TY - JOUR

T1 - Restricting Freedom of Contract – the EU Foreign Subsidies Regulation and its Consequences for Public Procurement

AU - Andhov, Marta

AU - Kania, Michal Andrzej

PY - 2023

Y1 - 2023

N2 - The principle of freedom in contracting is a cornerstone of private contract law and ensures the liberty to choose one's business partners. However, this freedom is curtailed within the realm of public contracts, especially in the European Union. Restrictions primarily arise from EU Public Procurement law, which enforces principles such as equal treatment, non-discrimination, and exclusion grounds outlined in Directive 2014/24/EU, thereby limiting the pool of potential contractors eligible for public contracts. Nonetheless, the ever-evolving economic and geopolitical landscape broadens the list of restrictions, encompassing legal sources beyond procurement law, like the newly introduced EU Foreign Subsidies Regulation (FSR). This paper explores the recently enacted FSR and its repercussions on the EU public procurement marketplace and corporations from third countries. To accomplish this objective, we initiate our discussion by providing the economic and geopolitical backdrop for adopting the FSR (section 3). Following that, we delve into the legislative process of FSR enactment and its purview (section 4). Further, we assess the FSR procedure, considering its internal and systemic effectiveness (section 5). In section 6, we juxtapose the FSR with its adjunct tool, the International Procurement Instrument. The final section 7 concludes with summarizing insights. The investigation implements both doctrinal and analytical legal methods. The article contains original content concerning both geopolitical grounds and analysis of the effectiveness of the solutions adopted in FSR.

AB - The principle of freedom in contracting is a cornerstone of private contract law and ensures the liberty to choose one's business partners. However, this freedom is curtailed within the realm of public contracts, especially in the European Union. Restrictions primarily arise from EU Public Procurement law, which enforces principles such as equal treatment, non-discrimination, and exclusion grounds outlined in Directive 2014/24/EU, thereby limiting the pool of potential contractors eligible for public contracts. Nonetheless, the ever-evolving economic and geopolitical landscape broadens the list of restrictions, encompassing legal sources beyond procurement law, like the newly introduced EU Foreign Subsidies Regulation (FSR). This paper explores the recently enacted FSR and its repercussions on the EU public procurement marketplace and corporations from third countries. To accomplish this objective, we initiate our discussion by providing the economic and geopolitical backdrop for adopting the FSR (section 3). Following that, we delve into the legislative process of FSR enactment and its purview (section 4). Further, we assess the FSR procedure, considering its internal and systemic effectiveness (section 5). In section 6, we juxtapose the FSR with its adjunct tool, the International Procurement Instrument. The final section 7 concludes with summarizing insights. The investigation implements both doctrinal and analytical legal methods. The article contains original content concerning both geopolitical grounds and analysis of the effectiveness of the solutions adopted in FSR.

KW - Faculty of Law

KW - public procurement

KW - freedom of contracting

KW - public contract

KW - subsidies

KW - International Procurement Instrument

KW - FSR

KW - IPI

KW - competition

M3 - Journal article

JO - Journal of Public Procurement

JF - Journal of Public Procurement

SN - 1535-0118

ER -