International Procurement Instrument (IPI)

The International Procurement Instrument (IPI), established by Regulation (EU) 2022/1031, entered into force in August 2022. It is the EU's tool for addressing the asymmetry in global procurement market access: while EU public contracts are largely open to international competition, many non-EU countries maintain barriers (explicit or informal) that prevent European suppliers from competing fairly for their public contracts. The IPI gives the European Commission a mechanism to investigate these barriers and, where they are confirmed, to apply proportionate measures that restrict suppliers from those countries from participating in EU public procurement.

What is the International Procurement Instrument (IPI)?

The IPI operates in three stages:

Investigation. The Commission may open an investigation on its own initiative or following a request from a member state or a representative body of European industry. The investigation examines whether a specific third country imposes measures or practices that substantially restrict EU suppliers from accessing its public procurement markets in a way that is not justified under international agreements.

Consultation. Before applying measures, the Commission must engage in consultations with the third country to seek a negotiated resolution. The investigation and consultation process can take up to 15 months in total.

IPI measures. If the investigation confirms the existence of discriminatory barriers and negotiations fail, the Commission may adopt implementing acts that impose score adjustments or exclusions on tenders from the affected country for specific categories of goods, services, works, or concessions above defined value thresholds. These measures apply across all EU member states and to contracts under Directive 2014/24/EU, Directive 2014/25/EU, and Directive 2014/23/EU.

Scope and thresholds. IPI measures apply only to contracts above defined thresholds (works: EUR 15 million; goods and services: EUR 5 million for central government, EUR 15 million for other authorities; utilities: EUR 25 million). Below these thresholds, contracting authorities retain discretion.

The IPI is a complement to the Foreign Subsidies Regulation: the FSR addresses distortions caused by specific foreign subsidies to individual companies; the IPI addresses systemic market access barriers imposed by third-country governments.

Why it matters for bidders

For European suppliers, the IPI is a potential source of competitive advantage in future EU tenders where the Commission has imposed restrictions on third-country participation. If the Commission applies an IPI measure covering, for example, construction works contracts above EUR 15 million with suppliers from a named country, those suppliers may receive a score penalty or be excluded from competition, improving the relative position of European bidders.

For non-EU suppliers, the IPI represents a legal risk that must be monitored. A company from a country subject to IPI investigation should track the Commission's proceedings and assess whether its bid strategies in large EU contracts may be affected by a forthcoming measure.

Example

A European trade association representing IT services companies files a request with the European Commission, arguing that a major trading partner systematically excludes EU IT suppliers from its government procurement through unlisted technical standards and informal buyer preferences. The Commission opens an IPI investigation, fails to reach a satisfactory negotiated outcome within the prescribed period, and adopts an implementing act applying a 20% score adjustment to bids from that country for EU IT services contracts above EUR 5 million. EU-based IT companies now have a structural scoring advantage in those competitions.

Frequently Asked Questions

Has the IPI been used yet?

As of mid-2025, the European Commission has opened its first IPI investigation, directed at China, covering certain categories of medical devices. This is the first formal use of the instrument since it entered into force in 2022. The outcome will set an important precedent for how the IPI operates in practice.

Does the IPI affect suppliers from countries with which the EU has free trade agreements?

The IPI is designed to work in conjunction with international trade agreements, not to override them. Countries with Government Procurement Agreement (GPA) commitments or bilateral free trade agreement procurement chapters are generally exempt from IPI measures in covered categories. The instrument targets countries where no comparable access commitment exists or where commitments are not being honoured in practice.

Can a contracting authority exempt a specific tender from IPI measures?

The Regulation provides for limited exemptions at the contracting authority level, for example where no suitable tender from non-restricted sources is available or where applying the measure would be contrary to essential security or public interest grounds. These exemptions are narrow and must be notified to the Commission.