CJEU judgment in Case C-652/22: How has it affected the participation of third country contractors in EU public procurement?

Before the issuance of the CJEU judgment in case C-652/22, contractors from third countries not bound by mutual agreements with the European Union (EU) faced unclear and inconsistent treatment in public procurement procedures across the EU.

The lack of clear regulations at EU level led to uncertainty and risks for those entities that wanted to compete for public contracts in EU member states.

What have the new EU procurement rules changed?

After the amendment of the EU regulations concerning public procurement, in 2022, of the International Procurement Instrument. In addition, the Foreign Subsidies Regulation was introduced and the European Commission was empowered to restrict or ban access to procurement markets by third-country economic operators.

Despite this shift to the EU procurement regulations, this change has not led to the complete closure of the EU public procurement market to third-country entities that have not signed an appropriate international agreement with the EU. This access was still recognized as possible (as indicated in the Communication from the Commission on guidance on the participation of third-country bidders and goods in the EU procurement market (2019/C 271/02) but the shift in the EU public procurement policy was noticeable.

In the absence of uniform EU-level measures, disputes arose regarding the applicability of EU law to third-country contractors, particularly in cases where no binding international agreement existed.

This uncertainty set the stage for the CJEU judgment, which sought to clarify the legal framework and the extent of protections available to third-country contractors.

The CJEU judgment and its impact on third-country contractors

The CJEU’s judgment in case C-652/22 complicated the legal status of third-country contractors in EU public procurement even more. The case concerned a Turkish contractor disputing a public procurement decision in Croatia.

The court ruled that contractors from third countries without reciprocal agreements guaranteeing access to EU markets could not rely on EU public procurement regulations to challenge procurement decisions.

The judgment emphasized that the EU retains exclusive competence over the regulation of access to its procurement markets. Member states cannot unilaterally grant market access to third-country contractors beyond the scope of existing international agreements.

Practical implications of the judgment

Despite such of a strict recognition of the EU laws in this regard, the court also indicated, that this rule is to be enforced by the by the relevant contracting entity under the public procurement procedure. 

However, in the course of the public tender, the third-country may not invoke rules and regulations under EU law, i.a. equal treatment or transparency in disputes, limiting their recourse to the domestic legal framework of the procuring member state.

This decision has significant implications. Contractors from third countries now face stricter limitations and must carefully navigate national regulations, which may vary widely in their openness to foreign participation. 

In particular, suppliers from countries such as China, India and Turkey may be affected by regulations under this provision.

The position of the Polish Public Procurement Office and its implications

Following the CJEU judgment, the Polish Public Procurement Office (Urząd Zamówień Publicznych, UZP) issued an interpretation aligning national procurement practices with the court’s ruling. The UZP clarified that contracting authorities in Poland are empowered to restrict or allow access to public procurement for third-country contractors, provided these restrictions are explicitly stated in the procurement documents.

According to the UZP, contracting authorities must specify whether third-country contractors are eligible to participate. If no such provisions are included, the default assumption is that these contractors are allowed to bid under the principle of transparency. 

However, it is possible for the contracting authorities to deny the access of those contractors in the proceedings. If the access is denied, offers from ineligible contractors must be rejected based on non-compliance with tender conditions.

Moreover, during the public procurement proceedings, the third-country contractors may enforce their rights in the proceedings using only the Polish law provisions, without the possibility to rely on or to refer to the UE law public procurement regulations.

How does the CJEU judgment impact third-country contractors?

The CJEU judgment in case C-652/22 represents a turning point in the treatment of third-country contractors in EU public procurement. It solidifies the EU’s control over market access, empowers member states to enforce national rules, and reinforces the strategic importance of procurement policies in international relations.

It also provides a really serious means of control of the public procurement contractors by the contracting authorities, which have been given the ability to decide on their own on limitation of the jurisdiction of entities that can join the public procurement procedure.

Do you have questions about the new rules in public procurement? Contact our experts and find out how best to prepare for the new legal changes!