On 25 March 2021 the Federal Cartel Office (FCO) began operating the competition register.(1) Public bodies such as notifying authorities or public contracting entities can now register.
The nationwide fully digital competition register provides public contracting authorities, sector contracting authorities and concession awarding authorities with electronically retrievable information relevant to procurement procedures, enabling contracting authorities to check whether a company must be excluded from procurement procedures due to economic crimes that it has committed. The FCO will maintain the competition register.
FCO President Andreas Mundt stated that:
[t]he Competition Register is the first fully digitised state register in Germany. Authorities reporting offences committed by companies will do so exclusively in a digital form. More than 30,000 contracting entities in Germany will obtain information by digital means only. This makes the Competition Register an important and progressive component in the digitalisation of public administration. In view of the sensitive data relating to serious economic offences committed by companies, which are stored centrally in the register, data security is a top priority. By consulting the Competition Register, public contracting entities will in the future be able to find out which companies must or can be excluded from the procurement procedure on account of their serious infringements. We will now start registering the authorities with which we work together. These are, on the one hand, the bodies informing us of the offences committed by companies, such as public prosecution offices or customs and excise authorities, and, on the other hand, approximately 30,000 public bodies awarding contracts and concessions in Germany.
The Act on the Establishment and Operation of a Register for the Protection of Competition for Public Contracts and Concessions (WRegG), which entered into force on 29 July 2017 and was amended in certain respects by the 10th amendment to the Competition Act, which entered into force on 19 January 2021, required the FCO as the register authority to establish a competition register. The reason for this is that under current public procurement law (Sections 123 and 124 of the Competition Act), companies can be excluded from the award of public contracts and concessions if they have committed economic crimes or similar legal violations. This is because such companies should not benefit from public contracts and concessions. The competition register enables contracting authorities to check nationwide, by means of a single electronic query, whether a company has committed relevant legal violations and whether there are grounds for exclusion from public procurement procedures.
Crimes or misdemeanours subject to registration
The WRegG regulates the criminal and administrative offences leading to the entry of companies in the competition register conclusively (Section 2). On the one hand, final convictions, penalty orders and final decisions imposing fines must be registered for the offences which, pursuant to Sections 123(1) and 123(4) of the Competition Act, lead to mandatory exclusion from the award procedure. In particular, these include:
- bribery;
- human trafficking;
- the formation of criminal organisations;
- the financing of terrorism;
- money laundering;
- the withholding of social security contributions; and
- tax evasion.
On the other hand, optional grounds for exclusion pursuant to Section 124 of the Competition Act (eg, violations of antitrust law and certain labour law provisions) will be registered, which the contracting authorities previously had to query in the central business register. After the expiry of certain periods (three or five years), registered companies must be deleted from the register. Moreover, registered companies can apply for early deletion from the register after a so-called 'self-cleaning'.
The FCO expects the registration of approximately 30,000 contracting authorities. Therefore, the FCO will contact the respective contracting authorities regarding registration in a step-by-step manner, starting with all supreme federal authorities and contracting authorities that can register with immediate effect, followed by supreme state authorities and contracting authorities that can register from 12 April 2021 and finally contracting authorities of federal states, in particular at the municipality level, which can register from May 2021.
In the future, the competition register will make it easier for contracting authorities to query whether a company must be excluded from the public procurement procedure due to economic offences or other significant criminal offences. Therefore, the contracting authorities are no longer dependent on the information provided by the companies concerned. Thus, the competition register ensures greater compliance among companies and serves to combat economic crime. Conversely, affected companies are trained with regard to their rights and options (eg, an early deletion from the register after 'self-cleaning'). As a result, companies' implementation of effective compliance systems has gained renewed importance, not only against the backdrop of the Corporate Sanctions Act and the changes introduced by the 10th amendment to the Competition Act, but also with regard to public procurement law.
Endnotes
(1) For further information please see the FCO's press release of 25 March 2021.
