EU Limits Chinese Participation in Medical Devices Procurement

Applying the International Procurement Instrument for the first time, the EU has banned People’s Republic of China (PRC)–origin bidders from participating in nearly all high-value EU public procurement procedures for medical devices and placed limitations on the use of PRC-origin subcontractors and medical devices by successful non-PRC bidders in the execution of such procurement contracts. Operators involved in public procurement procedures or in the execution of procurement contracts for medical devices in the EU should assess that impact of this measure on their operations. We explain and evaluate these events below.

1. On what basis did the EU adopt the measure?

Under the International Procurement Instrument (IPI), the European Commission (EC) may investigate a non-EU country’s measures and practices if it considers that they limit EU operators’ access to that country’s public procurement market. The EC can then enter into consultations with the non-EU country to eliminate or remedy those measures. If no satisfactory solution is reached, the EC may impose restrictions on the participation of operators and products from that country in public procurement procedures in the EU.

On June 19, 2025, following a nine-month investigation, the EC adopted Regulation (EU) 2025/1197 restricting access to public procurement procedures in the EU for operators and medical devices originating in the PRC (the IPI Measure). The EC considered that the PRC restricts access to public procurement procedures for all categories of medical devices for EU operators and EU-origin goods. The EC therefore considered it justified to reciprocate and restrict access to the EU public procurement market for PRC-origin operators and medical devices (and related services).

2. Which EU public tenders will be covered?

The IPI Measure excludes operators of PRC origin from all public procurement procedures in the EU (regardless of the EU procurement authority or entity) that (i) concern medical devices under CPV codes 33100000-1 to 33199000-1, (ii) have an estimated value equal to or above €5 million net of value-added tax, and (iii) are launched as of June 30, 2025 (Covered EU Procedures). Public procurement procedures concluded or launched before June 30, 2025, are not affected.

3. Which operators will be affected?

The IPI Measure will affect not only operators based in the PRC but also those outside of the PRC.

Operators of PRC origin: The IPI Measure excludes tenders submitted by operators of PRC origin from Covered EU Procedures.

• PRC persons: These include (i) any natural person holding PRC nationality or permanent residence and (ii) any legal person (entity) established or otherwise organized under PRC law and engaged in substantive business operations in the PRC.
• PRC-controlled entities: Entities established outside the PRC that do not have substantive business operations in their country of establishment may be considered to be of PRC origin if they are under “dominant influence” of PRC persons. Dominant influence is presumed where a person holds the majority of an entity’s subscribed capital, controls a majority of voting rights, or can appoint more than half of the members of the administrative, management, or supervisory body.
• Operators with PRC involvement: A group (e.g., consortium) of natural or legal persons, public entities, or any combination thereof may also be considered to be operators of PRC origin if at least one of their members is a PRC person (or PRC-controlled entity), except if the PRC member’s participation is less than 15% of the value of the tender submitted by the group and its participation is not necessary to fulfill the selection criteria.

Operators of other origin: The IPI Measure will also affect the participation of operators of other origin in Covered EU Procedures. Successful non-PRC bidders are restricted from (1) subcontracting more than 50% of the contract value to PRC-origin operators and (2) supplying (directly or via subcontractors) PRC-origin medical devices (and related services) for more than 50% of the contract value. The origin of medical devices is determined based on the EU non-preferential customs origin rules, and the origin of services is determined by the origin of the provider.

Therefore, prospective bidders with links to the PRC — whether through shareholders, joint tender partners, subcontractors, or PRC-origin medical devices — should map their corporate structure, supply chain, operational footprint, and subcontracting arrangements before tendering in Covered EU Procedures to avoid potential disqualification.

4. Are there exemptions for specific medical devices or operators?

The IPI Measure does not include any operator-specific or product-specific exemptions. It applies to all medical devices falling under CPV code 33100000-1 to 33199000-1; these cover nearly all standard categories of medical devices including general medical equipment, medical consumables, specialized diagnostic, therapeutic, and surgical devices.

However, contracting authorities or entities may, on an exceptional basis, decide not to apply the IPI Measure if only tenders from operators of PRC origin meet the tender requirements or if there are overriding public interest reasons (e.g., public health or environmental protection) justifying such nonapplication.

5. How long will the IPI Measure apply?

The IPI Measure will apply for five years (until June 29, 2030) unless it is withdrawn or suspended before then. The EC may withdraw or suspend the IPI Measure if it considers that the PRC has taken satisfactory corrective actions to eliminate or remedy the impairment of access for EU operators to the PRC public procurement market for medical devices or if the PRC agrees to end the contested procurement measures or practices. The EC may also extend the IPI Measure for an additional five years if, following a review, market conditions in the PRC are deemed to remain impaired.

6. How will compliance be enforced?

Contracting authorities or entities in EU Member States must apply the IPI Measure when evaluating the selection criteria. They may request information or documentation to verify bidders’ origin at any point during the tender process. Failure to provide adequate information, without reasonable explanation, can result in exclusion of bidders from the relevant tender process.

Successful bidders in Covered EU Procedures must provide EU contracting authorities or entities with adequate evidence of their compliance with the subcontracting and supply limitations. Failure to comply with those limitations may result in financial penalties for successful bidders, ranging from 10% to 30% of the total contract value.

Contracting authorities or entities in EU Member States are required to report on the application of the IPI Measure, including cases of noncompliance and imposition of penalties, through the Tenders Electronic Daily system, a system that enables the EC to maintain oversight and consider potential further enforcement measures.

7. Has the PRC taken any steps in response to the EU’s IPI Measure?

 The PRC has reciprocated the restrictions on PRC-origin companies and medical devices set out in the IPI Measure. Effective July 6, 2025, EU operators are excluded from public procurement contracts for medical devices in the PRC of a value above RMB 45 million (approx. USD 6.3 million). In addition, non-EU operators participating in the targeted public procurement procedures are prohibited from supplying medical devices from the EU for more than 50% of the total contract value. Public procurement procedures concluded prior to July 6, 2025 or ongoing at such date should not be affected. These restrictions would also not apply in case only medical devices from the EU can meet the procurement needs.

8. What steps should operators involved in public procurement procedures for medical devices take?

Suppliers of medical devices active in the EU and PRC markets should assess the implications of the IPI Measure and relevant similar by the PRC on their operations and supply chains. In particular, operators involved in public procurement procedures or in the execution of procurement contracts for medical devices in the EU or PRC (as applicable) should start reviewing their ownership and control structures, supply chains, partnerships, and tendering arrangements for any PRC or EU (as applicable) nexus, assessing their exposure to the IPI Measure, and considering possible mitigation strategies. They should also set up effective compliance processes and prepare for potential information requests from EU or PRC (as applicable) contracting authorities or entities.