeds 50% of the total
value of goods or services included in the tender for contracts with an
estimated value equal or above EUR 5.000.000.

When a contracting authority/entity has
indicated in the contract notice its intention to exclude non-covered goods and
services and receives tenders that fall into this category, it must notify the
Commission and indicate the characteristics of the tenders concerned. According
to the publication of notices in the Official Journal
(TED, Tenders European Daily) only 7% of all contracts published in the
Official Journal have a value above EUR 5 million. However, those contracts
represent 61% of the whole EU public procurement market. The Commission
estimates that it would receive each year a maximum of 35-45 notices.

For contracts with
an estimated value equal or above EUR 5.000.000 the
Commission should take a decision on the exclusion. The Commission should, for
all contracts, approve the intended exclusion when the goods and services
concerned are subject to a market access reservation under the EU international
agreements on public procurement. Where such an
agreement does not exist, the Commission shall approve the exclusion where the
third country maintains restrictive procurement measures leading to a lack of
substantial reciprocity in market opening between the Union and the third
country concerned. When assessing whether a lack of substantial reciprocity
exists, the Commission shall examine, to what degree public procurement laws of
the country concerned ensure transparency in line with international standards
in the field of public procurement and preclude any discrimination against
Union goods, services and economic operators. Moreover it shall examine to what
degree public authorities and/or individual procuring entities maintain or
adopt discriminatory practices Union goods, services and economic operators.

Article 7 imposes
on contracting authorities/entities the specific obligation to inform the other
tenderers in an award procedure of their decision to accept an abnormally low
tender where the value of non-covered goods and services exceeds 50% of the
total value of goods or services included in the tender.

Article 8 sets
out the conditions under which the Commission, on its own initiative or at the request
of Member States or interested parties, may launch an external procurement investigation
into restrictive procurement measures by third countries, and how to conduct
such an investigation.

Article 9
establishes a mechanism for consultation with third countries in cases where
the Commission concludes, after conducting an external procurement
investigation, that the country concerned has adopted or maintains a restrictive
procurement practice. Under this mechanism, the Commission will invite the
country concerned to enter into discussions with a view to removing the
restrictive procurement practice and ensuring transparency and equal treatment
for EU suppliers, goods and services. The consultation scheme takes into
account the different situations to be considered, such as the existence of a
dispute settlement mechanism for restrictive procurement practices affecting
covered procurement, unilateral remedial measures or the conclusion of an
international agreement providing for equal treatment for EU suppliers, goods
and services previously affected by restrictive procurement practices. The
Commission is empowered to adopt an implementing act prohibiting exclusion of
tenders comprising non-covered goods and services originating in countries with
which substantive market access negotiations take place and there is a
reasonable prospect of removing restrictive procurement practices in the near
future.

Article 10
empowers the Commission to adopt an implementing Act concerning ‘restrictive
measures’, provided that its investigation has confirmed the existence of
restrictive procurement measures in a third country, and that the Commission
has attempted to conduct discussions on market access under the consultation
mechanism. Such measures may in principle consist of (i) the disqualification
of certain tenders made up for more than 50% of goods or services originating
in the country concerned; and/or (ii) a mandatory price penalty on those goods
or services tendered which originate in the country concerned.

Article 11 provides
rules for withdrawal or suspension of restrictive measures adopted, as well as
a Commission decision to prohibit the use of Article 6 by contracting authorities/entities.

Article 12 sets
the rules for the provision of information of tenderers on the application of
restrictive measures adopted by the Commission in the context of individual
public procurement procedures.

Article 13 sets out the circumstances when contracting authorities/entities are
authorised to set aside measures adopted pursuant to this Regulation. The
objective of this provision is to give contracting authorities/entities a
requisite degree of flexibility to satisfy their purchasing needs and, at the
same time, to ensure proper monitoring by the Commission by means of the
notification obligation.

Article 14 and 15 sets out the delegation of powers conferred on the Commission to adopt delegated acts in accordance with Article 14 concerning amendments
to the Annex to reflect the conclusion of new international agreements by the
Union in the field of public procurement.

Article 16 provides
legal remedies in case of violation of the provisions of this Regulation.

Article 17 designates
the relevant committee procedure for the adoption of implementing acts. Moreover,
it empowers the Commission to adopt implementing measures for the adoption of
standard forms.

Article 18 requires
the Commission to report on implementation of this Regulation at least every
three years after its entry into force.

Article 18 contains
rules on confidentiality of information received pursuant to this Regulation.

Article 20 provides
for the repeal of Articles 58 and 59 of Directive 2004/17/EC.

Article 21 determines
the entry into force of this Regulation.

2012/0060 (COD)

Proposal for a

REGULATION OF THE EUROPEAN PARLIAMENT
AND OF THE COUNCIL

on the access of third-country goods and
services to the Union’s internal market in public procurement and procedures
supporting negotiations on access of Union goods and services to the public
procurement markets of third countries

(Text with EEA relevance)

THE EUROPEAN PARLIAMENT AND THE
COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the
Functioning of the European Union, and in particular Article 207 thereof,

Having regard to the proposal from the
European Commission,

After transmission of the draft legislative
act to the national Parliaments,

Having regard to the opinion of the
European Economic and Social Committee[8],

Having regard to the opinion of the
Committee of the Regions[9],

Acting in accordance with the ordinary
legislative procedure,

Whereas:

(1)       Article 21 of the Treaty
on European Union provides that the Union is to define and pursue common
policies and actions, and work for a high degree of cooperation in all fields
in international relations in order, inter alia, to encourage the integration
of all countries into the world economy, including through the progressive
abolition of restrictions on international trade.

(2)       Pursuant to Article 206 of
the Treaty on the Functioning of the European Union (TFEU) the Union, by
establishing a customs union, is to contribute, in the common interest, to the
harmonious development of world trade, the progressive abolition of restrictions
on international trade and on foreign direct investment, and the lowering of
customs and other barriers.

(3)       In accordance with Article
26 of the TFEU the Union is to adopt measures with the aim of establishing or
ensuring the functioning of the internal market, comprising an area without
internal frontiers in which the free movement of goods, persons, services and
capital is ensured in accordance with the provisions of the Treaties.

(4)       Article III:8 of the
General Agreement on Tariffs and Trade 1994 and Article XIII of the General
Agreement on Trade in Services exclude government procurement from the main multilateral
WTO disciplines.

(5)       Within the context of the
World Trade Organisation and through its bilateral relations the Union advocates
an ambitious opening of international public procurement markets of the Union
and its trading partners, in a spirit of reciprocity and mutual benefit.

(6)       Many third countries are
reluctant to open their public procurement markets to international competition,
or to open those markets further than what they have already done. As a result,
Union economic operators face restrictive procurement practices in many of the
trading partner of the Union. Those restrictive procurement practices result in
the loss of substantial trading opportunities.

(7)       Directives 2004/17/EC of
the European Parliament and of the Council of 31 March 2004 coordinating the
procurement procedures of entities operating in the water, energy, transport
and postal services sectors[10] and 2004/18/EC of the
European Parliament and of the Council of 31 March 2004 on the coordination of
procedures for the award of public works contracts, public supply contracts and
public service contracts[11] contain only a few provisions
concerning the external dimension of the public procurement policy of the Union,
in particular Articles 58 and 59 of Directive 2004/17/EC. These provisions
however only have a limited scope and due to a lack of guidance they are not much
applied by contracting entities.

(8)       In accordance with Article
207 TFEU the common commercial policy in the field of public procurement is to be
based on uniform principles.

(9)       In the interest of legal certainty
for Union and third-country economic operators and contracting
authorities/entities, the international market access commitments undertaken by
the Union vis-à-vis third countries in the field of public procurement should
be reflected in the legal order of the EU, thereby ensuring effective
application thereof. The Commission should issue guidance on the application of
the existing international market access commitments of the European Union.
This guidance should be updated on a regular basis and provide easy to use
information.

(10)     The objectives of improving
the access of EU economic operators to the public procurement markets of
certain third countries protected by restrictive procurement measures and preserving
equal conditions of competition within the European Single Market require that
the treatment of third-country goods and services not covered by the
international commitments of the Union be harmonised throughout the European
Union.

(11)     For this purpose rules of
origin should be established so that contracting authorities/entities know
whether goods and services are covered by the international commitments of the
European Union. The origin of a good should be determined in accordance with
Article 22 to 26 of Regulation (EC) No 2913/1992 of the European Parliament and
of the Council of 12 October 1992 establishing the Community Customs Code[12].
According to this Regulation goods should be considered
to be Union goods when they are wholly obtained or
produced in the Union. Goods whose production involved one or more third
countries should be deemed to originate in the country where they underwent
their last, substantial, economically justified processing or working in an
undertaking equipped for that purpose and resulting in the manufacture of a new
product or representing an important stage of manufacture. The origin of a service should be determined on the basis of the
origin of the natural or legal person providing it. The guidance referred to in
recital 9 should cover the application in practice of the rules of origin.

(12)     The Commission should
assess whether to approve that contracting authorities/entities within the
meaning of Directives [2004/17/EC, 2004/18/EC and Directive [....] of the
European Parliament and the Council of [....]....on the award of concession
contracts[13]] exclude, for contracts
with an estimated value equal or above EUR 5.000.000 from procedures for the
award of contracts goods and services not covered by the international
commitments undertaken by the European Union.

(13)     For the sake of
transparency, contracting authorities/entities intending to make use of their
power in accordance with this Regulation to exclude tenders comprising goods
and/or services originating outside the European Union, in which the value of
the non-covered goods or services exceeds 50 % of the total value of these
goods or services from procedures for the award of contracts should inform
economic operators thereof in the contract notice published in the Official
Journal of the European Union.

(14)     In order to enable the
Commission to decide on any exclusion of third-country goods and services not
covered by the international commitments of the Union, contracting
authorities/entities should notify the Commission of their intention to exclude
such goods and services, using a standard form that contains sufficient
information to enable the Commission to decide.

(15)     For contracts with an estimated
value equal or above EUR 5.000.000 the Commission should approve the intended
exclusion if the international agreement concerning market access in the field
of public procurement between the Union and the country where the goods and/or
services originate contains, for the goods and/or services for which the
exclusion is proposed, explicit market access reservations taken by the Union.
Where such an agreement does not exist, the Commission should approve the exclusion
where the third country maintains restrictive procurement measures leading to a
lack of substantial reciprocity in market opening between the Union and the
third country concerned. A lack of substantial reciprocity should be presumed
where restrictive procurement measures result in serious and recurring
discriminations of EU economic operators, goods and services.

(16)     When assessing whether a
lack of substantial reciprocity exists, the Commission should examine to what
degree public procurement laws of the country concerned ensure transparency in
line with international standards in the field of public procurement and
preclude any discrimination against Union goods, services and economic
operators. In addition, it should examine to what degree public authorities
and/or individual procuring entities maintain or adopt discriminatory practices
against Union goods, services and economic operators.

(17)     The Commission should be
able to prevent the possible negative impact of an intended exclusion on on-going
trade negotiations with the country concerned. Therefore, the Commission may, where
a country is engaging in substantive negotiations with the Union concerning
market access in the field of public procurement and the Commission considers
that there is a reasonable prospect of removing the restrictive procurement
practices in the near future, it should be able to adopt a implementing act providing
that goods and services from that country should not be excluded from
procedures for the award of contracts for a period of one year.

(18)     In view of the fact that
the access of third country goods and services to the public procurement market
of the Union falls within the scope of the common commercial policy, Member
States or their contracting authorities/entities should not be able to restrict
the access of third country goods or services to their tendering procedures by any
other measure than the ones provided for in this Regulation.

(19)     In view of the greater
difficulty for contracting authorities/entities to assess, in the context of
tenders comprising goods and/or services originating outside the European
Union, in which the value of the non-covered goods or services exceeds 50 %
of the total value of these goods or services, the explanations of tenderers it
is appropriate to provide for an increased transparency in the treatment of
abnormally low tenders. In addition to the rules provided by Article 69 of the
Directive on public procurement and Article 79 of the Directive on procurement
by entities operating in the water, energy, transport and postal services
sectors the contracting authority/entity that intends to accept such an abnormally
low tender, should inform the other tenderers of this in writing including the
reasons for the abnormally low character of the price or costs charged. This
allows these tenderers to contribute to a more accurate assessment as to
whether the successful tenderer will be able to fully perform the contract
under the conditions spelled out in the tender documentation. Therefore, this
additional information would achieve a more level playing field on the EU
public procurement market.

(20)     The Commission should be
able, on its own initiative or at the application of interested parties or a
Member State, to initiate at any time an external procurement investigation
into restrictive procurement practices allegedly maintained by a third country.
In particular it shall take into account the fact that the Commission has
approved a number of intended exclusions concerning a third country pursuant to
Article 6(2) of this Regulation. Such investigative procedures should be without
prejudice to Council Regulation (EC) No 3286/94 of 22 December 1994 laying down
Community procedures in the field of the common commercial policy in order to ensure
the exercise of the Community’s rights under international trade rules, in
particular those established under the auspices of the World Trade Organization[14].

(21)     Where the Commission has,
on the basis of information available to it, reason to believe that a third
country has adopted or maintains a restrictive procurement practice, it should
be able to start an investigation. If the existence of a restrictive
procurement practice in a third country is confirmed the Commission should invite
the country concerned to enter into consultations with a view to improving the
tendering opportunities for economic operators, goods and services in public
procurement in that country.

(22)     If the consultations with
the country concerned do not lead to sufficient improvement in the tendering
opportunities for EU economic operators, goods and services, the Commission should
take appropriate restrictive measures.

(23)     Such measures may entail
the mandatory exclusion of certain third-country goods and services from public
procurement procedures in the European Union, or may subject tenders made up of
goods or services originating in that country to a mandatory price penalty. To
avoid circumvention of these measures, it may also be necessary to exclude
certain foreign-controlled or owned juridical persons established in the
European Union, that are not engaged in substantive business operations such
that it has a direct and effective link with the economy of a Member State
concerned. Appropriate measures should not be disproportionate to the
restrictive procurement practices to which they respond.

(24)     It is imperative that
contracting authorities/entities have access to a range of high-quality
products meeting their purchasing requirements at a competitive price.
Therefore contracting authorities/entities should be able to set aside measures
limiting access of non-covered goods and services in case there are no Union
and/or covered goods or services available which meet the requirements of the
contracting authority/entity to safeguard essential public needs for example
health and public safety, or application of the measure would lead to a
disproportionate increase in the price or costs of the contract.

(25)     In case of misapplication
by contracting authorities/entities of exceptions to measures limiting access
of non-covered goods and services, the Commission should be able to apply the
corrective mechanism of Article 3 of Council Directive 89/665/EEC on the coordination of the laws, regulations and administrative
provisions relating to the application of review procedures to the award of
public supply and public works contracts[15] or Article 8 of Council Directive 92/13/EEC coordinating
the laws, regulations and administrative provisions relating to the application
of Community rules on the procurement procedures of entities operating in the
water, energy, transport and telecommunications sectors[16]. For the same purpose, contracts concluded with an economic
operator in violation of Commission’s decisions on intended exclusions notified
by contracting authorities/entities or in violation of measures limiting access
of non-covered goods and services should be declared ineffective within the
meaning of Directive 2007/66/EC of the European Parliament and Council[17].

(26)     In the light of the overall
policy of the Union with regard to least-developed countries as provided for,
inter alia, in Council Regulation (EC) No 732/2008 of 22
July 2008 applying a scheme of generalised tariff preferences from 1 January
2009, it is appropriate to assimilate goods and
services from these countries to Union goods and services.

(27)     In order to reflect in the
legal order of the European Union the international market access commitments
undertaken in the field of public procurement after the adoption of this
Regulation, the Commission should be empowered to adopt acts in accordance with
Article 290 of the Treaty on the Functioning of the European Union amendments
to the list of international agreements annexed to this Regulation. It is of
particular importance that the Commission should carry out appropriate
consultations during its preparatory work, including at expert level. The
Commission, when preparing and drawing up delegated acts, should ensure
simultaneous, timely and appropriate transmission of relevant documents to the
European Parliament and the Council.

(28)     In order to ensure uniform
conditions for implementation of this Regulation, implementing powers should be
conferred on the Commission. Those powers should be exercised in accordance
with Regulation (EU) No 182/2011 of the European Parliament and of the Council
of 16 February 2011 laying down the rules and general principles concerning
mechanisms for the control by the Member States of the Commission’s exercise of
implementing powers.

(29)     The advisory procedure
should be used for the adoption of implementing acts for the drawing up of the
standard forms for the publication of notices, the submission of notifications
to the Commission and the origin of goods or services. These
decisions do not have any impact either from the financial point of views or on
the nature and scope of obligations stemming from this Regulation. On the
contrary, these acts are characterised by a mere administrative purpose and
serve to facilitate the application of the rules set by this Regulation.

(30)     The Commission should report
at least every three years on the application of this Regulation.

(31)     In accordance with the principle of
proportionality, it is necessary and appropriate for achievement of the basic
objective of establishing a common external policy in the field of public
procurement to lay down rules on the treatment of goods and services not
covered by the international commitments of the European Union. This Regulation
on the access of third-country economic operators, goods and services does not
go beyond what is necessary in order to achieve the objectives pursued, in
accordance with the third paragraph of Article 5 of the Treaty on European
Union,

HAVE ADOPTED THIS REGULATION:

Chapter I
General provisions
Article 1
Subject matter and scope
of application

1.           This Regulation lays down
rules on the access of third-country goods and services to the award of
contracts for the execution of works or a work, the supply of goods and the
provision of services by Union contracting authorities/entities, and
establishes procedures supporting negotiations on access of Union goods and
services to the public procurement markets of third countries.

2.           This Regulation shall apply
to contracts covered by the following acts:

(a)
Directive [2004/17/EC];

(b)
Directive [2004/18/EC];

(c)
Directive [201./... (on the award of concession
contracts].

This Regulation shall apply to the award of
contracts where the goods or services are procured for governmental purposes
and not with a view to commercial resale or with a view to use in the
production of goods or in the provision of services for commercial sale.

Article 2
Definitions

1.           For the purposes of this
Regulation, the following definitions shall apply.

(a)
‘supplier’ means any natural or legal person
which offers on the market goods;

(b)
‘service provider’ means any natural or legal
person which offers on the market the execution of works or a work, or services;

(c)
‘contracting authority/entity’ means
‘contracting authority’ as defined in [Article 1 (9) of Directive 2004/18/EC,
and ‘contracting entity’ as defined in Article 2 of Directive 2004/17/EC and
Articles 3 and 4 of Directive 20.. on the award of concession contracts];

(d)
‘covered goods or services’ means a good or
service originating in a country with which the Union has concluded an
international agreement in the field of public procurement including market
access commitments and in respect of which the relevant agreement applies.
Annex I to this Regulation contains a list of relevant agreements;

(e)
‘non-covered goods or services’ means a good or
service originating in a country with which the Union has not concluded an
international agreement in the field of public procurement including market
access commitments or a goods or service originating in a country with which
the Union has concluded such an agreement, but in respect of which the relevant
agreement does not apply;

(f)
‘measure’ means any law, regulation, or
practice, or combination thereof;

(g)
"interested parties" means a company
or firm formed in accordance with the law of a Member State and having its
registered office, central administration or principal place of business within
the Union, directly concerned by the production of goods or the provision of
services which are the subject of restrictive procurement measures of third
countries.

2.           For the purposes of this
Regulation

(a)
the term "country" may refer to any
State or separate customs territory, without such nomenclature having
implications for sovereignty;

(b)
the term ‘economic operator’ shall cover equally
the concepts of supplier and service provider;

(c)
an economic operator who has submitted a tender
shall be designated a ‘tenderer’;

(d)
the execution of works and/or a work within the
meaning of Directives [2004/17/EC, 2004/18/EC and Directive 201./.. on the
award of concession contracts] shall for the purposes of this Regulation be
considered as the provision of a service;

(e)
a ‘mandatory price penalty’ shall refer to an
obligation for contracting entities to increase, subject to certain exceptions,
the price of services and/or goods originating in certain third countries that
have been offered in contract award procedures.

Article 3
Rules of origin

1.           The origin of a good shall
be determined in accordance with Article 22 to 26 of Regulation (EC) No 2913/1992
of the European Parliament and of the Council of 12 October 1992 establishing
the Community Customs Code[18].

2.           The origin of a service
shall be determined on the basis of the origin of the natural or legal person
providing it. The origin of the service provider shall be deemed to be:

(a)
in the case of a natural person, the country of
which the person is a national or where he has a right of permanent residence;

(b)
in the case of a legal person any of the
following:

(1)
if the service is provided other than through a
commercial presence within the Union, the country where the juridical person is
constituted or otherwise organised under the laws of that country and in the
territory of which the legal person is engaged in substantive business
operations;

(2)
if the service is provided through a commercial
presence within the Union, the Member State where the legal person is
established and in which territory it is engaged in substantive business
operations such that it has a direct and effective link with the economy of a
Member State concerned.

For the purposes of point (2) if the legal
person is not engaged in substantive business operations such that it has a
direct and effective link with the economy of a Member State concerned, the
origin of the natural or legal persons which own, or control the juridical
person providing the service.

The legal person providing the service shall be
considered to be:

"owned" by persons of a given country
if more than 50 % of the equity interest in it is beneficially owned by
persons of that country and "controlled" by persons of a given
country if such persons have the power to name a majority of its directors or
otherwise to legally direct its actions.

3.           For the purpose of this
Regulation, goods or services originating in the countries of the European
Economic Area other than the Member States shall be treated like those
originating in the Member States.

Chapter II
Treatment of covered and non-covered
goods and services, Abnormally low tenders
Article 4
Treatment of covered goods
and services

When awarding contracts for the execution
of works and/or a work, the supply of goods or the provision of services,
contracting authorities/entities shall treat covered goods and services equally
to goods and services originating in the European Union.

Goods or services originating in least-developed
countries listed in Annex I to Regulation (EC) No 732/2008 shall be treated as covered
goods and services.

Article 5
Rules of access for
non-covered goods and services

Non-covered goods
and services may be subject to restrictive measures taken by the Commission:

(a)          upon request of individual
contracting entities according to the rules set out in Article 6;

(b)          according to the rules set
out in Articles 10 and 11.

Article 6
Empowerment of contracting
authorities/entities to exclude tenders comprising non-covered goods and
services

1.           Upon request of contracting
authorities/entities the Commission shall assess whether to approve, for
contracts with an estimated value equal or above EUR 5.000.000 exclusive of value-added tax (VAT) the
exclusion from procedures for the award of contracts tenders comprising goods
or services originating outside the Union, if the value of the non-covered
goods or services exceeds 50 % of the total value of the goods or services
constituting the tender, under the following conditions.

2.           Where contracting
authorities/entities intend to request the exclusion from procedures for the
award of contracts on the basis of paragraph 1 they shall indicate this in the
contract notice they publish pursuant to Article 35 of Directive 2004/18/EC or
pursuant to Article 42 of Directive 2004/17/EC or Article 26 of the Directive on the award of concession contracts.

Contracting authorities/entities shall require
tenderers to provide information on the origin of the goods and/or services
contained in the tender, and their value. They shall accept self-declarations
as preliminary evidence that tenders cannot be excluded pursuant to paragraph
1. A contracting authority may ask a tenderer at any moment during the
procedure to submit all or parts of the required documentation where this
appears necessary to ensure the proper conduct of the procedure. The Commission
may adopt implementing acts establishing standard forms for declarations concerning
the origin of goods and services. Those implementing acts shall be adopted in
accordance with the advisory procedure referred to in Article 17 (3).

Where contracting authorities/entities receive
tenders that meet the conditions of paragraph 1 for which they intend to request
the exclusion for that reason, they shall notify the Commission. During the
notification procedure the contracting authority/entity may continue its
analysis of the tenders.

The notification shall be sent by electronic
means using a standard form. The Commission shall adopt implementing acts
establishing the standard forms. Those implementing acts shall be adopted in
accordance with the advisory procedure referred to in Article 17 (3). That
standard form shall contain the following information:

(a)
the name and contact details of the contracting
authority/entity;

(b)
a description of the object of the contract;

(c)
the name and contact details of the economic
operator whose tender would be excluded;

(d)
information on the origin of the economic operator,
the goods and/or services and their value.

The Commission may ask the contracting
authority/entity for additional information.

That information shall be provided within eight
working days, commencing on the first working day following the date on which
it receives the request for additional information. If the Commission receives
no information within this period the period established in paragraph 3 shall be
suspended, until the Commission receives the requested information.

3.           For contracts referred to in
paragraph 1, the Commission shall adopt an implementing act concerning the
approval of the intended exclusion within a period of two months commencing on
the first working day following the date on which it receives the notification.
Those implementing acts shall be adopted in accordance with the examination procedure
referred to in Article 17 (2). This period may be extended once by a maximum of
two months in duly justified cases, in particular if the information contained
in the notification or in the documents annexed thereto is incomplete or
inexact or if the facts as reported undergo any substantive changes. If, at the
end of this two-month period, or the extended period the Commission has not
adopted a decision approving or disapproving the exclusion, the exclusion shall
be deemed to have been disapproved by the Commission.

4.           When adopting implementing
acts pursuant to paragraph 3, the Commission shall approve the intended
exclusion in the following cases:

(a)
if the international agreement concerning market
access in the field of public procurement between the Union and the country
where the goods and/or services originate contains, for the goods and/or
services for which the exclusion is proposed, explicit market access
reservations taken by the Union;

(b)
where an agreement referred to in point (a) does
not exist and the third country maintains restrictive procurement measures
leading to a lack of substantial reciprocity in market opening between the
Union and the third country concerned.

For the purposes of point (b), a lack of
substantial reciprocity is presumed where restrictive procurement measures
result in serious and recurring discriminations of Union economic operators,
goods and services.

When adopting implementing acts pursuant to
paragraph 3, the Commission shall not approve an intended exclusion where it
would violate market access commitments entered into by the Union in its
international agreements.

5.           When assessing whether a
lack of substantial reciprocity exists, the Commission shall examine the
following:

(a)
to what degree public procurement laws of the
country concerned ensure transparency in line with international standards in
the field of public procurement and preclude any discrimination against Union
goods, services and economic operators;

(b)
to what degree public authorities and/or
individual procuring entities maintain or adopt discriminatory practices against
Union goods, services and economic operators.

6.           Before the Commission
takes a decision pursuant to paragraph 3 it shall hear the tenderer or
tenderers concerned.

7.           Contracting authorities/entities
which have excluded tenders pursuant to paragraph 1 shall indicate this in the
contract award notice they publish pursuant to Article 35 of Directive
2004/18/EC, Article 42 of Directive 2004/17/EC, or Article 27 of the Directive on the award of concession contracts. The Commission shall adopt implementing acts establishing the
standard forms for contract award notices. Those implementing acts shall be
adopted in accordance with the advisory procedure referred to in Article 17 (3).

8.           Paragraph 1 shall not
apply where the Commission has adopted the implementing act on temporary access
of the goods and services from a country engaged in substantive negotiations
with the Union as set out in Article 9(4).

Chapter III
Rules on abnormally low tenders
Article 7
Abnormally low tenders

Where the contracting authority/entity
intends, under Article 69 of the Directive on public procurement or under
Article 79 of the Directive on procurement by entities operating in the water,
energy, transport and postal services sectors, after verifying
the explanations of the tenderer, to accept an abnormally low tender comprising
goods and/or services originating outside the Union, in which the value of the
non-covered goods or services exceeds 50 % of the total value of the goods
or services constituting the tender, it shall inform the other tenderers of
this in writing, including the reasons for the abnormally low character of the
price or costs charged.

A contracting authority/entity may withhold
any information release of it would impede law enforcement, would otherwise be
contrary to the public interest, would prejudice the legitimate commercial
interests of economic operators, whether public or private, or might prejudice
fair competition between them.

Chapter IV
Commission investigation, consultation
and measures temporarily limiting access of non-covered goods and services to
the EU Public procurement market
Article 8
Investigation relating to
the access of EU economic operators, goods and services to the public
procurement markets of third countries

1.           Where the Commission considers
it to be in the interest of the Union, it may at any time, on its own
initiative or upon application of interested parties or a Member State, may initiate
an external procurement investigation into alleged restrictive procurement
measures.

In particular, the Commission shall take into
account whether a number of intended exclusions have been approved pursuant to
Article 6(3) of this Regulation.

Should an investigation be initiated, the
Commission shall publish a notice in the Official Journal of the Union,
inviting interested parties and Member States to provide all relevant
information to the Commission within a specified period of time.

2.           The investigation referred
to in paragraph 1 is conducted on the basis of the criteria laid down in
Article 6.

3.           The assessment by the
Commission of whether restrictive procurement measures are maintained by the
third country concerned shall be made on the basis of the information supplied
by interested parties and Member States and/or facts collected by the
Commission during its investigation, and shall be concluded within a period of
nine months after the initiation of the investigation. In duly justified cases
this period may be extended by three months.

4.           When the Commission
concludes as a result of the external procurement investigation that the
alleged restrictive procurement measures are not maintained by the third
country concerned, the Commission shall adopt a decision terminating the
investigation. Those implementing acts shall be adopted in accordance with the
examination procedure referred to in Article 17 (2).

Article 9
Consultation of a third
country

1.           When it is found as a
result of an investigation that restrictive procurement measures are maintained
by a third country and the Commission considers it to be justified by the EU
interest, the Commission shall invite it to enter into consultations with a
view to ensuring that Union economic operators, goods and services can
participate in tendering procedures for the award of public procurement
contracts in that country on the conditions no less favourable than those
accorded to national economic operators, goods and services of that country and
also with a view also to ensuring the application of the principles of
transparency and equal treatment.

In the event that the country concerned
declines the invitation to enter into consultation, the Commission shall, when
adopting implementing acts under Article 10 to limit the access of goods and
services originating in that third country, decide on the basis of the facts
available.

2.           If the country concerned
is a Party to the WTO Agreement on Government Procurement or has concluded a
trade agreement with the EU that includes provisions on public procurement, the
Commission shall follow the consultation mechanisms and/or dispute settlement
procedures set out in that agreement when the restrictive practices relate to
procurement covered by market access commitments undertaken by the country
concerned towards the Union.

3.           When, after the initiation
of a consultation, the country concerned takes satisfactory remedial/corrective
measures, but without undertaking new market access commitments, the Commission
may suspend or terminate the consultation:

The Commission shall monitor the application of
those remedial/corrective measures, where appropriate on the basis of
information supplied at intervals, which it may request from the third country
concerned.

Where the remedial/corrective measures taken by
the third country concerned are rescinded, suspended or improperly implemented,
the Commission may:

(i) resume or restart the consultation with the
third country concerned, and/or

(ii) act under Article 10 to adopt implementing
acts to limit the access of goods and services originating in a third country

The implementing acts referred to in this
paragraph shall be adopted in accordance with the examination procedure
referred to in Article 17(2).

4.           Where, after the
initiation of a consultation, it appears that the most appropriate means to end
a restrictive procurement practice is the conclusion of an international
agreement, negotiations shall be carried out in accordance with the provisions
of Articles 207 and 218 of the Treaty on the Functioning of the European Union.
If a country has engaged in substantive negotiations with the European Union
concerning market access in the field of public procurement, the Commission may
adopt an implementing act providing that goods and services from that country
cannot be excluded from procedures for the award of contracts pursuant to
Article 6.

5.           The Commission may
terminate the consultation if the country concerned undertakes international
commitments agreed with the Union in any of the following frameworks:

(a)
Accession to the WTO Agreement on Government
Procurement,

(b)
Conclusion of a bilateral agreement with the Union
which includes market access commitments in the field of public procurement, or

(c)
Expansion of its market access commitments
undertaken under the WTO Agreement on Government or under a bilateral agreement
concluded with the Union in that framework,

The consultation may also be terminated in cases
where the restrictive procurement measures are still in place at the time these
commitments are undertaken, as long as they include detailed provisions
relating to the phasing-out of those practices.

6.           In the event that a consultation
with a third country does not lead to satisfactory results within 15 months from
the day the consultation with the third country started, the Commission shall
terminate the consultation and consider acting under Article 10 to adopt
implementing acts to limit the access of goods and services originating in a
third country .

Article 10
Adoption of measures limiting
access of non-covered goods and services to the EU public procurement market

1.           Where it is found in an
investigation pursuant to Article 8, and after following the procedure foreseen
in Article 9, that restrictive procurement measures adopted or maintained by
that third country leads to an lack of substantial reciprocity in market
opening between the Union and the third country as referred to in Article 6, the
Commission may adopt implementing acts to temporarily limit the access of
non-covered goods and services originating in a third country. Those
implementing acts shall be adopted in accordance with the examination procedure
referred to in Article 17(2).

2.           The measures adopted
pursuant to paragraph 1 may take any of the following forms:

(a)
the exclusion of tenders of which more than 50 %
of the total value is made up of non-covered goods or services originating in
the country adopting or maintaining a restrictive procurement practice; and/or

(b)
a mandatory price penalty on that part of the
tender consisting of non-covered goods or services which originate in the
country adopting or maintaining a restrictive procurement practice.

3.           Measures adopted pursuant
to paragraph 1 may in particular be limited to:

(a)
public procurement by certain defined categories
of contracting authorities/entities;

(b)
public procurement of certain defined categories
of goods or services;

(c)
public procurement above or within certain
defined thresholds.

Article 11
Withdrawal or suspension
of measures

1.           Where
the Commission considers that the reasons justifying the measures adopted
pursuant to Articles 9 (4) and 10 no longer apply, the Commission may adopt an
implementing act to:

(a)
repeal the measures; or

(b)
suspend the application of the measures for a
period of up to one year.

For the purposes of point (b), the application
of the measures may, at any moment in time, be reinstated by the Commission by
means of an implementing act.

2.           The
implementing acts referred to in this Article shall be adopted in accordance
with the examination procedure referred to in Article 17(2).

Article 12
Information to tenderers

1.           When contracting
authorities/entities conduct a procurement procedure subject to restrictive
measures, adopted pursuant to Article 10 or reinstated pursuant to Article 11,
they shall indicate this in the contract notice they publish pursuant to
Article 35 of Directive 2004/18/EC or Article 42 of Directive 2004/17/EC. The
Commission shall adopt implementing acts establishing the standard forms in
accordance with the advisory procedure referred to in Article 17 (3).2          Where
the exclusion of a tender is based on the application of measures adopted
pursuant 10 or reinstated pursuant to Article 11, contracting
authorities/entities shall inform unsuccessful tenderers.

Article 13
Exceptions

1.           Contracting authorities/entities
may decide not to apply the measures pursuant to Article 10 with respect to a procurement
procedure if:

(a)
there are no Union and/or covered goods or
services available which meet the requirements of the contracting entity; or

(b)
application of the measure would lead to a disproportionate
increase in the price or costs of the contract.

2.           Where a contracting
authority/entity intends not to apply measures adopted pursuant to Article 10
of this Regulation, or reinstated pursuant to Article 11, it shall indicate its
intention in the contract notice that it shall publish pursuant to Article 35
of Directive 2004/18/EC or Article 42 of Directive 2004/17/EC. It shall notify
the Commission no later than ten calendar days after the publication of the
contract notice.

This notification shall be sent by electronic using
a standard form. The Commission shall adopt implementing acts establishing the
standard forms for contract notices and notification in accordance with the
advisory procedure referred to in Article 17 (3).

The notification shall contain the following
information:

(a)
the name and contact details of the contracting
authority/entity;

(b)
a description of the object of the contract;

(c)
information on the origin of the economic
operators, the goods and/or services to be admitted;

(d)
the ground on which the decision not to apply
the restrictive measures is based, and a detailed justification for the use of
the exception;

(e)
where appropriate, any other information deemed
useful by the contracting authority/entity.

The Commission may ask the contracting authority/entity
concerned for additional information.

3.           In the event that a contracting
authority/entity conducts, under Article 31 of Directive 2004/18/EC or under Article
40 (3) 2 of Directive 2004/17/EC and decides not to apply a measure adopted
pursuant to Article 10 of this Regulation, or reinstated pursuant to Article 11,
it shall indicate this use in the contract award notice it publishes pursuant
to Article 35 of Directive 2044/18/EC or Article 43 of Directive 2004/17/EC and
notify the Commission no later than ten calendar days after the publication of
the contract award notice.

This notification shall be sent by electronic
means using a standard form. The Commission shall adopt implementing acts
establishing the standard forms for contract notices and notifications in
accordance with the advisory procedure referred to in Article 17 (2). The
notification shall contain the following information:

(a)
the name and contact details of the contracting
authority/entity;

(b)
a description of the object of the contract;

(c)
information on the origin of the economic
operators, the goods and/or services admitted;

(d)
the ground on which the decision not to apply
the restrictive measures is based, and a detailed justification for the use of
the exception;

(e)
where appropriate, any other information deemed
useful by the contracting entity.

Chapter V
Delegated and implementing powers,
reporting and final provisions
Article 14

Amendments
to the Annex

The Commission shall be empowered to adopt
delegated acts in accordance with Article 14 concerning amendments to the Annex
to reflect the conclusion of new international agreements by the Union in the
field of public procurement.

Article 15
Exercise of the delegation of powers

1.           The power to adopt
delegated acts is conferred on the Commission subject to the conditions laid
down in this Article.

2.           The delegation of power
referred to in Article 14 shall be conferred on the Commission for an indeterminate
period of time from the [date of entry into force of this Regulation].

3.           The delegation of power
referred to in Article 14may be revoked at any time by the European Parliament
or by the Council. A revocation decision shall put an end to the delegation of
the power specified in that decision. It shall take effect on the day following
the publication of the decision in the Official Journal of the European
Union or at a later date specified therein. It shall not affect the
validity of any delegated acts already in force.

4.           As soon as it adopts a
delegated act, the Commission shall notify it simultaneously to the European
Parliament and to the Council.

5.           A delegated act adopted
pursuant to this Article shall enter into force only where no objection has been
expressed either by the European Parliament or by the Council within a period
of two months of notification of the act to the European Parliament and the
Council or if, before the expiry of that period, the European Parliament and
the Council have both informed the Commission that they will not object. That
period shall be extended by two months at the initiative of the European
Parliament or the Council.

Article 16
Implementation

1.           In case of misapplication
by contracting authorities/entities of exceptions laid down in Article 13, the
Commission may apply the corrective mechanism of Article 3 of Directive
89/665/EEC or Article 8 of
Directive 92/13/EEC.

2.           Contracts concluded with
an economic operator in violation of Commission implementing acts adopted
pursuant to Article 6 upon intended exclusion notified by contracting
authorities/ entities or measures adopted pursuant to Article 10 or reinstated
pursuant to Article 11 shall be declared ineffective within the meaning of
Directive 2007/66/EC.

Article 17
Committee procedure

1.           The Commission shall be
assisted by the Advisory Committee for Public .Contracts established by Council
Decision 71/306/EEC[19] and by the Committee set
up by Article 7 of the Trade Barriers Regulation[20].
These committees shall be committees within the meaning of Article 3 of Regulation
(EU) No 182/2011.

2.           Where reference is made to
this paragraph, Article 5 of Regulation (EU) No 182/2011 shall apply and the
competent committee shall be the Committee set up by the Trade Barriers regulation.

3.           Where reference is made to
this paragraph, Article 4 of Regulation (EU) No 182/2011 shall apply and the
competent committee shall be the Committee established by Council Decision
71/306/EEC.

Article 18
Confidentiality

1.           Information received
pursuant to this Regulation shall be used only for the purpose for which it was
requested.

2.           Neither the Commission nor
the Council, nor the European Parliament nor Member States, nor their officials
shall reveal any information of a confidential nature received pursuant to this
Regulation, without specific permission from the supplier of such information.

3.           The supplier of
information may request to treat information submitted as confidential and
shall be accompanied by a non-confidential summary of the information or a
statement of the reasons why the information cannot be summarised.

4.           If it appears that a
request for confidentiality is not justified and if the supplier is unwilling
either to make the information public or to authorise its disclosure in
generalised or summary form, the information in question may be disregarded.

5.           Paragraphs 1 to 5 shall
not preclude the disclosure of general information by the Union authorities.
Such disclosure must take into account the legitimate interest of the parties
concerned in not having their business secrets divulged.

Article 19
Reporting

By 1 January 2017 and at least every three
years after the entry into force of this Regulation, the Commission shall
submit a report to the European Parliament and the Council on the application
of this Regulation and on progress made in international negotiations regarding
access for EU economic operators to public contract award procedures in third
countries undertaken under this Regulation. To this effect, Member States shall
upon request provide the Commission with appropriate information.

Article 20
Repeals

Articles 58 and 59 of Directive 2004/17/EC
shall be repealed with effect from the entry into force of this Regulation.

Article 21
Entry into force

This Regulation shall enter into force on
the 60th day following that of its publication in the Official Journal of the
European Union.

This Regulation shall be binding
in its entirety and directly applicable in all Member States.

Done at Brussels, 21.3.2012

For the European Parliament                       For
the Council

The President                                                 The
President

ANNEX

List
of international agreements that the Union has concluded in the field of public
procurement including market access commitments

Plurilateral agreement:

- Agreement on Government procurement (OJ
L, 336, 23.12.1994)

Bilateral agreements:

-
Free Trade Agreement between the European Community and Mexico (OJ L 276,
28.10.2000, L 157/30.6.2000)

-
Agreement between the European Community and the Swiss Confederation on certain
aspects of government procurement (OJ L. 114, 30.04.2002)

-
Free Trade Agreement between the European Community and Chile (OJ L352,
30.12.2002)

- Stabilisation and
Association Agreement between the European Community and its Member States and
Former Yugoslav Republic of Macedonia (OJ L 87, 20.03.2004)

- Stabilisation and
Association Agreement concluded between the European Community and Croatia (OJ
L 26, 28.1.2005)

- Stabilisation and
Association Agreement concluded between the European Community and its Member
States and Montenegro (OJ L 345 of 28.12.2007)

- Stabilisation and
Association Agreement concluded between the European Community and Albania (OJ
L 107, 28.4.2009)

- Free Trade Agreement by
the European Union and South Korea - (OJ L 127/14.5.2011)

[1]                      Articles 58 and 59 of Directive 2004/17 on utilities public
procurement procedures.

[2]               Directive 2004/18/EC for entities in the so-called
classic sectors, and Directive 17/2004/EC for entities operating in the water,
energy, transport and postal services sectors (OJ L 134, 30.4.2004, p. 1 and p.
114, respectively).

[3]               COM(2011) 895 final and COM(2011) 896 final.

[4]               Written
submissions were received in addition to the online responses.

[5]               Approach A: EU contracting authorities/entities would
be required in principle to exclude third-country goods, services and companies
not covered by international commitments of the EU.

[6]               Approach B: Subject to notification to the
Commission, EU contracting authorities/entities would have the option to decide
to exclude third-country goods, services and companies not covered by
international commitments of the EU. In addition, the Commission would be
entrusted with a specific tool to conduct enquiries about the market access
situation for EU goods, services and companies and to impose restrictive
measures on goods and services originating in third countries when EU goods,
services and companies do not have sufficient access to the public procurement
markets of those countries.

[7]               COM(2011) 897 final.

[8]               OJ C , , p. .

[9]               OJ C , , p. .

[10]             OJ L 134, 30.4.2004, p. 1

[11]             OJ L 134, 30.4.2004, p. 114.

[12]             OJ L 302, 19.10.1992, p. 1

[13]             OJ L....

[14]             OJ L 349, 31.12.1994

[15]             OJ L 395, 30.12.1989, p. 33

[16]             OJ L 76, 23.3.1992, p. 14

[17]             OJ L 335, 20.12.2007, p. 31

[18]             OJ L 302, 19.10.1992, p. 1

[19]             OJ L 185, 16.8.1971, p. 15.

[20]             OJ L 349, 31.12.1994, p. 71