The European Commission is preparing new rules that would allow public authorities across the European Union to exclude foreign companies from public contracts if they are considered a threat to the bloc’s security or public safety.

According to a draft regulation expected to be presented in September, the proposal would give governments greater authority to block companies whose ownership structures, financing or legal obligations in non-EU countries could expose sensitive information or interfere with the delivery of public services.

The initiative comes as the European Union seeks to strengthen its economic security amid rising geopolitical tensions and growing concerns over dependence on foreign technology and critical raw materials. European officials have become increasingly cautious about risks linked to data transfers, cyber threats and supply chain disruptions involving major global powers.

Under the proposed regulation, public authorities would be required to consider security and public safety throughout the procurement process, from early planning and market consultations to contract awards and implementation. Authorities would have the power to assess whether a company’s ownership, control or financing creates the possibility of undue foreign influence.

The draft also highlights concerns about businesses that are subject to legislation in non-EU countries that could compel them to hand over sensitive information or interfere with contractual obligations. Such risks have gained prominence as both the United States and China have enacted laws allowing authorities to request access to data held by companies operating under their jurisdictions.

Another feature of the proposal would allow public buyers to give preference to European companies when awarding contracts. While the measure would not be mandatory, it reflects the European Union’s broader effort to strengthen domestic industries and reduce reliance on external suppliers in strategically important sectors.

The move follows the European Commission’s push for a stronger “Made in Europe” industrial strategy announced earlier this year, targeting clean technologies, the automotive industry and energy-intensive manufacturing.

Several EU member states have already taken similar steps. France ended its contract with Microsoft for hosting sensitive national health data and later selected French technology company ChapsVision to process information for the country’s domestic intelligence service. Other European nations, including Germany, Italy, Denmark and France, have also restricted or blocked contracts involving Chinese telecommunications company Huawei over national security concerns.

The proposed regulation also focuses on protecting critical infrastructure, supply chains, essential public services and advanced technologies from potential disruption. European officials have become increasingly concerned about strategic dependencies after China restricted exports of rare earth minerals, which are essential for renewable energy technologies, electric vehicles and defense equipment. European industries have also faced challenges involving access to semiconductor components needed for automobile manufacturing.

If approved, the new rules would mark another step in the European Union’s effort to strengthen economic resilience, safeguard sensitive public contracts and reduce vulnerabilities linked to foreign suppliers in sectors considered vital to the bloc’s long-term security.