Self-cleaning –
the AUT example and
regulator’s issues
Dr. Michael Fruhmann
PPN Conference, 1. and 2. Juli Rome
© Michael Fruhmann 2010
preliminary remarks
• AUT Statement for Council minutes regarding 2004/18/EC
and 2009/81/EC: “Austria considers that the conditions
which, under the second subparagraph of Article 46 (1),
the Member States are to specify, in accordance with their
national law and having regard for Community law, for the
purpose of implementing Article 46 (1), may include the
conditions whereby an economic operator may prove that
he has put a stop to the situation which gave rise to such a
conviction. If an economic operator so proves, the
contracting authority is not obliged to exclude him as a
candidate or tenderer.”
© Michael Fruhmann 2010
AUT system
AUT regulatory approach to Art. 45:
• Constitutional requirement: “conviction of a
person/company may not lead to the
exclusion for an undetermined time nor
would it be admissible to exclude
persons/companies without giving them the
possibility to prove their reliability”
© Michael Fruhmann 2010
Self cleaning in AUT PP Law
AUT approach to Art. 45 – national level:
• all reasons listed in Art. 45 of 2004/18/EC lead to
mandatory exclusion
• derogation from exclusion for overriding reasons
in the general interest possible (but very restrictive
interpretation)
• self-cleaning possible and mandatory (CA has to
consider the arguments)
• decision on case-by-case basis by CA
© Michael Fruhmann 2010
AUT basic procedural features
• CA decides (exclusion and selfcleaning) on a case by case basis (not
for a given time!)
• system “covers” natural and legal
persons
© Michael Fruhmann 2010
AUT basic procedural features II
AUT system of self cleaning § 73 FPA:
• if CA becomes aware of reasons to exclude a
company FPA requires company be provided
opportunity to present evidence that all necessary
measures have been taken that situation which has
led to conviction will not occur again (to prevent
exclusion)
• up to company to provide information
• all evidence must be taken into account by CA
• decision of CA, if it deems evidence is sufficient
© Michael Fruhmann 2010
Exclusion + self-cleaning in EU Law
Exclusion: see Art. 7 (1) b 2009/52/EC (Dir.
on minimum standards on sanctions and
measures against employers of illegally
staying third-country nationals) „exclusion
for up to 5 years”
Self-cleaning: see Art. 133a (1) of Regulation
implementing Financial Regulation for
General Budget
© Michael Fruhmann 2010
Self-cleaning and general legal
requirements
Mechanisms of self-cleaning must conform to
basic legal principles/concepts namely:
•
•
•
•
Proportionality
Fair trial
Equal treatment
(new) Fundamental Rights: Freedom to
conduct a business, Right to property
© Michael Fruhmann 2010
Self-cleaning
Regulator’s issues (most important, not exhaustive):
• Personal scope of self-cleaning?
• What “triggers” self-cleaning mechanism?
• Exclusion for a given time or on a case-by-case
basis?
• Exclusion with/without additional punitive
element (general/specific prevention)?
• Limitation of arguments/possibilities for selfcleaning?
• Who decides on the basis of which criteria about
exclusion?
© Michael Fruhmann 2010
Personal scope of self-cleaning
mechanism – criminal liability?
2 basic possibilities:
1. only natural persons
2. natural and legal persons
if 2 is chosen: question how to deal with
mergers/demergers, Art. 50 Charta (“Right not to
be tried or punished twice in criminal
proceedings for the same criminal offence” esp.
in EU context - different MS), same offense –
“double” measures obligatory (company and
management)?
© Michael Fruhmann 2010
What triggers self-cleaning
mechanism?
2 basic possibilities as precondition:
1. conviction by (final) judgement
(procedural issues: court/tribunal, Art. 6
ECHR – civil/criminal issue) and/or
2. “proof” by CA: “quality” of proof
(suspicion enough)? – by any means/to the
satisfaction of CA?)
© Michael Fruhmann 2010
What triggers self-cleaning
mechanism?
Should be “and” because mechanism
should apply to both possibilities of
exclusion!
“proof” – must be evidence based;
suspicion as such not sufficient (see ECJ
in C-213/07, Michaniki)
© Michael Fruhmann 2010
What triggers self-cleaning
mechanism?
 According to regulators choice: “plea
bargaining” will be treated differently!
no conviction (see BAE, Daimler) but
maybe “proof” for misbehaviour (e.g.
official statements, witness, protocols,
money transactions …)
© Michael Fruhmann 2010
What triggers self-cleaning
mechanism?
 Follow-up: “who decides” on the exclusion?
•
•
•
(theoretically) law itself (issue: remedies
“against” the law?)
judge (together with judgement concerning
offence; link to specific procurement
procedure?)
CA (following a judgement or on its own)
© Michael Fruhmann 2010
Exclusion for a given time or on a
case-by-case basis?
Regulator’s issues - time limit :
• fixed (one general time limit for all cases): not
permissible (proportionality problem)
• (range) min. – max.: possible but must vary
according to the ground for excl. in question
because time limit must be proportionate – see
ECJ + Art. 49 Charta “proportionality” of
punishment? (“Severity of penalties must not be
disproportionate to the criminal offence”)
© Michael Fruhmann 2010
Exclusion for a given time or on a
case-by-case basis? II
Regulator’s issues - time limit :
• set in advance (by law, …), for ex. lists with
duration for specific excl. grounds (poss.
problem proportionality) or
• set by judge/CA on a case by case basis
(poss. problem of equal treatment – same
duration for same offense)
© Michael Fruhmann 2010
Exclusion with/without additional
punitive element?
Regulator’s issues:
• if (additional) punitive element (for
general/specific preventive reasons) is
introduced, Art. 49 Charta must be taken
into consideration (“proportionality” of
punishment; “Severity of penalties must not
be disproportionate to the criminal
offence”)
© Michael Fruhmann 2010
Limitation of measures?
A priori exclusion/prohibition of certain selfcleaning measures (or of self-cleaning
mechanism as such)?
not possible! – principle of proportionality,
Art. 47 Charta (“Right to an effective
remedy”), Art. 48 (“Right of defence”), ECJ
C-455/08 (“guarantee of effective review”)
© Michael Fruhmann 2010
Who decides on the basis of which
criteria about exclusion?
2 basic options possible:
• decision taken by judge or CA
decision must be open to review: Remedies
Directive 89/665/EEC + 92/13/EC and Art. 47
Charta “Right to an effective remedy and to a fair
trial” ( “Everyone whose rights and freedoms
guaranteed by the law of the Union are violated
has the right to an effective remedy before a
tribunal …”
 all arguments put forward must be taken into
consideration
© Michael Fruhmann 2010
Self-cleaning in EU/international
context
Problems:
• “mutual recognition” of (accepted) self
cleaning measures taken in another MS
• different regimes/standards (for ex.: liability
of legal persons)
• cross border access to data + comparable
data (contents of judicial records vary)
© Michael Fruhmann 2010
Self-cleaning in EU/international
context
Possible solutions:
• eCERTIS (testing phase)
• VCD – virtual company dossier (future)
© Michael Fruhmann 2010
Thank you for your attention!
Contact: Dr. Michael Fruhmann, Federal Chancellery,
Constitutional Service, Republic of Austria
michael.fruhmann@bka.gv.at
© Michael Fruhmann 2010