TENDER
HAVEN
.EU
WHERE DOES
YOUR MONEY
GO?

Follow the money your government spends on public procurement!

How much of your money goes abroad?

There is no truly single market in public procurement in the EU. In most EU countries, less than one quarter of tenders are supplied by companies from other member states. Additionally, up to 10% are supplied from countries outside the EU. We use the best available data but, unfortunately, for some countries such as Greece the data coverage is poor (see details below). In the following maps, the darker the colour, the higher the share of all tenders supplied by foreign-owned companies.

Where abroad does your money go?

Suppliers from abroad are quite often from tax havens and secretive jurisdictions. Check out the origin of the foreign-owned companies supplying your country’s government tenders. For each EU country (select from the drop-down menu), we show you the top 15 countries of origin among the foreign companies supplying that country’s government procurement and the share of those companies on all foreign-owned suppliers (tab ‘Ultimate ownership’). For example, companies originating in the Cayman Islands supply 7.3% of all public procurement supplied by foreign-owned companies in France. You can also view an alternative indicator of ownership, which counts the share of all tenders supplied by companies with an ownership link to a given foreign country (tab ‘Ownership link’). For example, more than two thirds of all public procurement in Latvia is supplied by companies connected to Switzerland. EU countries are displayed in orange, tax havens in red, other countries in green, and the sum of the countries that didn’t make it into the top 15 in yellow.

Which smaller economies supply more tenders than the big ones?

Check out the four EU outliers and which tax havens supply most of the EU’s tenders. The graph displays the value of tenders supplied by companies from EU countries to other member states on the horizontal axis (and also as the size of the bubble) and the countries’ economic size (measured by GDP) on the vertical axis. We highlight four EU outliers - Austria, Cyprus, Luxembourg, and the Netherlands - that have relatively small economies but high values of supplied tenders. For the world, we highlight tax havens on the EU’s grey and black lists. For presentational purposes, we include the USA, China and Japan only in the final graph.

Methodology

This is an online tool that visualizes the origin of firms that supply public procurement in EU countries. It helps us to answer a wide range of policy-relevant questions. For example, what do we know about the ownership of companies that win the tenders in various member states? How open are tenders to companies from other countries? How many of these companies are based in tax havens and make use of financial secrecy or aggressive tax avoidance? Which countries procure primarily from domestically-owned firms? How large is the share of public procurement supplied by firms with ownership outside the EU? Which countries' firms are most successful in European public procurement tenders and what do these countries have in common? So far comprehensive answers to these questions have been lacking.

This project helps to bridge this gap by utilizing the best available cross-country data on public procurement and presenting the answers to these questions to EU citizens. We use public procurement and company data from Datlab’s database sources (extended Digiwhist database and Opentender.eu). The data availability on both tenders and company ownership differs across countries and because of some countries’ low data availability, the presented results should be considered illustrative only. Indeed, even though we use the best available data, we call for their substantial improvement. Our data and methodology are described in detail in the accompanying methodology paper, and underlying data for the graphs presented on this page are available here.

Policy

The member states and the EU should work together to improve the integration of the procurement market and address their exposure to tax havens. There are a number of policy changes needed and further analysis and research in the future, in particular with improved data quality, should point to the most promising areas of policy change to make public procurement more internationalised and transparent. These policy changes will likely require revisions to the EU’s directive on public procurement. The European Parliament’s recent recommendations (in particular 51 and 126) and cities such as Helsinki or 25 cities in Spain are making moves in the right direction. Here we highlight two crucial policy recommendations: more tenders in one place and public registers of beneficial ownership.

To make public procurement more open to companies from other countries and thereby further integrate the EU markets, policy makers should consider lowering the threshold for the publication of tenders in the official EU journal where government authorities publish procurement notices, known as Tenders Electronic Daily. This change would increase the number of tender notices that can be easily accessed by a wider range of potential suppliers. European companies could thus better exploit the currently little used opportunities of the single public procurement market within the EU.

To mitigate the financial secrecy risks of tax havens, the level playing field for all companies from all countries should be evened by requiring minimum public disclosure standards. A case in point is the requirement to make details of each company’s beneficial ownership publicly available. Public registers of beneficial ownership are intended to eliminate secret ownership of assets. As recent leaks including the Panama Papers and Paradise Papers have powerfully demonstrated to the European and global public, financial secrecy lies at the heart of many criminal and corrupt practices, including those related to public procurement. Public registers of beneficial ownership are a crucial step towards making tenders and their suppliers more transparent.

About

The core team behind TenderHaven.EU is based at Charles University, Prague, Czech Republic, collaborates with Datlab and consists of three members. Petr Janský (jansky.peta@gmail.com) is an economist focusing on tax, tax havens and public spending with policy papers and publications in academic journals including a few of them on public procurement. Miroslav Palanský (miroslav.palansky@gmail.com) is an economist specialising in multinational enterprises, public procurement and political financing. Jiří Skuhrovec (jskuhrovec@gmail.com) is an economist specialising in public procurement.

These three members are assisted by IT specialists from Datlab, a Czech IT company that works closely with NGO sector and runs several major opendata services, such as vsechnyzakazky.cz (procurement database), zindex.cz (public procurement buyers ranking). In particular, TenderHaven.EU would not exist without the cooperation with Jakub Krafka and Tomáš Pošepný, who have both played pivotal roles in creating the first application that shows where your money goes.