2. Carry out procurement

According to the Public Procurement Act, a supplier shall be excluded if it has been convicted of certain serious crimes by a final judgment. In relation to the Supplier Code of Conduct, the following are particularly relevant:

• bribery (Chapter 13, Section 1, Section 2, Paragraph 1 of the Public Procurement Act)
• human trafficking, which includes forced labour and exploitative child labour (Chapter 13, Section 1, Section 6, Paragraph 1 of the Public Procurement Act)

If the supplier is a legal person, the supplier shall be excluded if a person who is part of the supplier’s administrative, management or supervisory body has been convicted of the crime. The same applies if the person convicted of the crime is authorised to represent, make decisions about or control the supplier. However, you may not allow a judgment older than five years, counted from the time of the exclusion decision, to be the basis for exclusion.

Since a final judgment is required, the mandatory grounds for exclusion contribute to legal certainty. At the same time, they have limited practical significance, as the requirement targets the tenderer – and identified first-tier subcontractors – and there are few convictions on bribery and human trafficking in Sweden. Finding convictions regarding tenderers and identified first-tier subcontractors from other countries can be difficult.

According to the Public Procurement Act, you shall also exclude a supplier if the supplier has not fulfilled its obligations regarding the payment of taxes or social security contributions and this has been established by a judgment or an authority decision that has become legally binding (Chapter 13, Section 2, Paragraph 1 of the Public Procurement Act). There is no explicit time limit for how long such a judgment or decision can be the basis for exclusion. You may also exclude if you can demonstrate in another appropriate way that the supplier has unpaid taxes and social security contributions (Chapter 13, Section 2, Paragraph 2 of the Public Procurement Act).

You may also exclude suppliers for other reasons related to the Supplier Code of Conduct, including:

• if you can demonstrate that the supplier has violated applicable environmental, social or labor law obligations (Chapter 13, Section 3, Paragraph 1, LOU)
• if you have sufficiently probable indications that the supplier has entered into agreements with other suppliers aimed at distorting competition (Chapter 13, Section 3, Paragraph 4, LOU), and
• if the supplier has demonstrated severe or persistent deficiencies in the fulfillment of any essential requirement in a previous contract (Chapter 13, Section 3, Paragraph 5, LOU).

Since judgments are not required for these voluntary exclusion grounds, they are often more relevant in relation to due diligence.

That the supplier has disregarded applicable environmental, social or labour law obligations can be demonstrated, for example, by:

• supervisory decisions or other enforcement actions by authorities, such as administrative fines, injunctions or prohibitions issued by, for example, the Swedish Work Environment Authority or municipalities and county administrative boards in relation to environmental supervision
• court judgments or other legal decisions
• documented monitoring, follow-up or investigations by trade unions, civil society organisations or the media.

This means that you should ensure that you check relevant sources of information, such as the Swedish Work Environment Authority’s archive, if this type of issue is not already covered by the digital services you use to check judgments, sanctions, politically exposed persons and adverse media. Please note that the platform Kapitel13 is limited to reporting criminal convictions only, i.e. primarily those relating to the mandatory exclusion grounds.

You also need to ensure that you can substantiate violations and treat suppliers equally and proportionately. Information from, for example, trade unions, civil society and the media can be important indications, but needs to be supplemented or verified if necessary in order to be used as a basis for a decision on exclusion.

Severe or persistent deficiencies in the fulfillment of any essential requirement in a previous contract may be relevant if a previous contract has led to sanctions due to non-compliance with due diligence contract clauses or similar. For this basis to work in practice, contracting organisations need to:

• document deviations and measures in their own contracts
• uses sanctions such as liquidated damages, call-off suspensions and terminations
• share relevant information with other contracting organisations (as is done between the regions and between the regions and Adda Central Purchasing Body),
• and use this information in new procurements.

Without such information sharing, the possibility of exclusion risks having limited effect.

As regards the voluntary exclusion grounds, you may not allow an event that occurred more than three years ago, counted from the time of the exclusion decision, to be the basis for exclusion.

The Court of Justice of the European Union has clarified that suppliers from third countries without free trade or procurement agreements with the EU do not have the same right of access to EU procurement as suppliers from the EU or countries with such agreements, meaning they can be excluded.

At the same time, the Commission has stressed that this case law only concerns tenderers’ access to procurement and does not the issue of access for goods or services originating in countries not covered by such agreements. The legal situation is therefore unclear as regards the possibility of restricting goods, components or raw materials based on origin.

The situation is further complicated by the fact that the Forced Labour Regulation will enter into force in December 2027 and that certain geographical areas are considered to be at increased risk of state-imposed forced labour.