For the primary time, the European Fee accomplished an investigation below the Worldwide Procurement Instrument (IPI) and carried out measures to restrict the participation of financial operators from non-EU nations – on this specific case, China – within the EU public procurement market. After EU suppliers of medical gadgets have arguably been denied truthful entry to Chinese language authorities contract alternatives for years, the EU has now responded with Implementing Regulation (EU) 2025/1197 that requires contracting authorities/entities in all EU member states to exclude Chinese language suppliers – and to a sure extent merchandise manufactured in China – from bigger public procurement contracts for medical gadgets.
Contents
Public tenders account for roughly two thirds of all medical gadgets income within the EU. In 2023 alone, this reportedly translated into virtually EUR 100 billion in annual purchases by nationwide well being ministries, regional well being funds, hospitals and different contracting authorities/entities. Contracts with a complete worth of above EUR 5 million, which are actually principally shielded from Chinese language enter, are stated to symbolize virtually 60% of the entire worth of all EU medical-device tenders, masking objects similar to imaging suites, laboratory analyzers, and consumables coated by framework agreements.
Contracting authorities/entities of the EU Member States should now exclude Chinese language firms from all public procurement alternatives for the sale of medical gadgets within the EU if the entire contract worth exceeds EUR 5 million (internet). Furthermore, profitable bidders are required to ensure that not more than 50% of their supplies or elements for the general public contract or framework settlement originate from China. Exceptions are solely doable the place no various suppliers can be found. These restrictions have been enacted by way of Fee Implementing Regulation (EU) 2025/1197 of 19 June 2025 “imposing an IPI measure limiting the entry of financial operators and medical gadgets originating within the Individuals’s Republic of China to the European Union public procurement marketplace for medical gadgets”, which has come into impact on 30 June 2025. For the primary time, the European Fee accomplished such an investigation below the IPI and carried out measures to restrict the participation of financial operators from non-EU nations within the EU public procurement market.
On this consumer alert, we offer you an outline of an important necessities set out within the Fee Implementing Regulation (EU) 2025/1197 and its penalties available on the market.
Please don’t hesitate to contact us if you need to discover any facet in additional element. We’re comfortable that will help you navigate the evolving regulatory panorama and establish strategic pathways to make sure your continued financial success within the European market.
Obligated patrons
The IPI measure binds all EU Member State contracting authorities/entities that procure provides below the EU Public Procurement Directive 2014/24/EU (this may cowl nearly all of procurements), the EU Utilities Procurement Directive 2014/25/EU (e.g., for procurements by state-funded airports) and the EU Concessions Directive 2014/23/EU (e.g., by means of a service concession for the availability of medical tools), as carried out below nationwide legislation.
Relying on whether or not the related Member State makes use of a centralized, a decentralized or a hybrid procurement mannequin, the affected contracting authorities can be nationwide or regional central buying organizations, member-based buying associations, hospital teams, public well being funds, or particular person patrons, similar to single hospitals, state laboratories or different public businesses requiring medical gadgets.
Procurements below the EU Defence Procurement Directive and procurements by EU establishments usually are not coated by the IPI.
Affected procurements and sorts of merchandise
The IPI restriction of the entry of financial operators and medical gadgets originating within the Individuals’s Republic of China applies in all classes of medical gadgets categorized below the Frequent Procurement Vocabular (CPV) codes 33100000-1 to 33199000-1, outlined in Regulation (EC) No 2195/2002, as amended. The respective codes embody at least 350 totally different sorts of merchandise, together with all kinds of medical merchandise, starting from medical consumables to magnetic resonance imaging machines (and lots of extra).
The IPI measure applies solely to public procurement of those sorts of merchandise if the estimated complete contract worth in a given tender process exceeds EUR 5 million for items. The calculation shall be primarily based on the entire quantity payable, internet of VAT, together with any type of choice and any renewals of the contracts. With regard to framework agreements and dynamic buying techniques, the worth to be considered shall be the utmost estimated worth internet of VAT of all of the contracts envisaged for the entire time period of the framework settlement or the dynamic buying system. The place a proposal for the acquisition of comparable provides might end in contracts being awarded within the type of separate heaps, account shall be taken of the entire estimated worth of all such heaps. After all, the strategy used to calculate the estimated worth of a procurement shall not be made with the intention of excluding it from the scope of the IPI measure. The identical applies to any ways the place bigger procurements are artificially break up into separate procurements.
Sanctioned suppliers
An financial operator is “Chinese language” for the needs of the IPI whether it is constituted or in any other case organized below the legal guidelines of the Republic of China and is engaged in substantive enterprise operations in China (as additional defined within the Fee Tips 2023/C 64/04 to facilitate the appliance of the IPI Regulation by contracting authorities and contracting entities and by financial operators).
Even an financial operator (e.g., a subsidiary) constituted or in any other case organized within the EU or one other Non-EU nation than China might be deemed “Chinese language”. As a result of if it isn’t engaged in substantive enterprise operations within the territory of the nation by which it’s constituted or in any other case organized, the origin of the authorized particular person is to be that of the particular person or individuals who might train, immediately or not directly, a dominant affect on the authorized particular person by advantage of their possession of that authorized particular person, their monetary participation therein, or the principles which govern that authorized particular person. Because of this even financial operators of different nations might be deemed as “Chinese language” if they’re managed by Chinese language firms or individuals.
Teams of financial operators (i.e., bidding consortia) are deemed “Chinese language” if a minimum of one of many members is Chinese language (within the which means summarized above) and its participation quantities to a minimum of 15 % of the worth of a young submitted by that group – except the Chinese language member is important with a view to fulfil nearly all of a minimum of one of many choice standards in a public procurement process, by which case the consortium is roofed by the IPI measure whatever the 15 % rule.
Sanctioned merchandise
Even when a profitable bidder in a medical gadgets procurement just isn’t a Chinese language provider, they’re nonetheless required below the IPI measure to ensure that not more than 50% of their supplies or elements for the general public contract or framework settlement “originate” from China. Below the IPI, the origin of a very good shall be decided in accordance with Article 60 of Regulation (EU) No 952/2013 (the Union Customs Code) (additional defined within the Fee Tips 2023/C 64/04).
Because of this items wholly obtained in China or a Chinese language territory shall be considered having their origin in China. If the manufacturing of the related items entails a couple of nation or territory, the products shall be deemed to originate within the nation or territory the place they underwent their final, substantial, economically-justified processing or working, in an endeavor outfitted for that goal, ensuing within the manufacture of a brand new product or representing an vital stage of manufacture.
Response from China and Outlook
Given the anticipated affect of the current IPI measure on the Chinese language medical merchandise business, it isn’t shocking that the Chinese language Authorities has already indicated that it’s going to now equally prohibit authorities purchases of EU medical gadgets (excluding merchandise made by European firms in China). China’s finance ministry is reported to have stated that the measures have been needed steps in response to the IPI measure.
The IPI instrument in opposition to Chinese language medical gadgets is just one of a number of present examples of the altering world political panorama and its impacts on EU public procurement procedures. If you wish to discover out extra concerning the EU’s normal coverage path in direction of “European sovereignty” necessities, seek the advice of our consumer alert “European Union: “Purchase European” will get enamel.“
For the primary time, the European Fee accomplished an investigation below the Worldwide Procurement Instrument (IPI) and carried out measures to restrict the participation of financial operators from non-EU nations – on this specific case, China – within the EU public procurement market. After EU suppliers of medical gadgets have arguably been denied truthful entry to Chinese language authorities contract alternatives for years, the EU has now responded with Implementing Regulation (EU) 2025/1197 that requires contracting authorities/entities in all EU member states to exclude Chinese language suppliers – and to a sure extent merchandise manufactured in China – from bigger public procurement contracts for medical gadgets.
Contents
Public tenders account for roughly two thirds of all medical gadgets income within the EU. In 2023 alone, this reportedly translated into virtually EUR 100 billion in annual purchases by nationwide well being ministries, regional well being funds, hospitals and different contracting authorities/entities. Contracts with a complete worth of above EUR 5 million, which are actually principally shielded from Chinese language enter, are stated to symbolize virtually 60% of the entire worth of all EU medical-device tenders, masking objects similar to imaging suites, laboratory analyzers, and consumables coated by framework agreements.
Contracting authorities/entities of the EU Member States should now exclude Chinese language firms from all public procurement alternatives for the sale of medical gadgets within the EU if the entire contract worth exceeds EUR 5 million (internet). Furthermore, profitable bidders are required to ensure that not more than 50% of their supplies or elements for the general public contract or framework settlement originate from China. Exceptions are solely doable the place no various suppliers can be found. These restrictions have been enacted by way of Fee Implementing Regulation (EU) 2025/1197 of 19 June 2025 “imposing an IPI measure limiting the entry of financial operators and medical gadgets originating within the Individuals’s Republic of China to the European Union public procurement marketplace for medical gadgets”, which has come into impact on 30 June 2025. For the primary time, the European Fee accomplished such an investigation below the IPI and carried out measures to restrict the participation of financial operators from non-EU nations within the EU public procurement market.
On this consumer alert, we offer you an outline of an important necessities set out within the Fee Implementing Regulation (EU) 2025/1197 and its penalties available on the market.
Please don’t hesitate to contact us if you need to discover any facet in additional element. We’re comfortable that will help you navigate the evolving regulatory panorama and establish strategic pathways to make sure your continued financial success within the European market.
Obligated patrons
The IPI measure binds all EU Member State contracting authorities/entities that procure provides below the EU Public Procurement Directive 2014/24/EU (this may cowl nearly all of procurements), the EU Utilities Procurement Directive 2014/25/EU (e.g., for procurements by state-funded airports) and the EU Concessions Directive 2014/23/EU (e.g., by means of a service concession for the availability of medical tools), as carried out below nationwide legislation.
Relying on whether or not the related Member State makes use of a centralized, a decentralized or a hybrid procurement mannequin, the affected contracting authorities can be nationwide or regional central buying organizations, member-based buying associations, hospital teams, public well being funds, or particular person patrons, similar to single hospitals, state laboratories or different public businesses requiring medical gadgets.
Procurements below the EU Defence Procurement Directive and procurements by EU establishments usually are not coated by the IPI.
Affected procurements and sorts of merchandise
The IPI restriction of the entry of financial operators and medical gadgets originating within the Individuals’s Republic of China applies in all classes of medical gadgets categorized below the Frequent Procurement Vocabular (CPV) codes 33100000-1 to 33199000-1, outlined in Regulation (EC) No 2195/2002, as amended. The respective codes embody at least 350 totally different sorts of merchandise, together with all kinds of medical merchandise, starting from medical consumables to magnetic resonance imaging machines (and lots of extra).
The IPI measure applies solely to public procurement of those sorts of merchandise if the estimated complete contract worth in a given tender process exceeds EUR 5 million for items. The calculation shall be primarily based on the entire quantity payable, internet of VAT, together with any type of choice and any renewals of the contracts. With regard to framework agreements and dynamic buying techniques, the worth to be considered shall be the utmost estimated worth internet of VAT of all of the contracts envisaged for the entire time period of the framework settlement or the dynamic buying system. The place a proposal for the acquisition of comparable provides might end in contracts being awarded within the type of separate heaps, account shall be taken of the entire estimated worth of all such heaps. After all, the strategy used to calculate the estimated worth of a procurement shall not be made with the intention of excluding it from the scope of the IPI measure. The identical applies to any ways the place bigger procurements are artificially break up into separate procurements.
Sanctioned suppliers
An financial operator is “Chinese language” for the needs of the IPI whether it is constituted or in any other case organized below the legal guidelines of the Republic of China and is engaged in substantive enterprise operations in China (as additional defined within the Fee Tips 2023/C 64/04 to facilitate the appliance of the IPI Regulation by contracting authorities and contracting entities and by financial operators).
Even an financial operator (e.g., a subsidiary) constituted or in any other case organized within the EU or one other Non-EU nation than China might be deemed “Chinese language”. As a result of if it isn’t engaged in substantive enterprise operations within the territory of the nation by which it’s constituted or in any other case organized, the origin of the authorized particular person is to be that of the particular person or individuals who might train, immediately or not directly, a dominant affect on the authorized particular person by advantage of their possession of that authorized particular person, their monetary participation therein, or the principles which govern that authorized particular person. Because of this even financial operators of different nations might be deemed as “Chinese language” if they’re managed by Chinese language firms or individuals.
Teams of financial operators (i.e., bidding consortia) are deemed “Chinese language” if a minimum of one of many members is Chinese language (within the which means summarized above) and its participation quantities to a minimum of 15 % of the worth of a young submitted by that group – except the Chinese language member is important with a view to fulfil nearly all of a minimum of one of many choice standards in a public procurement process, by which case the consortium is roofed by the IPI measure whatever the 15 % rule.
Sanctioned merchandise
Even when a profitable bidder in a medical gadgets procurement just isn’t a Chinese language provider, they’re nonetheless required below the IPI measure to ensure that not more than 50% of their supplies or elements for the general public contract or framework settlement “originate” from China. Below the IPI, the origin of a very good shall be decided in accordance with Article 60 of Regulation (EU) No 952/2013 (the Union Customs Code) (additional defined within the Fee Tips 2023/C 64/04).
Because of this items wholly obtained in China or a Chinese language territory shall be considered having their origin in China. If the manufacturing of the related items entails a couple of nation or territory, the products shall be deemed to originate within the nation or territory the place they underwent their final, substantial, economically-justified processing or working, in an endeavor outfitted for that goal, ensuing within the manufacture of a brand new product or representing an vital stage of manufacture.
Response from China and Outlook
Given the anticipated affect of the current IPI measure on the Chinese language medical merchandise business, it isn’t shocking that the Chinese language Authorities has already indicated that it’s going to now equally prohibit authorities purchases of EU medical gadgets (excluding merchandise made by European firms in China). China’s finance ministry is reported to have stated that the measures have been needed steps in response to the IPI measure.
The IPI instrument in opposition to Chinese language medical gadgets is just one of a number of present examples of the altering world political panorama and its impacts on EU public procurement procedures. If you wish to discover out extra concerning the EU’s normal coverage path in direction of “European sovereignty” necessities, seek the advice of our consumer alert “European Union: “Purchase European” will get enamel.“
