EU Defense Procurement & Export Control Policies
Implementation of EU Directive 2009/81: All EU Member States have now (as of April 2013) transposed the EU Directive that regulates defense and sensitive security procurement. Since 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
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 all 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 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 those products such as end-use conditions. Certificates are recognized by all EU Member States. As of April 2013, a third of certified companies are of U.S. origin.
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
Updated thresholds in the EU Defense Procurement Directive (Update 2012): the thresholds above which the EU Directive applies have been revised: €400 000 for supplies and services, € 5 million for works contracts. Please see our updated Report April 2012. http://www.buyusainfo.net/docs/x_4145998.pdf
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
2012 Updated EU Military List for the application of EU Common Position 944
EU POLICY ON DEFENSE PROCUREMENT
EU Defense Procurement Policy
The European defense procurement marketplace faces a variety of new initiatives. First, the European Commission, whose responsibilities include public procurement, has extended the rules of the EU Single Market to the defense area: a new EU law in the area of defense procurement was officially approved in July 2009 (the EU Defense Procurement Directive). Also, another 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: it 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). Second, the European Defense Agency is also active in the promotion of a competitive defense industrial base and has developed various voluntary codes of conduct and tenders databases.
For more information visit the EC Defense procurement policy/legislation website.
The EU Defense Procurement Directive
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 adopted reform of European acquisition procedures, which includes an EU Directive on Defense Procurement and indicative guidance on the conditions that need to be applied in order to exempt procurement from EU law.
EU Defense Procurement Directive/ Guidance Notes: 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.
EU Directive 2009/81/EC now regulates how contracting authorities purchase defense and security equipment throughout the European Union. The Directive addresses procurement procedures for armaments acquisition, as well as sensitive non-military security supplies, services and works contracts. The new law does not tell governments what to purchase, but how to purchase. US suppliers bidding on contracts covered under the Directive will have to follow the new procedures. The EU Directive contains no EU “preference clause”, and leaves to Member States the decision to invite non-EU bidders in procurement procedures. EU Member States have until August 2011 to transpose the Directive into national legislation.
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.
For more information, please ask for our Market Reports.
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 Treaty of Lisbon, which allows Member States to derogate from Community rules if this 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 for a competitive 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).
Where to Find Tenders for Defense Contracts in the EU
Future defense contracts covered under the new Defense Procurement Directive 2009/81 will be advertised in the EU Tenders Electronic Daily (the “TED” database) in the on-line EU Official Journal, and should indicate whether non-European bidders are invited to participate in the competition.
The European Defense Agency (EDA)
The EDA website displays two databases on its “Electronic Bulletin Board”: the first one features calls for tender from EDA subscribing member states for government contracts covered under Article 346 of the EU Treaty. This article allows EU governments to exempt very sensitive equipment from Community procurement rules when a Member State considers it necessary for the protection of its essential national security interests. The second database features calls for tender for subcontracting contracts (industry to industry) and offers an opportunity to sell components to large European prime contractors.
EU POLICY ON EXPORT CONTROLS
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); other initiatives were generated by the European Commission (such as the EU Dual-Use Regulation or the Intra-EU Transfers Directive) where the EC is able to exercise implementation controls. Also, a major accomplishment is the generalization of the use of an EU “Common Military List”.
1. EU Code of Conduct on Arms Export Control
In 2008, the EU Member States approved the 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 will have to be assessed according to the eight criteria outlined in the new Common Rules. The Common Position also 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 (so: ‘inside’ the EU).
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 new 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 concerns “exports between EU Member States”. The Directive applies to equipment listed on the EU Common Military List 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 information on the certification of companies who want to be recognized as official recipient of defense items resulting from a transfer from another EU Member State, please visit the Certider Database: http://ec.europa.eu/enterprise/sectors/defence/certider/
4. Dual-Use Technology Export Control EU Regulation
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. Items listed in the Regulation must be controlled when exported outside the EU.
The EC/ DG Trade website offers more information on Dual-Use Technologies.
For additional questions, please send an email to the following address: Office.BrusselsEC@trade.gov and please reference "Defense Inquiry" in the subject line. One of our specialists will respond to your inquiry as soon as possible.
Links to web sites outside the U.S. Government or the use of trade, firm, or corporation names within U.S. Commercial Service web sites are for the convenience of the user. Such links and use do not constitute an express or implied official endorsement or approval by the United States Department of Commerce of any private sector web site, or of the products or services of specifically identified companies or entities.
EXPERT ASSISTANCE WITH PROCUREMENT/EXPORT CONTROLS
For companies seeking in-depth technical or legal assistance with compliance issues relating to government defense contracts or export controls, the Commercial Service provides the names of the Business Service Providers who ensure track records in providing multi-country solutions and services.