Art. 5. Common principles relating to exclusion for concessions, public contracts and agreements between contracting entities and authorities within the public sector

1. A concession or a public contract, in the ordinary or special sectors, awarded by a contracting authority or a contracting entity to a legal person governed by private or public law shall fall outside the scope of this Code where all of the following conditions are fulfilled:

a) the contracting authority or contracting entity exercises over the legal person concerned a control which is similar to that which it exercises over its own departments;

b) more than 80 % of the activities of the controlled legal person are carried out in the performance of tasks entrusted to it by the controlling contracting authority or contracting entity or by other legal persons controlled by that contracting authority or contracting entity;

c) in the controlled legal person there is no direct private capital participation, with the exception of non- controlling and non-blocking forms of private capital participation required by national legislative provisions, in conformity with the Treaties, which do not exert a decisive influence on the controlled legal person.

2. A contracting authority or contracting entity exercises over a legal person a control similar to that which it exercises over its own departments within the meaning of point a) of the first subparagraph of this paragraph, where it exercises a decisive influence over both strategic objectives and significant decisions of the controlled legal person. That control may also be exercised by another legal person, which is itself controlled in the same way by the contracting authority or contracting entity.

3. This Code does not apply where a controlled legal person which is a contracting authority or contracting entity awards a contract or a concession to its controlling contracting authority or contracting entity, or to another legal person controlled by the same contracting authority or contracting entity, provided that there is no direct private capital participation in the legal person being awarded the public contract with the exception of non-controlling and no blocking forms of private capital participation required by national legislative provisions, in conformity with the Treaties, which do not exert a decisive influence on the controlled legal person.

4. A contracting authority or a contracting entity may award a concession without applying this Directive where all of the conditions referred to in paragraph 1 are met, also in case of joint control.

5. Contracting authorities or contracting entities exercise joint control over a legal person where all of the following conditions are fulfilled:

a) the decision-making bodies of the controlled legal person are composed of representatives of all participating contracting authorities or contracting entities. Individual representatives may represent several or all of the participating contracting authorities or contracting entities;

b) those contracting authorities or contracting entities are able to jointly exert decisive influence over the strategic objectives and significant decisions of the controlled legal person;

c) the controlled legal person does not pursue any interests which are contrary to those of the controlling contracting authorities or contracting entities.

6. An agreement concluded exclusively between two or more contracting authorities shall fall outside the scope of this Code where all of the following conditions are fulfilled:

a) the contract establishes or implements a cooperation between the participating contracting authorities or contracting entities with the aim of ensuring that public services they have to perform are provided with a view to achieving objectives they have in common;

b) the implementation of that cooperation is governed solely by considerations relating to the public interest;

c) the participating contracting authorities or contracting entities perform on the open market less than 20 % of the activities concerned by the cooperation.

7. For the determination of the percentage of activities referred to in paragraph 1, letter b) and to paragraph 6, letter c), the average total turnover or an appropriate alternative activity based measure such as costs incurred by the relevant legal person, contracting authority or contracting entity in the services, supplies and works sectors for the three years preceding the concession award shall be taken into consideration.

8. Where, because of the date on which the relevant legal person, contracting authority or contracting entity was created or commenced activities or because of a reorganization of its activities, the turnover, or alternative activity based measure such as costs, are either not available for the preceding three years or no longer relevant, it shall be sufficient to show that the measurement of activity is credible, particularly by means of business projections.