2.3.1. The rules on nationality and origin
Nationality and origin
The conditions of access to EU external assistance (including EDF) are laid down in the basic acts governing such assistance. When there is no basic act, the eligibility rules are those laid down in Title V of Part I of the Financial Regulations, under articles 119 and 120, as well as in article172 and the Rules of Application of the Financial Regulations.
The corresponding rules on nationality and origin are listed in Annex A2 to this Practical Guide for each basic act.
For each basic act, specific eligibility provisions may apply7. However, in general, participation in the procurement and grant procedures is normally open on equal terms to all natural persons who are nationals of or legal persons established in:
a) a Member State of the European Union;
b) a Member State of the European Economic Area;
c) an official candidate country or potential candidate that is a beneficiary of the Instrument for Pre-Accession Assistance, depending on the basic act;
d) a country that is a direct beneficiary of the aid implemented through the corresponding basic act;
e) a developing country as specified by the OECD Development Assistance Committee referred to in the annex to the instrument, for procurement and grants financed by the EU Budget under a thematic programme; for EDF programmes, all least developed countries as defined by the UN;
f) another third country, according to the derogations stated in the basic act (see point 2.3.2.);
g) another country covered by a European Commission decision establishing reciprocal access to external aid. Reciprocal access in the least developed countries is automatically granted to OECD/DAC members (see the list in Annex A2). For regional programmes which include at least one least developed country, the automatic reciprocal access applies to the whole regional programme.
These procedures are also open to international organisations. For aid channelled through an international organisation or in co-financing with third countries, its rules on nationality and origin may be applied provided that these do not exclude any eligible country according to the applicable EDF/EU basic act(s).
Under EDF, whenever the fund finances an operation implemented as part of a regional initiative, participation in procedures for the awarding of procurement contracts of grants shall be open to all natural and legal persons eligible under EDF, and to all natural and legal persons from a country participating in the relevant initiative. The same rule applies for supplies and materials.
For the purposes of verifying compliance with the nationality rule, the tender dossier and the guidelines for applicants require tenderers and applicants being natural persons to state the country of which they are nationals. For legal persons, the tender dossier and the guidelines for applicants requires that the country in which they are established is stated and evidenced by presenting the documents required under that country's law.
If the Contracting Authority (or Evaluation Committee) suspects that a candidate/tenderer/applicant does not comply with the rules it must ask the candidate/tenderer/applicant to provide evidence demonstrating actual compliance with the applicable rules.
In view to demonstrate their actual compliance with the "establishment" criteria, legal person have to demonstrate that their legal person is formed under the law of an eligible State and
That its real seat is within an eligible State. "real seat" must be understood as the place where managing board and its central administration are located or its principal place of business.
This is to avoid awarding contracts to firms which have formed letter boxcompanies in an eligible country to circumvent the nationality rules.
The decision on whether or not candidates/tenderers/applicants are eligible is taken by the Contracting Authority (usually on the basis of the information and evidence provided during the evaluation).
Experts: Unless otherwise provided for in the basic act and/or the Financing Agreement, natural persons employed or otherwise legally contracted by an eligible contractor or, where applicable, by an eligible subcontractor, may be of any nationality.
Origin of goods
All goods (supplies and materials) purchased under a contract financed under an EU instrument, including the EDF, must originate from the EU or from an eligible country (see above, 'nationality', and below, 'exceptions to the rule on nationality and origin').
All goods to be delivered under a supply contract fall under the rules of origin, as do materials, goods and components to be incorporated or to form part of the permanent works under a works contract (subject to any specific exceptions as stated below).
Considering that the rule of origin applies to all items tendered and supplied, it is not enough if only a certain percentage of the goods tendered and supplied or a certain percentage of the total tender and contract value comply with this requirement.
Goods purchased by the Contractor use during the carrying out of the Contract (such as machinery used by a supply contractor for testing and installing the goods supplied, equipment used by a works contractor for building a road, computer used by a service contractor to draft a study) are not subject to the rule of origin. It is only if the contract explicitly states that at the end of the contract the ownership of the goods is transferred from the contractor to the Contracting Authority (in the case of procurement contracts) or to the designated local beneficiary(ies) or affiliated entity(ies) and/or final recipients of the action (in the case of grant contracts) that these good are subject to the rule of origin.
In a work contract, the option of having equipment vested in the Contracting Authority, given under Article 43.3 of the General Conditions, only applies while the works are being carried out and therefore does not constitute full transfer of the property.
The term 'origin' is defined in the relevant EU legislation on rules of origin for customs purposes: the Customs Code (Council Regulation (EEC) No 2913/92) in particular its Articles 22 to 24 thereof, and the Code's implementing provisions (Commission Regulation (EEC) No 2454/93).
The country of origin is not necessarily the country from which the goods have been shipped and supplied. Two basic concepts are used to determine the origin of goods namely the concept of wholly obtainedproducts and the concept of products having undergone a "last substantial transformation".
If only one country is involved the production, the "wholly obtained" concept will be applied. In practice these goods wholly obtained in a single country shall be regarded as having their origin in that country. This will be restricted to mostly products obtained in their natural state and products derived from wholly obtained products.
If two or more countries are involved in the production of goods it is necessary to determine which of those countries confers origin on the finished goods. For this purpose the concept of "last, substantial transformation" is applied.
When submitting its tender, the tenderer must state expressly that all the goods meet the requirements concerning origin and must state the country(ies) of origin. When tendering for systems comprising more than one item, the origin of each item in the system must be specified. The supplier may be requested to provide documents supporting the stated origin. In this case, the supplier must provide a certificate of origin or additional information considering that the issuing authority may refuse to issue at tendering stage a certificate of origin without presentation of commercial invoices.
The official certificates of origin must, in any case, be submitted before provisional acceptance. Failing this, the Contracting Authority will not make any further payment to the Contractor.
Certificates of origin must be issued by the competent authorities of the goods' or supplier's country of origin (usually the Chamber of Commerce) and comply with the international agreements to which that country is a signatory.
It is the Contracting Authority's obligation to check the existence of a certificate of origin. Where there are serious doubts about the authenticity of a certificate of origin or the information it contains (e.g. because of discrepancies in the document, spelling errors, etc.), the Contracting Authority should contact the issuing authority and request confirmation of the authenticity of the documents submitted and the information it contains. For EDF procurement, supplies originating in the Overseas Countries and Territories are regarded as originating in the EU.