EU Defense Procurement & Export Control Policies
Updated thresholds in the EU Defense Procurement Directive in 2014: the thresholds above which the EU Directive applies have been revised: €414 000 for supplies and services, and €5.18 million for works contracts. See our new Report.
High-level Conference on the European Defence sector: In March 2014, the EC (DG Markt and DG Enterprise) presented the follow-up activities to the 2013 Communication entitled “Towards a more competitive and efficient defence and security sector”. The EC Communication, together with the EDA Report on CSDP, were discussed by Heads of State and Government at the European Council of December 2013.
Certification of Defense Companies: companies and production plants established in the EU who want to become an officially registered business to be allowed to receive defense items listed on the EU Military List under a transfer license from a supplier established in another Member State, need to be registered under the competent Export Control Authority of the EU member State where they are established. The EC website of DG Enterprise displays the companies that are certified according to EU Directive 2009/43 that regulates the transfer of defense items between EU Member States. This Database displays information about the companies that are officially recognized as being “Certified” under EU and national law. Certification is granted at national level and is meant to recognize the capacity of defense companies to receive military equipment with the obligation to respect all the conditions attached to the license for those products. Certificates are recognized by all EU Member States. The EC is currently (April 2014) studying the reasons and impact of the lack of use of this Directive, since very few companies have applied for certification.
Go to Certider website: http://ec.europa.eu/enterprise/sectors/defence/certider/or Our Report on the reform of transfers of defense equipment in the EU: http://www.buyusainfo.net/docs/x_7576476.pdf
Implementation of EU Directive 2009/81: All EU Member States transposed the EU Directive that regulates defense and sensitive security procurement. In the two years following the deadline for its implementation in September 2011, about 900 contracts have been awarded under Directive 2009/81, representing a total of €1.8 billion. Those contracts were published in TED, the official EU Public Procurement portal which covers all procurement announcements covered by EU legislation. http://ted.europa.eu/TED/main/HomePage.do
Report on FRONTEX, the EU Agency for External Border Management: In November 2011, the EU Frontex Regulation was revised, with changes brought to its expanding power, autonomy, budget and operational capabilities. In the future, Frontex’s new purchasing power may provide U.S. companies with European subsidiaries with new export possibilities. See our section on Market Research on the EU. http://www.buyusainfo.net/docs/x_4356573.pdf
2013 Updated EU Military List for the application of EU Common Position 944 http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2013:090:0001:0037:EN:PDF
EU Defense Procurement Policy
The European defense procurement marketplace faces a variety of new initiatives. First, the European Commission, whose responsibilities include public procurement policy and legislation, has extended the rules of the EU Single Market to the defense procurement area with the adoption of the EU Defense Procurement Directive. Indeed, the EC areas of competence include the regulation of public procurement markets, both civil and military. Second, the EU Directive on Intra-EU Transfers of Defense products complements the Defense Procurement Directive as the second element of the so-called “EC Defense Package” proposed by the European Commission in 2007. The Directive reforms the procedures for transferring military equipment between EU Member States by proposing new multi-country licensing authorizations and requires recipients of defense transfers to be certified according to EU criteria (see chapter on export controls). Third, the European Defense Agency is also active in the promotion of a competitive defense industrial base and has developed various procurement policies through voluntary codes of conduct.
The EU Defense Procurement Directive 2009/81
For decades, EU Member States have been procuring military equipment according to their own national law. This practice now comes to an end with the reform of European defense acquisition procedures. The EU Directive on Defense Procurement 2009/81 regulates the purchase of sensitive security and military equipment, services and works. EU Directive 2009/81/EC does not dictate governments what to purchase, but how to purchase. U.S. suppliers bidding on contracts covered under the EU Directive will have to follow the new procedures. The EU Directive leaves to Member States the decision to invite non-EU bidders in procurement procedures.For more information visit the EC Defense procurement policy/legislation website.
EU Defense Procurement Directive/ Guidance Notes 2010: The EC published its long-awaited Guidance Notes to help understand 7 important aspects of the EU Directive: its field of application, offsets, exclusions, research & development, security of supply, security of information and rules on subcontracting.
Frequently Asked Questions.
Article from Single Market News (No.55; EC publication) on the EU Defense Procurement Directive that includes information on the proposed alternatives to current offset requirements.
The Interpretative Communication
The Interpretative Communication on the application of Article 296 of the Treaty in the field of defense procurement clarifies the conditions for the use of former Article 296, now Article 346 under the EU Treaty (TFEU), which allows Member States to derogate from Community rules if it is necessary for the protection of their essential security interests. Frequently Asked Questions.
The European Defense Agency
The European Defense Agency (EDA) was created in 2004 as an agency of the Council, and is pursuing four goals: develop European capabilities, promote armaments co-operation between Member States, promote defense research and technology, and develop the necessary tools to increase the competitiveness of the defense industrial base and market in the EU.
Regarding defense markets: the EDA promotes measures aimed at improving transparency and competitiveness in the European defense and technological industrial base (EDTIB). The EDA Procurement Gateway portal offers extensive information for suppliers and contracting authorities: http://www.eda.europa.eu/procurement-gateway
Where to Find Tenders for Defense Contracts in the EU: TED
Defense contracts covered under the Defense Procurement Directive 2009/81 are advertised in the EU Tenders Electronic Daily (the “TED” database) in the on-line EU Official Journal.
Export Control Policy Background
Traditionally, the EU has exercised little influence over the control of exports of munitions and arms of the EU Member States: they were responsible for drafting and updating their own list of controlled arms and munitions, and for acting according to their national export control policy. However, for the past few years, a number of initiatives were introduced, aimed at enhancing cooperation among EU Member States, some of which are detailed below. Some initiatives were generated at the EU Council level, with policies that EU Member States have to apply without any EU-level enforcement mechanism (such as the “Common Positions” outlined below). On the legislative front, the European Commission is responsible for the legislation and policy concerning the export control of dual-use equipment. A major accomplishment is the generalization of the use of the EU “Common Military List”.
1. EU Code of Conduct on Arms Export Control
In 2008, the EU Member States adopted Common Position 2008/944 making the 1998 EU Code of Conduct on Arms Exports legally binding. Every request for an arms export license for an item referenced in the EU Common Military List has to be assessed according to the eight criteria outlined in the new Common Rules. The Common Position includes a mechanism among EU Member States to consult and inform each other about denials of arms export and brokering licenses. The Common Position only concerns exports of military items ‘outside’ the EU, and complements the EU Directive on Intra-EU Transfers of Defense Equipment and Technology, which regulates the transfers between EU Member States.
For more information please click here for our Market Report.
2. EU Control of Arms Brokering
On 23 June 2003 the Council adopted Common Position 2003/468/CFSP aimed at regulating arms brokering. The Common Position establishes a set of provisions to be implemented through national legislation, requiring the Member States to take all the necessary measures to control brokering activities on their territory or carried out by brokers of their nationality.
3. The Intra-EU Transfers Directive
The EU Directive 2009/43/EC on Intra-Community Transfers (“ICT”) of Defense Products outlines a set of laws with a twofold aim: first, reforming European licensing procedures for the transfer of defense articles within the EU, and second, introducing common criteria for the certification of recipients of defense transfers. The term “transfer” here relate to “exports between EU Member States”. The Directive applies to equipment listed on the EU Common Military List (2013) and is one part of the so-called “EC Defense Package” that also comprises the EU Directive on Defense Procurement, outlined above.
The objective of the Transfers Directive is to create an area where military goods and components can circulate more freely between EU Member States, on the basis of a harmonized European licensing system aimed at reducing the number of individual licenses to the benefit of the use of General and Global Licenses.
For more, please consult our Market Report Information.
For The EC has created an open Register with information on the companies which have applied for certification and are therefore recognized as recipient of defense items, please visit the Certider Database: http://ec.europa.eu/enterprise/sectors/defence/certider/
4. EU Regulation on Dual-Use Export Controls
Dual-Use goods and technologies are products and technologies which are normally used for civilian purposes but which may have military applications. Exports, transfers, brokering and transit of dual-use items referenced on the EU Dual-Use List are controlled by EU legislation. Council Regulation (EC) No.428/2009 sets up a Community regime for the control of exports, transfers, brokering and transits of dual-use items. The EC/ DG Trade website offers more information on Dual-Use Technologies.
Please see our Report on EU Regulation 428/2009
For additional questions, please send an email to the following address: Office.BrusselsEC@trade.gov and please reference "Defense Inquiry" in the subject line.
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