Game-changing shift in Swedish procurement law – foreign suppliers face potential exclusion
The Swedish Government has recently appointed an expert that will draft a proposal on how the procurement legislation should be changed to comply with the preliminary rulings of the Court of Justice of the European Union (“ECJ”) in cases C-652/22 and C-266/22, and what possibilities contracting authorities and entities have to exclude suppliers from procurement procedures based on their nationality or origin.
In this blog post, we analyse the two ECJ rulings, their impact on the expert’s assignment, and discuss their broader implications for Swedish procurement practices.
The ECJ’s cases C-652/22, Kolin and C-266/22, Qingdao
On 22 October 2024, the ECJ issued its judgment in Case C-652/22, Kolin. The case concerned a Croatian public procurement procedure for the construction of railway infrastructure. Kolin, a Turkish company, was not awarded the contract and filed a complaint with the national courts.
The ECJ was asked by the national court to assess whether a third-country supplier can challenge a public contract award in an EU Member State based on EU public procurement rules. In its ruling, the ECJ held that while EU law does not prevent suppliers from countries without relevant agreements (like the Agreement on Government Procurement, the GPA) from participating in procurement procedures, such suppliers cannot invoke EU procurement law to demand equal treatment. Their complaints can only be assessed under national law, not EU law.
The ECJ also emphasised that the EU has exclusive competence regarding common commercial policy and that only the EU has the competence to adopt an act of general application concerning access to public procurement procedures for suppliers of a third country which has not concluded an international agreement with the EU. Member States are not empowered to legislate in this area.
Five months later, on 13 March 2025, the ECJ issued its judgment in case C-266/22, Qingdao. The case concerned a Romanian public tender for the purchase of trains and related maintenance services. A consortium led by Qingdao was excluded from the procedure as, under Romanian law, the Chinese based Qingdao did not fall within the concept of “economic operator”. The consortium challenged the exclusion.
The ECJ reaffirmed its position from Kolin, stating that EU public procurement rules do not apply to tenders from suppliers in third countries lacking an international agreement with the EU ensuring equal and reciprocal access. It also reiterated that the EU holds exclusive competence to regulate such access, meaning that Member States cannot adopt national laws requiring the exclusion of these suppliers. Any such national legislation is inapplicable.
Instead, the ECJ determined that contracting authorities have the discretion to assess whether suppliers from such third countries should be admitted to public procurement procedures. Furthermore, if the suppliers are admitted, the contracting authority may decide whether adjustments should be applied when comparing these tenders with those submitted by other suppliers.
What we can expect
Due to the deteriorating international security situation, both the Swedish Government and the EU have grown increasingly cautious regarding the involvement of third country actors in public procurement. This has resulted in the implementation of several ways to control such involvement. Some examples include screening of foreign direct investments (FDI) and investigation of foreign subsidies that undermine fair competition within the EU. The FDI framework is designed to screen investments that may affect security or public order. The Foreign Subsidies Regulation (FSR), effective since July 2023, allows the European Commission to investigate and remedy subsidies from non-EU countries that distort the internal market, including through M&A transactions and public procurement.
Today, the Swedish Public Procurement Acts do not distinguish between companies based in the EU or in countries with EU trade agreements, and those from countries without such agreements. In light of the ECJ’s rulings in Kolin and Qingdao, the Government considers that Sweden has implemented the underlying EU directives incorrectly.
So, what changes can we expect? It is clear that the expert’s proposed reforms to Sweden’s public procurement legislation would relieve contracting authorities from the obligation to treat suppliers from third countries without relevant EU agreements on equal terms. One likely approach is to narrow the definition of ”supplier” to reflect the distinctions made by the ECJ between different categories of suppliers. The Swedish public procurement legislation would then not be directly applicable in relation to suppliers from third countries lacking relevant international agreements. This approach is likely the least intrusive way to achieve compliance with the ECJ rulings.
Nevertheless, any legislative amendments must not mandate automatic exclusion of third-country suppliers, as was the case in Qingdao. Rather, Swedish contracting authorities should maintain discretionary power to determine whether suppliers from third countries without relevant international agreements with the EU may participate in procurement procedures, and to establish appropriate conditions for such participation.
Until amendments are made to the Swedish Public Procurement Acts, contracting authorities face complex legal challenges. How similar cases will be handled remains uncertain, particularly given the principles of EU law primacy and the obligation to interpret national law in conformity with EU law. The Delphi team has extensive experience supporting international companies in submitting tenders in Swedish public procurements and stands ready to assist organisations in navigating this evolving legal landscape.