Sweden’s application of the IPI measure in relation to Chinese medical devices: almost one year on

In June 2025, we reported on the European Commission’s decision to restrict Chinese participation in EU public procurement for medical devices under the International Public Procurement Instrument (see here). The implementing regulation, Commission Implementing Regulation (EU) 2025/1197, entered into force on 30 June 2025, marking the first application of the IPI. Almost one year on, we summarise how the measure has been applied in Sweden and where questions remain.

Recap of the IPI measure

By way of a brief recap, the IPI Regulation imposes two distinct obligations on EU public procurement procedures for medical devices with an estimated value of at least EUR 5 million. First, contracting authorities are required to exclude tenders submitted by economic operators of Chinese origin. Second, a successful tenderer must ensure that goods of Chinese origin do not account for more than 50 per cent of the total value of the contract during its performance, regardless of whether the goods are supplied by the tenderer itself or by subcontractors.

The first obligation applies at the tender evaluation stage, with tenderers that do not meet this requirement being excluded from the procurement process. The second obligation applies during contract performance, and when the successful tenderer fails to comply with the requirement, the contracting authority may impose a proportionate charge of between 10 and 30 per cent of the total contract value.

Limited Swedish guidance

In our experience, Swedish contracting authorities generally adhere closely to the wording of the IPI Regulation (EU) 2022/1031 and Commission Implementing Regulation (EU) 2025/1197. This is consistent with the IPI Regulation’s requirement that contracting authorities include a reference to the relevant obligations in the procurement documents for procedures to which an IPI measure applies. That said, practices have varied. There have been instances in which contracting authorities have stipulated that they will impose substantial charges in the event of violations, while in other cases authorities have charged a flat rate of 10 per cent.

Case law on the IPI measure remains limited. One notable example is nonetheless a judgment from the Administrative Court in Gothenburg in January 2026 (case number 14251-25), in which the applicant argued that the procurement documents failed to incorporate the requirements of the IPI Regulation and that competing tenders should have been excluded on account of their reliance on products of Chinese origin. The contracting authority in turn argued that the procurement had been initiated before the implementing regulation entered into force on 30 June 2025, relying on the fact that it had publicly invited suppliers to a hearing in November 2024 and had taken a formal political decision on the procurement on 23 June 2025.

The court agreed with the contracting authority, holding that the procurement had been initiated before 30 June 2025 and therefore fell outside the scope of the IPI measure. The decisive factor was that the contracting authority had made external contact in the form of public announcements for procurement purposes before the regulation entered into force.

There is also a case pending before the Administrative Court in Linköping (case number 2997-26), in which a tenderer was excluded on the basis that more than 50 per cent of the value of the products offered in their tender originated in China. The case is expected to provide guidance on how the EUR 5 million threshold is to be calculated in situations in which several framework agreements are concluded based on a single procurement process, in particular whether the value of each framework agreement should be assessed individually or whether the values of framework agreements concerning similar goods should be aggregated.

It may also be noted that a separate issue arises from the two cases pertaining to whether the contracting authority has a legal basis under the IPI Regulation to exclude a tender at the evaluation stage on the grounds that the value of the products offered (will) exceed the 50 per cent threshold. The exclusion obligation under the IPI Regulation is directed at economic operators originating in the third country concerned, whereas the 50 per cent threshold is framed as an obligation that successful tenderers must comply with during contract performance, with a proportionate charge as the corresponding sanction. Notably, whether these two regimes can be combined to permit proactive exclusion at the tender stage on the basis of the product-origin threshold has not (yet) been addressed in any of the proceedings.

In Sweden, guidance also remains limited on how the obligation to impose a charge is to be applied and how a charge is to be assessed in a given case. Several practical questions remain unresolved. The Commission’s guidelines state that the actual amount of the charge must be established on a case-by-case basis. However, what constitutes a “proportionate” charge in any specific situation is not clear.

Swedish legislative amendments as of 1 July 2025

Finally, it is worth noting that on 1 July 2025, a number of legislative amendments were made to the Swedish public procurement rules relating to the IPI Regulation. Both judicial review and damages claims may now expressly be based on breaches of EU public procurement rules, including the IPI Regulation. In practice, this means that competing tenderers may challenge award decisions or seek damages where a contracting authority has wrongly awarded a contract to a supplier that should have been excluded under the IPI measure, or where the 50 per cent threshold has not been maintained during contract performance. This development strengthens the enforcement framework for the IPI measure in Sweden.

Concluding remarks

One year into the application of the IPI measure, the regulatory framework is well established but there are several unresolved practical questions, in particular as regards the assessment of proportionate charges during contract performance.

Setterwalls is happy to assist with any questions on the application of the IPI Regulation. Please do not hesitate to reach out to our experts with any questions about the IPI measure and its potential implications for your business.