Commission Implementing Regulation (EU) 2025/1197 of 19 June 2025 imposing an International Procurement Instrument measure restricting the access of economic operators and medical devices originating in the People’s Republic of China to the European Union public procurement market for medical devices pursuant to Regulation (EU) 2022/1031 of the European Parliament and of the Council

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Regulation (EU) 2022/1031 of the European Parliament and of the Council of 23 June 2022 on the access of third-country economic operators, goods and services to the Union’s public procurement and concession markets and procedures supporting negotiations on access of Union economic operators, goods and services to the public procurement and concession markets of third countries (International Procurement Instrument – IPI) (1) (the ‘IPI Regulation’), and in particular Article 6(1) and (6), letter b), thereof,

Whereas:

(1) On 24 April 2024, the European Commission (‘the Commission’) initiated, on its own initiative, an investigation pursuant to Article 5(1) of the IPI Regulation concerning measures and practices of the People’s Republic of China (‘the PRC’) resulting in a serious and recurrent impairment of access of Union economic operators, goods and services to the PRC’s public procurement market for medical devices. To this end, the Commission published a Notice of Initiation in the Official Journal of the European Union (2) (‘the Notice of Initiation’).

(2) In the Notice of Initiation, the Commission identified three categories of measures and practices: (i) those favouring the procurement of domestic medical devices and services; (ii) those restricting the procurement of imported goods, including medical devices; and (iii) those imposing conditions in the PRC’s centralised procurement of medical devices leading to abnormally low bids that cannot be sustained by profit-oriented companies.

(3) In accordance with Article 5(2) of the IPI Regulation, the Commission invited the Government of China (‘GOC’) to submit its views, provide relevant information and engage in consultations to eliminate or remedy the measures and practices included in the Notice of Initiation. The Commission also sent to the GOC a request for information in the form of a detailed questionnaire. The GOC did not reply to this questionnaire but engaged in consultations with the Commission, within the meaning of Article 5(2) of the IPI Regulation, which took place from 24 to 26 July 2024 in Beijing.

(4) On 14 January 2025, upon conclusion of its investigation and the consultations with the PRC, the Commission made publicly available a report pursuant to Article 5(4) of the IPI Regulation containing the findings of its investigation and a proposed course of action (3) (‘the investigation report’).

(5) In the investigation report, the Commission concluded that the measures and practices identified during the investigation (4) (‘the identified measures and practices’) exist, are applied across the entire territory of the PRC, and affect all categories of medical devices in a way that results in a serious and recurrent impairment of access of Union economic operators and Union-made medical devices to the public procurement market for medical devices in the PRC. Therefore, they constitute third-country measures or practices within the meaning of Article 2(1), point (i) of the IPI Regulation. The Commission also noted that the GOC did not propose any specific corrective action to remedy this serious and recurrent impairment of access.

(6) On that basis, the Commission proposed to assess the conditions laid down in Article 6 of the IPI Regulation in view of adopting an IPI measure as defined in Article 2(1), point (j) of the IPI Regulation.

(7) The Commission presented the investigation report to the European Parliament and to the Council, pursuant to Article 5(4) of the IPI Regulation, on 29 and 30 January 2025, respectively.

(8) On 19 February 2025, the Commission published a notice of public consultation (5), in which it sought the views of entities that may be potentially affected by a possible IPI measure pursuant to Article 6 of the IPI Regulation restricting the access of economic operators and medical devices originating in the PRC to the Union’s public procurement market for medical devices (‘the public consultation’). The Commission received submissions from several entities. Certain submissions related to potential supply issues concerning certain medical devices and budgetary implications for contracting authorities and contracting entities. Other submissions concerned the potential impact of the measures on economic operators manufacturing medical devices in the PRC, the determination of the origin of goods and economic operators as well as the determination of the value of the tenders. Certain entities requested clarification on how the 50 % thresholds referred to in Article 8(1) of the IPI Regulation would be established and the necessary evidence the concerned economic operators would need to provide. The Commission duly took into account the submissions received in its assessment.

(9) As required by Article 5(2) of the IPI Regulation, the Commission has regularly informed Member States on the progress of the investigation and consultations within the Trade Barriers Committee established by Article 7 of Regulation (EU) 2015/1843 of the European Parliament and of the Council (6).

(10) Following the publication of the investigation report, the Trade Barriers Committee has also been updated on the assessment of the conditions laid down in Article 6 of the IPI Regulation in view of the possible adoption of an IPI measure as defined in Article 2(1), point (j) of the IPI Regulation.

(11) In the framework of the assessment of the condition laid down in Article 6(3), point (b) of the IPI Regulation about the ‘availability of alternative sources of supply for the goods […] concerned, in order to avoid or minimise a significant negative impact on contracting authorities and contracting entities’, the Commission consulted Member States in the Trade Barriers Committee to ascertain that there are no dependencies of Members States on medical devices originating in the PRC.

(12) In accordance with Article 6(1) of the IPI Regulation, where the Commission finds that a third-country measure or practice, within the meaning of Article 2(1), point (i) exists, it is to, if it considers it to be in the interest of the Union, adopt an IPI measure by means of an implementing act. Article 6(2) of the IPI Regulation specifies that an IPI measure is not to be adopted where the Commission concludes that it is not in the Union’s interest to adopt such a measure.

(13) Pursuant to Article 6(3) of the IPI Regulation, an IPI measure is to be determined in light of available information and on the basis of two criteria: (i) its proportionality with regard to the third-country measure or practice; and (ii) the availability of alternative sources of supply for the goods and services concerned, in order to avoid or minimise a significant negative impact on contracting authorities and contracting entities. In conformity with Article 6(8) of the IPI Regulation, the Commission is to specify the scope of application of the IPI measure, including the sectors or categories of goods, the specific categories of economic operators, as well as of contracting authorities or contracting entities and the specific thresholds to which the IPI measure applies and, where appropriate, the percentage values of a score adjustment applicable.

(14) Pursuant to Article 6(6) of the IPI Regulation, the Commission may decide, within the scope of the IPI measure, to restrict the access of economic operators, goods or services originating in a third country to public procurement procedures in the Union by requiring contracting authorities or contracting entities to: either impose a score adjustment on tenders submitted by economic operators originating in that third country; or exclude tenders submitted by such economic operators. In this regard, pursuant to Article 6(9) of the IPI Regulation, when determining the IPI measure based on these two options, the Commission is to opt for the kind of measure that would be proportionate and most effectively remedy the level of impairment of access for Union economic operators, goods or services to the third-country public procurement or concession markets.

(15) In view of the above, it is necessary, first, to identify an IPI measure the scope of which is proportionate to the identified measures and practices, and to select the appropriate form of measure, from the two available options set out in Article 6(6) of the IPI Regulation, that would be proportionate and most effectively remedy the level of impairment of access created by the identified measures and practices; second, to assess the existence of alternative sources of supply should such IPI measure be imposed; and third, to evaluate whether the imposition of that IPI measure would be in the Union interest.

(16) In the investigation report, the Commission presented two essential findings regarding the identified measures and practices.

(17) First, the Commission found that, through such measures and practices, the GOC has put in place an overarching system of generally applicable preferences for the procurement of domestic medical devices which significantly impairs the access of Union operators and Union-made medical devices to the public procurement market of the PRC (7). The central feature of this system is a legally binding obligation imposed on contracting entities to procure domestic medical devices whenever they are in competition with imported ones and constitute a reasonable alternative. The discriminatory nature of this general obligation is strengthened by burdensome approval procedures (8) for the procurement of imported medical devices, which significantly constrain the ability of contracting entities to procure imported medical devices. Furthermore, within this framework, preference is given to imported medical devices that are associated with the transfer of technology to domestic companies (9). The system is further reinforced by sector specific measures (10), which are set in the form of instructions by the GOC to public hospitals to achieve specific domestic procurement targets for several categories of medical devices calling for the full exclusion of imported medical devices in 137 categories. Finally, high-performance medical devices are identified in the Made in China 2025 Strategy (11), resulting in the instruction to county hospitals to reach very high targets for the share of procurement of domestically produced high-end medical devices, i.e. 70 % by 2025 and 95 % by 2030, which would de facto reduce to near zero the scope for access of imported products to a significant part of the Chinese public procurement market.

(18) The Commission has proved that this overarching system of generally applicable preferences for the procurement of domestic medical devices applies in the whole territory of the PRC and affects all medical devices categories.

(19) The Commission has established, through the analysis of a sufficiently representative sample of public procurement procedures in the PRC (12), that 87 % of the public tenders for medical devices contain explicit and/or implicit prohibitions to procure imported medical devices or discriminatory requirements affecting such procurement (13). The examination of those tenders showed that the prohibitions and discriminations apply irrespective of the value of the contract. As established in the staff working document accompanying the investigation report, the fact that the purchase of imported medical devices may be allowed in a tender procedure does not necessarily mean that imported medical devices are not subject to discrimination, for instance through technology transfer requirements (14). Furthermore, even in the cases where the procurement of imported medical devices is authorised, the sectorial targets referred to in recital 17 for domestic procurement create a significant advantage for those suppliers and medical devices originating in the PRC. Therefore, the Commission has established that the overarching system of generally applicable preferences for the procurement of domestic medical devices in the PRC, which consists in laws and implementing measures of general application, affects the entire public procurement market for medical devices in the PRC irrespective of the value of the procurement contract. Thus the Commission concluded in its investigation report that these measures and practices result in a serious and recurrent impairment of access of Union economic operators and Union-made medical devices to the public procurement market for medical devices in the PRC.

(20) Second, the Commission found that the volume-based procurement of medical devices as implemented by the GOC also significantly and recurrently impairs the access of Union operators and Union-made medical devices to the public procurement market of the PRC (15). Indeed, the set-up of this volume-based procurement leads suppliers to submit extremely low bids to meet the selection criteria and win contracts, resulting in significant price reductions, which, in the long run, are unsustainable for profit-oriented companies that cannot rely on State support. The restrictive effect of this volume-based procurement system may be further enhanced by State support to producers with manufacturing and R & D activities in the PRC, particularly when this support is specifically linked to winning volume-based procurement tenders. The investigation report established that ‘the specific set-up of volume-based procurement in the PRC puts imported medical devices and foreign economic operators at a significant disadvantage and leads to de facto discrimination and restriction or even exclusion of foreign operators importing medical devices, as well as imported medical devices competing in these volume-based tenders’ (16) and concluded that ‘the practical set-up of volume-based procurement of medical devices in the PRC significantly and recurrently impairs the access of Union operators and Union-made medical devices to the public procurement market of the PRC within the meaning of Article 2.1(i) of the IPI Regulation’ (17).

(21) The overarching system of generally applicable preferences for the procurement of domestic medical devices in the PRC affects the totality of medical devices originating in the Union without any threshold and irrespective of whether they are offered by Union bidders, domestic bidders or other foreign bidders. In addition, this system contains burdensome approval procedures for the procurement of imported medical devices and the imposition of sector-specific targets for the procurement of medical devices originating in the PRC. As explained in recitals 17 to 19 above, the Commission concluded in its investigation report that the implementation of this system has resulted in a serious and recurrent impairment of access of Union economic operators and Union-made medical devices to the public procurement market for medical devices in the PRC. Indeed, the Commission has established that 87 % of the public tenders for medical devices contain explicit and/or implicit prohibitions to procure imported medical devices or discriminatory requirements affecting such procurement (18), thus leading to the closure of the public procurement market for medical devices in the PRC to a large extent.

(22) Pursuant to Article 6(4) of the IPI Regulation, an IPI measure can only apply to public procurement procedures with an estimated value equal to or above EUR 5 000 000 net of VAT for goods. Therefore, the exclusion of all economic operators originating in the PRC from all Union procurement procedures with a value equal or above EUR 5 000 000 net of VAT concerning all categories of medical devices would be the most comprehensive possible IPI measure that the Commission may adopt in this sector pursuant to the IPI Regulation (19). The Commission examined whether such IPI measure would be proportionate with regard to the identified measures and practices.

(23) According to the data included in Tenders Electronic Daily (‘TED’) (20), with respect to medical devices, procurement procedures with an estimated value equal to or above EUR 5 000 000 net of VAT represent around 59 % of the total Union procurement market of medical devices. In addition, pursuant to Articles 6(8) and 8(1) of the IPI Regulation, any IPI measure could only affect the supply of medical devices originating in the PRC at the maximum level of 50 % of the total value of the contract, irrespective of the origin of the bidder. Moreover, unlike the system implemented by the PRC, an IPI measure, would not require additional restrictive features, such as burdensome approval procedures for the procurement of medical devices from the PRC or the imposition of sector-specific targets for the procurement of medical devices originating in the Union.

(24) Considering all the elements set out in recitals 17 to 23, the scope and potential exclusionary effect of the most comprehensive possible IPI measure in the medical devices sector would in any case be narrower than the scope and established exclusionary effect of the overarching system of generally applicable preferences for the procurement of domestic medical devices put in place by the PRC.

(25) The gap between the effect of the most comprehensive possible IPI measure that may be adopted in this sector pursuant to the IPI Regulation and the effects of the identified measures and practices, are further increased by the restrictive effect of the measures and practices related to volume-based procurement in the PRC. Therefore, it is appropriate to include in the scope of the most comprehensive possible IPI measure also the procurement in the Union of those goods which are subject to volume-based procurement when procured in China.

(26) In view of the above, an IPI measure including in its scope: (i) all Union procurement procedures concerning all categories of medical devices; (ii) organised by all Union contracting authorities and contracting entities; (iii) with a value equal or above EUR 5 000 000 net of VAT (21); and (iv) affecting all economic operators originating in the PRC, can be considered proportionate with regard to the identified measures and practices put in place and implemented by the GOC.

(27) For the purposes of application of any IPI measure, the origin of the economic operators and goods would have to be determined in accordance with Article 3 of the IPI Regulation as further clarified by the Commission in its ‘Guidelines to facilitate the application of the IPI Regulation by contracting authorities and contracting entities and by economic operators’ (‘the Guidelines’) (22). The Guidelines also provide clarifications on the obligations upon successful tenderers.

(28) As set out in recital 14, the two possible forms of an IPI measure are either a score adjustment on tenders submitted by economic operators originating in the PRC or exclusion of tenders submitted by such economic operators.