• Home /
• Statewatch Database /
• EU: Commission preparing less military exemptions from competition

EU: Commission preparing less military exemptions from competition

01 November 2005

The European Commission will clarify in 2006 how defence procurements essential to national security - and thus protected from foreign competition - should be distinguished from those deemed non essential and therefore subject to the union's cross-border public tender rules. This initiative will complement the new voluntary code of conduct by the European Defence Agency (EDA) that seeks to keep EU member states from using national security to shield their defence purchases from competition.

This code will take effect in July. The commission's clarification will come in the form of a so-called interpretative communication. This in turn can lead in 2007 to a new legislative proposal to update EU tender rules to reflect the unique needs of defence tenders, such as security clearances and technology transfers.

The code of conduct aims to restrict the use of Article 296 of the EU's founding treaty, which allows an exemption from the free market for military goods in the interest of national security. The ultimate purpose is to restrict this to arms and systems of the highest value like nuclear weapons, military satellites and encryption technology. The code obliges a national defence ministry to explain to the other 24 defence ministries, but not to the EC, its reasons for invoking 296. Specialised law firms are expecting court action in this field if the code is combined with a form of legislation.

The EDA also plans to create a website in 2006 where prior notification of all defence contracts to be competed will be centralised.

Defense News 12.12.05 (Brooks Tigner)