On case C-652/22 Kolin Inşaat Turizm Sanayi ve Ticaret
The CJEU laid down early this week a fairly important judgment on third country access to procurement. On case C-652/22 Kolin Inşaat Turizm Sanayi ve Ticaret the Court concluded that economic operators from third countries neither party to the GPA nor with whom the EU has a deal are not entitled to equal treatment and certainly not remedies based on EU law.
In the view of the Court, the common commercial policy is an exclusive competence of the Union and its commitments to the GPA and trade deals covering procurement, as well as the International Procurement Instrument (IPI) Regulation mean that it is not up for member States to contravene said competence with acts of general application. In effect the consequence seems to be that while third country economic operators can participate in procurement processes, they are no afforded any sort of protection arising from EU law and member States cannot legislate otherwise.
My concerns about the IPI aside, 'we are where we are' and I have to agree with the overall perspective of the Court despite some specific concerns about the details and practical consequences arising from the judgment.
First concern: not taking the argument to its logical conclusion
The Court decided to split hairs a couple of times in its judgement. On the one hand, its logical argument is that i) common commercial policy is an exclusive competence; ii) the EU already has commitments that guarantee to economic operators equal treatment as long as they come from certain third countries (ie, GPA parties or those with trade deals covering procurement).
On the other hand, the Court then states that perhaps transparency and proportionality may apply to economic operators from third countries (para 66), thus extending some EU law protections but not equal treatment. Well, the Court does caveat that any infringement should be examined in the light of national law only. But why mention specifically two of the general principles applicable to procurement that arise from EU law?
Furthermore, the Court did not really follow its argument to its logical conclusion. If the EU's procurement legislation is subject to the commercial policy as an exclusive competence, then its logical consequence is that procurement contracts should be available only to contractors within the 'tent' afforded by the GPA and bilateral trade deals that cover procurement. What makes no sense is saying they can participate, benefit from some general principles but should be denied any means of redress if they're dissatisfied with the contracting authority.
Second concern: contracts below-thresholds
The Court's judgment also increases the legal uncertainty for contracts below thresholds, which by default are not considered to be part of the single market and as such not subject to EU law unless they generate 'certain cross-border interest.' This is a messy system and again one of the Court's own making.
Once again logic would dictate that those below-threshold contracts without that 'certain cross-border interest' would not be affected by the ruling, since they are not covered by EU rules. When it comes to remedies, many member States have extended the same protections offered for contracts above-thresholds to these contracts but naturally this access to remedies is facilitated exclusively by national law.
However, by underpinning the judgement on an exclusive competence of the Union the question the Court left in the air is thus: are member States precluded from offering means of redress to third country economic operators tendering in contracts below-thresholds?
It seems to me that the situation with below threshold contracts keeps evolving into a messier state. They're a relic from a by gone era and one that makes no sense from a system's perspective. Can anyone imagine how the single market would look if the four freedoms were to be subject to financial thresholds? Even if you can imagine it, would it make any sense?