As the European national governments implement the new EU Public Procurement Directive, government suppliers face tighter restrictions on bribery and other corruption activities and potentially even IP infringements going forward.
The EU adopted new public-procurement rules in February 2014, the first major update to this legislation since 2004, and gave EU member governments until April 2016 to “transpose” these into their national laws. Among other improvements, the Directive tightens rules against bribery and other corruption in several ways.
Most notably, the Directive strengthens and extends the grounds for excluding bidders for government contracts, making conviction for “corruption” (which includes bribery) a ground for mandatory exclusion of a bidder (Article 57(1)(b)). It also extends the grounds for exclusion to situations where bidders have entered into agreements, tried to obtain confidential information, or tried to mislead or influence the contracting authority.
The Directive for the first time also defines and provides for optional exclusion of bidders engaged in a “conflict of interest”.
National governments are currently considering how they will implement the Directive. The UK’s statutory instrument implementing the Directive, for example, lists five separate anti-bribery laws which, if violated, will bar a bidder from government contracts.
The EU Directive may also lead to more specific treatment of intellectual property violations as grounds for excluding bidders from government contracts. Recital 101 of the Directive specifically says that violations of IP rights as well as competition rules could constitute “grave professional misconduct”, which Article 57 lists as a situation where national authorities have the option to exclude bidders.
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Related CREATe.org Resources:
- Addressing Corruption Risk Through Enterprise Risk Management: CREATe outlines how companies can take a more holistic approach to corruption prevention.
- Protecting Intellectual Property Through Enterprise Risk Management: This whitepaper outlines how companies can better safeguard key corporate intellectual property (IP) assets.
- Government Procurement: Driving Responsible Business Practices: CREATe.org has launched a whitepaper that explores the link between government procurement and responsible business practices.