The Conflict of Interest Act and its connection to public procurement and subsidy rules are among the most problematic areas of Czech legislation. Shortcomings in the legal framework have specific impacts not only on public administration but also on ordinary entrepreneurs. Czechia wasted the "quiet years" when it could have amended the law without urgently needing to apply it in practice.
The imminent arrival of a prime minister who also owns a large business holding company raises a number of questions that Czechia has been grappling with since Andrej Babiš last headed the cabinet. However, despite the passage of time, it has not yet been able to resolve them satisfactorily. The current legal regulation of conflicts of interest is insufficient and not consistent with other laws. In practice, this creates legal uncertainty for contracting authorities, entrepreneurs, and subsidy providers. This was the consensus among experts from the legal, academic, and business spheres who discussed the issue at the conference "Conflict of Interest in Public Procurement and Subsidy Provision" organized by the Prague Chamber of Commerce.
The result of this unfortunate situation is delays in projects and an environment in which even honest entrepreneurs award public contracts for which they have received subsidies with great concern. They risk losing their hard-earned subsidies due to the unclear interpretation of the law.
Real-life examples: a farmer and Agrofert
Babiš's conflict of interest also threatens entrepreneurs who have nothing to do with him or Agrofert. "This has an impact not only on the state administration, but also on ordinary people," warned Jaromír Císař, a partner at the Portos law firm. As an example, he cited the situation of a farmer who wants to buy a tractor and draw on a subsidy for it. According to the subsidy rules, he must issue a tender for suppliers and select the most advantageous offer. However, a problem arises if the most advantageous offer for the farmer comes from a company that belongs to the Agrofert group.
According to Císař, the contracting authority has two options in such a case: either it can accept the most advantageous bid, but then there is a risk of a conflict of interest and thus the withdrawal of subsidies, or it can exclude Agrofert. It can then accept the second most advantageous, and therefore usually more expensive, bid. "In that case, however, farmers can expect years of litigation with the excluded company from the Agrofert group, which will believe that it was excluded for reasons it considers illegal," Císař illustrates the problem.
The entire article can be found on the Česká justice website.
