The rules of nationality and origin

✔ Basing on the rule of nationality, participation is open on equal terms to all natural and legal persons effectively established in a country mentioned as eligible by the relevant regulation applicable. To confirm compliance with the rule, natural persons must state the country of which they are nationals and legal persons to demonstrate that their legal persons that they are formed under the law of an eligible State and their real seat is within an eligible State
✔ Basing on the rule of origin, proof of origin of the goods, works and service must be provided (certificate of origin) if the basic act or the other instrument foresees so

THE RULE OF NATIONALITY

Participation in tender process managed by the Beneficiary(ies) is open on equal terms to all natural and legal persons effectively established in a Member State or a country, territory or region mentioned as eligible by the relevant regulation / basic act governing the eligibility rules for the grant (as per Annexes a2a to Annex a2c of the PRAG).
Tenderers must state their nationality in the tenders and provide the usual proof of nationality under their legislation.

This rule does not apply to the experts proposed under service tenders financed by the grant.

All supplies purchased under a procurement contract, or in accordance with a grant agreement, shall originate from an eligible country as detailed defined in the II point“eligible countries per Instrument”Annex A2a of the PRAG.
However when the value of the supplies to be purchased is below 100 000 euros per purchase, the supplies do not have to originate from an eligible country (full untying).
This general derogation to the rule of origin is applicable in case in which:

  • the tender procedures for which the budget envisaged is below 100 000 euros. In this case the contract notice will have to indicate that the tender procedure benefit from the derogation.In addition, if the procurement procedure is to be divided into lots, this applies per lot.
  • a grant or works contract for an amount equal or above 100 000 euros.

The rules of nationality and the general derogation expressed in Annex A2a of the PRAG are applicable for funded programmes of both the EU budget and the EDF.

For the purposes of verifying compliance with the nationality rule, the tender dossier requires tenderers being natural persons to state the country of which they are nationals.
For legal persons, the tender dossier requires that the country in which they are established is stated and evidenced by presenting the documents required under the country’s law, which demonstrate that their legal person is formed under the law of an eligible State and their real seat is within an eligible State. (‘real seat’ is the place where its managing board and central administration are located, or where there is its principle place of business). 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.

THE RULE OF ORIGIN

Besides its nationality, the tenderer must prove the origin of the supplies provided under a grant. Where rules of origin need to be respected, contractors must present proof of origin to the Beneficiary(ies) at the latest when the first invoice is presented. 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.

In general, all supplies purchased under a contract financed under the EU budget or the EDF shall originate from an eligible country as per corresponding Instrument. Exceptions are however foreseen (see PRAG, section 2).

COUNTRY OF ORIGIN
The country of origin is not necessarily the country from which the goods have been shipped and supplied. So, the country of production is not necessarily the country of origin. Two main concepts are used to determine the origin of goods, namely the concept of ‘wholly obtained’ products and the concept of products having undergone a ‘last substantial transformation’.
Where there is only one country of production, the origin of the finished product is easily established (it is the case of the ‘wholly obtained’ products). 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 (it is the case of the ‘last substantial transformation). 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 PROOF
The supplier must certify that the goods tendered comply with the origin requirement and must state 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 documents supporting the stated origin.
The certificate of origin must be made out by the competent authorities of the country of origin of ‘goods’ or supplier’s country of origin (usually the Chamber of Commerce) and complying with the international agreements to which that country is signatory.
It is the contracting authority’s obligation to check the existence of a certificate of origin.

Resources and useful links:
PRAG
Annex a2a
Annex a2b1
Annex a2b2
Annex a2c


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