16 June 2025
- Levelling the playing field with respect to trade in medical devices? The EU’s first use of its International Procurement Instrument against China
- Prioritising domestic industry and greater transparency: Indonesia updates its legal framework on Government Procurement
- Ahead of a future bilateral Agreement on Sanitary and Phytosanitary Controls, the UK further delays checks on fresh produce from the EU until 2027
- Recently adopted EU legislation
Levelling the playing field with respect to trade in medical devices? The EU’s first use of its International Procurement Instrument against China
By Stella Nalwoga, Tobias Dolle, and Paolo R. Vergano
On 2 June 2025, EU Member States in the Trade Barriers Committee examined and voted in favour of a Commission Implementing Regulation restricting Chinese companies’ access to the EU’s public procurement market for medical devices. This marks the first measure taken on the basis of the EU’s 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 (hereinafter, International Procurement Instrument, IPI), which aims at promoting “reciprocity in access to international public procurement markets” for EU companies. As a result, Chinese suppliers of medical devices originating from China will face restrictions in accessing EU public tenders.
This article provides an overview of the IPI, including its broader context within the EU’s international commitments, and discusses the EU’s investigation regarding medical devices, its findings, and implications for affected businesses.
Access to Government Procurement markets
Article III:8 of the General Agreement on Tariffs and Trade 1994 and Article XIII of the General Agreement on Trade in Services exclude government procurement from the main multilateral disciplines within the World Trade Organization (hereinafter, WTO). These carve-outs allow WTO Members flexibility to implement laws and policies that favour domestic goods and services in public tenders without adhering to the WTO’s core principles, such as those of non-discrimination and transparency.
At the same time, a number of WTO Members agreed to liberalise their procurement markets by joining the plurilateral WTO Agreement on Government Procurement (hereinafter, WTO GPA). The WTO GPA requires Parties to accord equal treatment to each other’s suppliers and covered goods in public procurement. Currently, 22 WTO Members are party to the GPA, including the 27 EU Member States as one party. China’s negotiations to join the WTO GPA have been ongoing since 2007, but China’s market access offers submitted over the years always failed to satisfy GPA parties’ expectations on reciprocity, notably in terms of thresholds, public entity coverage, services coverage and exclusions. As of mid-2021, China was addressing numerous questions from GPA parties, including the EU to further refine its offer, but no further progress appears to have been made.
The EU’s International Procurement Instrument as a new trade policy tool
While many countries around the world only provide very limited access to their respective public procurement markets, the EU maintains one of the most accessible public procurement markets. EU companies often do not benefit from the same access to public procurement markets in third countries as companies from those countries enjoy in the EU. With the IPI, the EU intends to correct this unbalanced playing field, as the IPI allows the EU to limit the access of third countries to the EU’s public procurement market in case a concerned third country is found to restrict the access of EU businesses to its public procurement market. The IPI only concerns public procurement procedures for goods, services, or concessions for which the EU has not undertaken market access commitments in any international agreement, such as the WTO GPA or under any bilateral or multilateral trade agreement. Where issues regarding public procurement procedures arise with Parties to the WTO GPA, or to applicable trade agreements, the mechanisms built-in those agreements should be used.
Systemic discrimination in China’s procurement market for medical devices
On 24 April 2024, the European Commission (hereinafter, Commission) launched, on its own initiative, an investigation into China’s procurement practices, alleging thatChina’s procurement market for medical devices had “gradually become more closed for European and foreign firms”. On 14 January 2025, the Commission published the findings of the investigation, noting that China unfairly discriminated against European medical devices and related suppliers, and that 87% of the reviewed procurement tenders included “direct and indirect discrimination” through the existence and application of measures and practices related to the ‘Buy China’ policy.
The Commission considers Article 10 of China’s Government Procurement Law as the core of the ‘Buy China’ policy, noting that it “creates a legally binding obligation for contracting entities to procure domestic medical devices instead of imported ones whenever both types of medical devices are in competition and the domestic medical devices constitute a reasonable alternative”. In addition, the Commission notes that China’s “burdensome approval procedures” for the procurement of imported goods reinforced the discriminatory nature of the ‘Buy China’ policy. The procedural rules, inter alia, require the procuring entity to “obtain the proposal of the financial department” and to “carry out a public consultation of applications for approval of the procurement of imported goods with a view to identifying domestic substitutes and objections from domestic manufacturers”.
As provided for under the IPI, the Commission engaged in consultations with the Government of China, which acknowledged the discriminatory measures, but maintained that it was not bound by international commitments. China proposed resolving the issue through its future WTO GPA accession or a bilateral agreement. The Commission rejected these proposals, stressing that the aim of the investigation was to achieve reciprocity by removing discriminatory barriers.
The IPI measure restricting access to the EU’s public procurement market
Following the endorsement by EU Member States in the Trade Barriers Committee, the Commission will now adopt the Commission Implementing Regulation setting out the IPI measure. At this stage, the text of the legal act has not yet been made public. According to Article 6 of the IPI Regulation, an IPI measure may require contracting authorities or contracting entities in the EU to restrict access of economic operators, goods, or services from a third country to public procurement procedures, either by: 1) Imposing “a score adjustment on tenders submitted by economic operators originating in that third country” (i.e., “the relative diminution by a given percentage of the score of a tender”); or 2) Excluding “tenders submitted by economic operators originating in that third country”.
The IPI measure will take effect ten days after its publication and apply only to new tenders. Additionally, the IPI measure will apply across all contracting authorities in the EU, and enforcement will rest with the contracting bodies, which must verify the origin of bidders and the medical devices. In terms of scope, IPI measures only apply to public procurement procedures “with an estimated value above a threshold to be determined by the Commission”, which should be equal to or above “EUR 15 000 000 net of VAT for works and concessions, and equal to or above EUR 5 000 000 net of VAT for goods and services”.
Reactions to the EU’s decision
The IPI measure against Chinese suppliers’ access to the EU’s public procurement market for medical devices would lead to immediate and significant market access ramifications. This first-ever application of the IPI has triggered reactions from trade associations both in the EU and in China. On 2 June 2025, the China Chamber of Commerce to the EU (CCCEU), representing Chinese businesses operating within the EU, voiced “serious concerns” about the decision, emphasising that European medical device companies had long “enjoyed substantial access” to the Chinese market and warned that the EU’s action would introduce “new complexity” to China-EU trade relations. On 4 June 2025, the European Chamber of Commerce in China, representing European businesses operating in China, responded with a more measured endorsement, expressing support for the EU’s decision while also calling for “a negotiated solution”.
Towards a more assertive EU trade policy?
The EU’s IPI can become an important EU trade policy tool. By targeting China’s systemic discrimination in the medical devices sector, the EU signals a more assertive approach to reciprocity in government procurement, one that is no longer solely reliant on diplomacy or stalled negotiations. Interested parties should closely follow the forthcoming implementing act to further assess the implications of the IPI measure to be adopted.
For any additional information or legal advice on this matter, please contact Paolo R. Vergano
Prioritising domestic industry and greater transparency: Indonesia updates its legal framework on Government Procurement
By Joanna Christy, Caitlynn Nadya, and Paolo R. Vergano
On 30 April 2025, the Government of Indonesia issued Presidential Regulation No. 46 of 2025 on Government Procurement (hereinafter, PR No. 46 of 2025), which directly entered into force. PR No. 46 of 2025 is the second amendment to Presidential Regulation No. 16 of 2018 and seeks to enhance the implementation of electronic procurement systems, while reinforcing the prioritisation of domestically produced goods and services in public procurement. PR No. 46 of 2025 introduces, inter alia, provisions on the use of electronic purchasing via the Electronic Catalogue and the imposition of a 25% Local Content Requirement (hereinafter, LCR) for the procurement of goods and services.
This article discusses the key provisions of PR No. 46 of 2025, considers its relevance in light of the EU’s International Procurement Instrument (IPI, see article above), and assesses its commercial implications.
Indonesia’s legal framework on Government Procurement
Presidential Regulation No. 16 of 2018, as amended by Presidential Regulation No. 12 of 2021, governs the procurement process of goods and services by public institutions. Indonesia’s framework for government procurement employs various methods, depending on the contract value, type, and nature of the procurement. Procurement can occur via the electronic catalogue (hereinafter, e-catalogue), which is an electronic procurement platform that is managed and overseen by Indonesia’s National Public Procurement Agency. The e-catalogue operates like an online marketplace, enabling government institutions to compare and make direct and transparent purchases of goods and services from pre-approved suppliers, and based on listed specifications, prices, and other relevant information. Importantly, the e-catalogue does not list all goods and services available on the market, but only those most commonly required by Ministries and other Government entities and, until now, had been limited to goods.
PR No. 46 of 2025 aims at enhancing the utilisation of electronic procurement and at prioritising the procurement of domestically produced goods and services. PR No. 46 of 2025 introduces the following key changes: 1) Expanding the scope of e-purchasing; 2) Prioritising LCRs in public procurement; and 3) Advancing national development through international procurement requirements.
Broader use of electronic procurement
Article 50(5) of PR No. 46 of 2025 strengthens the role of e-purchasing through the e-catalogue. Government institutions are now required to use e-purchasing whenever the required goods or services are available in the e-catalogue. Previously, e-purchasing was only mandatory for procurements deemed to be of national importance by the relevant authorities, such as for essential medical supplies. Article 41 of PR No. 46 of 2025 broadens the scope of e-purchasing to include consultancy services, which were previously excluded.
The requirement to use the e-catalogue should mitigate the risk of non-transparent practices, such as direct appointments based on personal relationships or illicit commissions, by making supplier information, product listings, and pricing publicly accessible. This transparency should allow stakeholders to scrutinise procurement decisions and compare available options, reducing opportunities for collusion between officials and preferred vendors. In turn, the e-catalogue ensures equal access for all registered domestic and foreign businesses to compete fairly in public procurement procedures.
Prioritisation of domestic products in procurement
While domestic prioritisation in procurement was already in place, Article 66 of PR No. 46 of 2025 strengthens this policy by introducing a four-tiered prioritisation system that requires domestic options to be considered first:
- Procuring entities must first prioritise products with a minimum LCR of 25% and a combined LCR and enterprise benefit score, which refers to the broader economic value of companies that invest and produce in Indonesia, of at least 40%;
- If products meeting the first-tier criteria are unavailable or insufficient in quantity to be procured, procuring entities must use domestic products with a minimum LCR of 25%, even if they do not meet the combined LCR and enterprise benefit score of 40%;
- Third, if no suitable products exist under the first two tiers, procuring entities may turn to domestic products with an LCR of less than 25%; and
- When the conditions in all three tiers cannot be met, the procuring entities are required to use other domestic products listed in Indonesia’s National Industrial Information System, a centralised database of nationally registered industrial products, even if the products are not available on the e-catalogue.
This system imposes significant restrictions on foreign suppliers, as procuring entities must exhaust all four tiers of domestic product options, including those with lower LCR, before resorting to imported alternatives, effectively limiting foreign participation in Indonesia’s public procurement.
To further prioritise domestic products and Indonesia’s national development objectives, Article 63 of PR No. 46 of 2025 provides that contracts that do involve foreign goods or services must include provisions that benefit the local economy and workforce, such as the transfer of technology or knowledge to Indonesian stakeholders. Therefore, foreign businesses seeking to compete in Indonesia’s public procurement market should prepare for increased localisation demands, such as partnering with local stakeholders, adopting localisation strategies, or investing in domestic production to ensure compliance and maintain competitiveness.
Balancing domestic preference with Indonesia’s international trade commitments
Article III:8(a) of the WTO General Agreement on Tariffs and Trade 1994 (GATT) exempts government procurement from the national treatment principle for imported goods and services. This allows Indonesia to favour domestic products or suppliers in public procurement without breaching the WTO’s non-discrimination principle. Indonesia did not join the plurilateral WTO Agreement on Government Procurement under which 49 WTO Members, including the 27 EU Member States, committed to grant equal treatment to each other’s suppliers in covered procurement.
While Indonesia retains the flexibility to restrict foreign access to its procurement market, excessive limitations may trigger concerns from trading partners and expose it to retaliatory measures. For example, the EU’s IPI enables the European Commission to investigate alleged discriminatory or restrictive foreign procurement measures that hinder EU companies’ access to non-EU procurement markets and, if necessary, impose retaliatory rebalancing measures, such as exclusions from EU tendering procedures.
Commercial implications
The four-tiered prioritisation system, in view of the local content requirements, can benefit domestic industry, but can also strongly discriminate against foreign competition. Striking a balance between promoting domestic industry and maintaining open, fair competition will be key to ensuring Indonesia’s policies remain credible and compatible with its broader trade objectives. In an increasingly assertive international trading environment, Indonesia’s move is, at best, ill-timed and it will likely attract unwanted attention and possible retaliatory measures by third countries.
For any additional information or legal advice on this matter, please contact Paolo R. Vergano
Ahead of a future bilateral Agreement on Sanitary and Phytosanitary Controls, the UK further delays checks on fresh produce from the EU until 2027
By Amanda Carlota, Ignacio Carreño García, and Tobias Dolle
On 2 June 2025, the Government of the UK announced that it would further delay until 31 January 2027 its border checks on “medium-risk” fruit and vegetables imported from the EU. The UK intends to “ease trade” ahead of an anticipated bilateral Agreement on Sanitary and Phytosanitary Controls (hereinafter, EU-UK SPS Agreement), which the European Commission (hereinafter, Commission) and the UK had agreed to negotiate during the EU-UK Summit held on 19 May 2025.
This article provides an overview of the UK’s framework on border checks, including on fruits and vegetables, and assesses the different areas that would be covered by the EU-UK SPS Agreement.
The new relationship between the EU and the UK
As of 2021, the Trade and Cooperation Agreement between the EU and the UK of Great Britain and Northern Ireland (hereinafter, the EU-UK TCA) provides the terms for the relationship between the EU and the UK, following the latter’s withdrawal from the EU. Since then, both parties committed to work together and agreed on future cooperation in various pending areas to fill the remaining gaps left by ‘Brexit’. Chapter 3 of the EU-UK TCA provides for a general framework on sanitary and phytosanitary (hereinafter, SPS) measures with the following objectives, inter alia: 1) Protect human, animal and plant life or health in the territories of the Parties while facilitating trade between the Parties; 2) Further the implementation of the World Trade Organization’s SPS Agreement; 3) Ensure that the Parties’ SPS measures do not create unnecessary barriers to trade; and 4) Promote greater transparency and understanding on the application of each Party’s SPS measures.
The EU-UK TCA is the main agreement that governs the relationship between the EU and the UK. Northern Ireland is subject to a separate arrangement under the Northern Ireland Protocol (NIP), under which Northern Ireland remains aligned with certain EU rules for goods, particularly food, animals, and plant products to avoid a “hard border” between Northern Ireland and the Republic of Ireland as an EU Member State. The NIP was modified on 23 February 2023 by the Windsor Political Declaration, which intends to provide mutually acceptable solutions to some of the issues caused by the UK’s withdrawal from the EU. With respect to Gibraltar, the UK and the EU agreed to negotiate a separate treaty for Gibraltar’s future relationship with the EU and to avoid a hard border between Gibraltar and Spain. On 11 June 2025, the EU, the UK, Spain, and Gibraltar reached a political agreement, which still needs to be ratified.
Changes to the rules and border controls
Since 31 January 2020, trade from the EU has been seen in the UK as trade from a third country. In August 2023, the UK Government published the Border Target Operating Model (BTOM) Guidance, which sets out the UK’s new approach to safety and security controls that apply to all imports, and the new SPS controls that apply to imports of live animals, germinal products, animal products, plants and plant products.
With respect to imports of fruits and vegetables, the BTOM foresees a different intensity of controls, in line with the BTOM risk categorisations of “high risk”, “medium risk A”, “medium risk B”, and “low risk”, based on an assessment of the plant health risk. “High risk” and “medium risk A” goods require a phytosanitary certificate and pre-notification to be made. “Medium risk B” goods require a phytosanitary certificate but will not need to be pre-notified. “Low risk” goods do not require a phytosanitary certificate or pre-notification to be made. Risk categorisations may change over time.
The UK introduced the BTOM in three stages throughout 2024 and 2025. Since 31 January 2024, the first step for exporters is to obtain a health certificate for the shipment of animal, plant, and plant-based products to the UK. Since 30 April 2024, UK Customs also physically checks these animal, plant, and plant-based products at the Border Control Posts (BCPs). The final step came into effect on 31 January 2025, and a Safety and Security Declaration to UK Customs is now needed for all import shipments from the EU.
In September 2024, the UK Government announced that part of this final phase had been postponed and that the planned new controls on “medium-risk” fruit and vegetables, which include tomatoes, grapes, plums, cherries, peaches, peppers, and more, would be temporarily eased. The UK also re-categorised seven commodity groups, including apples and pears, in the BTOM risk categorisations from “medium risk” to “low risk”, which means that these goods can move freely between the EU and the UK.
The post-‘Brexit’ SPS border checks on “medium-risk” fruit and vegetables from the EU were yet to be introduced and have been repeatedly delayed amid concerns about the disruptions that they would cause to supply chains. Initially set to expire on 1 July 2025, the UK has now extended the easement of checks until 31 January 2027 to give both sides sufficient time to negotiate the details of the EU-UK SPS Agreement.
Practical considerations of the delay and some criticism
According to the Fresh Produce Consortium (FPC), the UK’s trade association for fresh produce, the delay means that around 700,000 consignments annually will avoid SPS checks under the UK’s BTOM, which were originally scheduled to take effect on 1 July 2025. This reprieve is expected to avoid approximately GBP 200 million in additional annual costs across the supply chain, likely also offering cost relief to consumers. According to the FPC, this exemption is sector-specific and will help maintain stability within the UK fresh produce industry, which includes supermarket supply chains, wholesalers, and foodservice providers. Without the delay, businesses would have faced operational challenges and added expenses associated with compliance.
At the same time, the National Farmers’ Union (NFU), which represents farming and growing businesses within England and Wales, criticised the UK Government’s decision to extend the easement on EU fruit and vegetable import checks, warning that it failed to support domestic horticulture and prolonged unfair trading conditions, highlighting that UK growers continued to face full checks when exporting to the EU, while EU producers remained exempt.
Agreement to work on an EU-UK SPS Agreement and “dynamic alignment”
One of the outputs of the May 2025 EU-United Kingdom Summit is a Common Understanding between the European Commission and the UK, which identifies five broad areas of future work to strengthen EU-UK relations, including ‘Strengthening our economies while protecting our planet and its resources’. The EU-UK SPS Agreement falls under this area of future work and the European Commission and the UK agreed to work towards an agreement, “which should ensure the application of the same rules at all times by providing for timely dynamic alignment of the rules applicable to and in the UK acting in respect of Great Britain”, covering England, Scotland and Wales (leaving out Northern Ireland) “with all the relevant European Union rules, giving due regard to the UK’s constitutional and parliamentary procedures”.
Under the future SPS Agreement, the vast majority of movements of animals, animal products, plants, and plant products between Great Britain and the EU could be undertaken without SPS checks and the need for safety/quality certificates. The Agreement would require that the UK “dynamically aligns to the relevant EU rules”. The “dynamic alignment” may mean that the UK will need to follow EU rules, even as they evolve. However, there are currently no details on how this would be implemented.
The Common Understanding notes that “the SPS Agreement should include a short list of limited exceptions to dynamic alignment”, but also indicates that an “exception could only be agreed if: (i) it does not lead to lower standards as compared to European Union rules, (ii) it does not negatively affect European Union animals and goods being placed on the market in the United Kingdom in respect of Great Britain, and (iii) it respects the principle that only animals and goods compliant with European Union rules move into the European Union”.
Outlook
The UK Government’s decision of 2 June 2025 to delay until 31 January 2027 the border checks on fruit and vegetables categorised as “medium-risk” imported from the EU would allow more time for the UK and the EU to continue negotiations towards an SPS Agreement. While EU “medium-risk” exports of fresh fruit and vegetables continue to be temporarily exempt from UK border checks, other sectors, such as meat, dairy, fish, plants, and flowers, remain subject to full checks.
As formal negotiations between the UK and EU on the EU-UK SPS Agreement have yet to be launched, interested businesses and stakeholders should follow the discussions, consider taking a proactive role, and raise their commercial priorities with policymakers in both the UK and the EU.
Within the international trade context, there is also a need to understand whether the future EU-UK SPS Agreement would be a part of the EU-UK TCA and would, therefore, be in compliance with the non-discrimination principle of the World Trade Organization (hereinafter, WTO), or whether the treatment accorded to their respective products by the two trading partners could be seen as discriminatory, if not also offered to other WTO Members that have similar or identical SPS regimes and conditions of safety.
For any additional information or legal advice on this matter, please contact Ignacio Carreño Garcia
Recently adopted EU legislation
Market Access
Trade Remedies
Food Law
Amanda Carlota, Ignacio Carreño García, Tobias Dolle, Joanna Christry, Caitlynn Nadya, Stella Nalwoga, and Paolo R. Vergano contributed to this issue.
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