In a recent ruling, the Higher Regional Court of Düsseldorf stated that German public bodies may use no-spy clauses in contracts to be awarded in a public procurement process. Such no-spy clauses shall prohibit bidders from making available confidential information to foreign intelligence services. However, it has to be noted that such requirements may only be used as performance criteria (i.e. criteria for the evaluation of the bidder’s offer) and as performance obligations in the contract to be awarded. Although the Court’s opinion (which was not decisive for the case in question and therefore only constitutes an obiter dictum) does not bind other courts, it gives a strong indication of how other German courts might deal with similar issues in the future.

The Higher Regional Court’s decision confirms the German no-spy strategy which is especially problematic for US IT companies (and their German subsidiaries) which are obliged to cooperate with US intelligence services. For companies interested in taking part in public procurement procedures in Germany but which currently have problems to accept no-spy clauses, it might be a long-term option to restructure their relevant business unit in a way that requests for information by a foreign intelligence service simply cannot be fulfilled.