The recent No-Spy-Decree issued by the German Federal Ministry of the Interior establishes extremely high safety and confidentiality requirements for contracts with public authorities (public contracts) in the context of procurement procedures. In future procurement procedures which potentially have safety relevance for the Republic of Germany, tenderers will have to provide a “no spy declaration” (Eigenerklärung). Tenderers will have to explicitly confirm that they are able to comply with the confidentiality obligations provided for in the final public contract. Moreover they have to guarantee that at the time of the submission of the offer they do not face any legal obligation to disclose confidential information, business or trade secrecies to foreign intelligence services. If disclosure obligations arise after the conclusion of the public contract, the supplier is obliged to inform the contracting authority that he will not be able to comply with the no spy obligation any longer.

Rigorous Legal Consequences for future contracts

Especially in cases where foreign law provisions prohibit informing the contracting authority about the disclosure, it will be feasible for German authorities to exclude tenderers from the bidding process or to terminate the public contract. In the future it will be sufficient to proof a legal obligation for disclosure by foreign law to justify exclusion or termination of contract. In case a tenderer does not provide the “no spy declaration”, his offer will be excluded from the bidding process and he will have no further possibility to conclude the public contract. If a disclosure obligation arises after the award of the public contract and the tenderer does inform the contracting authorities about such obligation, he may be able to save the public contract by presenting a binding concept for prevention of data access by foreign intelligence services. In case he does not inform the contracting authorities, this will be considered as a breach of contract leading to a right for the authorities to withdraw from or terminate the public contract.

What happens to existing contracts?

With regard to existing contracts there is a wealth of interpretation possibilities. Therefore it is not excluded that existing contracts will be affected by the “No-Spy-Decree.“ With regard to existing framework contracts the German Federal Ministry of the Interior instructs the authorities to try to get voluntarily “no spy declarations” and to negotiate an amendment of the framework contract. If a contracting party refuses to agree this has to be reported to the ministry.

Further: Criminal Prosecution!

A breach of the no spy obligation may have consequences under the strict German Criminal Code (StGB). The person disclosing the information to the foreign intelligence services may be prosecuted according to § 99 StGB for performing intelligence operations against the Federal Republic of Germany. The undertaking itself can be fined up to ten million Euros for intentional criminal conduct of its corporate body under § 30 of the Code of Administrative Offences (OWiG).