The rules of nationality and origin

The rule of nationality sets out the eligibility criteria for participants in tender procedures administered by the Grant Beneficiary during the implementation of an action.

If the grant is financed from the EU Budget, without prejudice to the specificity of each financial instrument as stated in its Regulation, which contains any existing specific eligibility provisions applying to it, the participation in the procurement procedures is normally open on equal terms to all natural and legal persons from:

• a Member State of the European Union;
• a Member State of the European Economic Area ( including Iceland, Liechtenstein and Norway);
• an official candidate country (the former Yugoslav Republic of Macedonia, Croatia, Turkey) or country that is a beneficiary of the Instrument for Pre-Accession assistance (Albania, Bosnia and Herzegovina, Montenegro, Serbia including Kosovo);
• a country that is a direct beneficiary of the funding programme in question;
• in the case of grants financed under a thematic programme, any developing country as specified by the OECD Development Assistance Committee’s list annexed to the instrument (see EC external aid programmes);
• those countries that are beneficiaries of a decision establishing reciprocal access to external aid.

For the purposes of verifying compliance with the nationality rule, the tender dossier requires tenderers to state the country of which they are nationals by presenting the documents usual under that country's law.

If the Contracting Authority suspects that a candidate/tenderer has only a registered office in an eligible country or state and that the nationality of the candidate/tenderer is ineligible, the candidate/tenderer is responsible for demonstrating effective and continuous links with that country's economy. This is to avoid awarding contracts to firms whose nationalities are ineligible but which have set up 'letter box' companies in an eligible country to circumvent the rules on nationality.

If the basic act or the other instruments (see Financial instruments and legal basis) applicable to the programme under which the grant is financed contain rules of origin for supplies acquired by the Beneficiary in the context of the grant, the tenderer must state the origin of supplies. All supplies and materials purchased under a contract financed under an EU instrument must originate from the EU or from an eligible country (see above ‘rule of nationality’).

The country of production is not necessarily the country of origin. Where there is only one country of production, the origin of the finished product is easily established. However, in cases where more than one country is involved in the production of goods it is necessary to determine which of those countries confers origin on the finished goods. The country of origin is deemed to be the country in which the goods have undergone their last, economically justified, substantial transformation.
If the last substantial transformation has not taken place in a Member State of the European Union or one of the eligible recipient countries, the goods cannot be tendered for the project.

The supplier must certify that the goods tendered comply with the origin requirement specifying the country or countries of origin. When tendering for systems comprising more than one item, the origin of each item in the system must be specified. If requested to do so, the supplier must provide any additional information and/or a certificate of origin in support of the origin claimed in the tender.

Suppliers must present proof of origin for equipments and vehicles of a unit cost on purchase of more than € 5,000. The certificate of origin must be made out by the competent authorities of the country of origin of the supplies and must comply with the rules laid down by the relevant Union legislation.
Where the provision of a Certificate of Origin is not possible (in many countries these are only issued against presentation to the Chamber of Commerce of commercial invoices), the tenderer can in these cases submit its own declaration.

Where an agreement on widening the market for procurement of goods or services applies, the procurement contracts must also be open to nationals of other countries under the conditions laid down in that agreement.

In addition, in duly substantiated exceptional cases, the Commission may allow nationals of countries other than those referred above to tender for contracts (or supplies of goods originating in such countries) on the basis of the specific conditions laid down in the basic act or other instrument governing the programme under which the grant is financed.



Sources and useful links:

• EuropeAid website - Eligibility
• PRAG 2010
• Contract-award procedures (Annex IV)