Ensuring Digital Signature Lawfulness for Procurement in European Union

How to eSign a document: digital signature lawfulness for Procurement in European Union

hi my name is Chris youkins I'm a professor at George Washington University of Law School in the government procurement law program there I'm going to be talking to you today about the new EU foreign subsidies regulation this is part of our program challenges for public procurement in Europe and Beyond it's a concept program it's going to be held in Brussels on June 7th 2020 2023 I hope to be able to join by webinar but if I can join I wanted to have this recording available to outline my program my program presentation thank you so as I said I'm a professor at George Washington University of law school I'm the Lynn David research professor in government procurement law at gwgw at the law school offers JD Masters and Masters in law degrees in procurement law both for students in live sessions and online our program was founded in 1960 by Ralph Nash and John Civic and we regularly work both nationally and internationally in the program we recently had a webinar called a new barrier to transatlantic procurement the European unions foreign subsidies regulation that is available on public procurementinternational.com it's my blog and it's also available on the YouTube page for the GW law government become a law program there are extensive materials that I'll be citing during the presentation today including a government contractor article that I wrote in conjunction with Pascal futon and Max classa who are two partners at the blomstein law firm in um in Berlin all of these materials and and other materials that are resetting are available in the public procurementinternational.com website the EU on foreign subsidies regulation is a very interesting development in uh that's in terms of in terms of international procurement trade um the idea behind it is to level the playing field for European Union vendors internationally the foreign subsidies regulation would impose the EU state aid Doctrine on foreign vendors who are competing in EU member State procurements the the state aid Doctrine is a Doctrine that's simple in concept but very complex and implementation the state aid Doctrine is a set of rules that the European commission will apply to member states to limit the types of subsidies that the member states can afford their businesses or their citizens with the idea that those subsidies could disrupt the you know the efficiency of the internal Market you know the unitary Market in the European Union so the idea behind the foreign substance regulation with regards to procurement it affects other areas as well but with regards to procurement the idea would be that foreign vendors competing in the EU vendor states in the EU member states would have to disclose the foreign government subsidies that they're receiving and the commission will review those subsidies it would be applicable to civil agency procurements above 250 million euros and it's being implemented this year it would also apply to defense procurements because the European commission could Undertake ex-officio and it will be able to undertake ex-officio investigations of Defense procurements as well in practice this foreign subsidies regulation imposes a huge administrative burden on vendors who need to comply coming in from abroad because it requires them to assess and disclose all the potential foreign subsidies and they may be receiving from their their home governments it could also be used strategically by competitors Say by other EU vendors who who seek to complain about foreigners who haven't in their view adequately disclosed their their foreign subsidies so in essence the foreign subsidies regulation could be another weapon used in what we would call a bid protest or a challenge or remedies proceeding uh in in the European Union so um they're they're foreign vendors will have to incur substantial costs comply with this and they face potential disqualification if there it sound that they haven't fully complied I want to talk just briefly about practical implications with it working through a practical example with you in this example a um an EU prime contractor has to choose between two potential suppliers one from outside the European Union say from the United Kingdom or from the United States um and this would be a main supplier A supplier that played an important integral role in the overall project you know and the alternative the the European Union prime contractor bidder could choose to use an EU vendor or supplier as a subcontractor or supplier if the if the EU supplier is used there's not going to be any disclosure required on the fund subsidence regulation but if the non-eu supplier is chosen selected by the by the prime contractor to as a partner in this project there would be substantial disclosure obligations on the foreign subsidies regulation I want to just compare these two on situations between the green and the red here between the EU supplier versus the non-eu supplier now that creates possible issues this is this discriminatory impact between the EU supplier versus the non-ease fire creates potential discriminatory impact um and and two uh lawyers in in Europe has a thesis through um a publication produced about the FSR about the foreign Services regulation of the Walters clear Rebecca Hadlock and Emmanuel Rogers assessed this under various trade agreements including the the government procurement agreement and they pointed out that this may be a violation of the government procurement agreement May well be a violation of the government procurement agreement because in essence there's discrimination between suppliers article 4-2 of the government procurement agreement is which is the leading government procurement leading Trade Agreement governing procurement in the in the international marketplaces Article 4 2 provides it with respect to any measure regarding covered procurement a party including its procuring entities shall not discriminate against a locally established supplier on the basis that the goods or services offered by that supplier for a particular procurement our goods or services of any other party so going back to our example here is the if the prime contract an EU prime contractor shows the non-eu supplier because that was the best solution the arguably the EU prime contractor would suffer discrimination because it would have it and the and the non-eu supplier would share significant risk significant burden and significant risk through the disclosures and through the potential disqualification caused by the FSR they would they would arguably suffer severe discrimination compared to the EU supplier so it appears the the FSR May well trigger violation of the government procurement agreement and other similar trade agreements that the European Union has entered into but we want to focus here on the GPA and the government government agreement the U.S Chamber of Commerce has actually recommended to the European commission that members of the GPA other nations outside the European Union you can see them here on this map it's the green Nations outside the European Union that other nations outside the European Union that are members of the GPA Simply Be Exempted from the um from the foreign subsidies regulation this is this is a recommendation is not without precedent the international procurement instrument which has also been launched by the European Union which is a way to potentially discriminate against vendors from Nations that have not opened their own procurement markets equitably to European Union vendors the IPI the the EU International procurement instrument does explicitly exempt GPA Nations and the same might well be done here by the European Union by because of the potential violation here of the GPA and that's that's really what what informed the recommendation from the U.S Chamber of Commerce that in fact the GPA Nations be expanded be Exempted it's also worth stressing that the reason to exempt the GPA Nations is that if the FSR the foreign substance regulation goes forward it threatens to undo the entire fabric of international procurement trade because it'd be very easy to flip this upside down essentially what the FSR does it is applies a home set of norms from the European Union the state aid Doctrine reflects European Norms reflects European rules we reflects European expectations about appropriate state aid and applies in the foreigners if if this were flipped around if for example the United States started punishing the punishing European vendors because for example their their technicians or their lawyers received subsidies through their through their education their massive substance cities in the European Union to hire to institutions of higher education compared for example of the United States if the United States flipped it around and started applying its own home Norms to European vendors coming in and and imposing penalties on vendors that received those alleged subsidies quickly quickly the the international trade order regarding procurement these free trade order that's been set up through the government procurement agreement released since World War II that could fall apart so there are there are compelling reasons for exempting the GPA Nations uh from the FSR that's it on my presentation if you have any questions please feel free to contact me at cuckens law.gwu.edu thank you very much