EU Defence Package
With this package, which consists of two directives and an interpretative communication, the EU is able to introduce coherent, transparent and competitive rules for trade and the procurement of contracts in the defence sector.
The Defence Package is designed to intensify competition on the European defence markets. At the same time, businesses can take advantage of reduced bureaucratic burdens. The package’s primary objective is to simplify the licensing regime for transfers of defence-related products within the EU. Furthermore in all future procedures relating to the awarding of contracts, unsuccessful bidders can have the legality of the procurement procedure verified by an independent body. And finally, the participation of SMEs in defence contracts shall be facilitated through new sub-contracting modalities. Once the Council has approved the package, Member States will have to implement the two directives within two years.
It is intended that the Defence Package will put an end to the current fragmentation of the European defence market. For example, up until now exports of defence equipment from one Member State to another have been exempt from the rules generally applied within the common market and subject to an independent licensing regime for exports and recoveries. The bureaucratic effort needed for businesses to apply for a license has been very high, because no distinction has been made between exports to third countries and EU Member States.
Additionally the procurement of defence-related products has, so far, not been subject to European public procurement law. Decisions on the procurement of contracts are largely left to the individual Member States, who, as a consequence, spend almost 85% of their funds earmarked for the procurement of defence projects at home. This practice is justified on the basis of Article 296 of the EC Treaty, which lays down special provisions concerning the production of and trade in defence-related products, so that Member States can safeguard their essential security interests. Up to now it has been almost impossible to confirm that such essential security interests are affected.