EU Law: Defence equipment transfers

Is the European Union causing all the red tape, or could there be other culprits?


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Defence equipment transfers

The internal market and the emergence of a European Defence Equipment Market (EDEM) is hampered by 27 different national licensing regimes, even between member states of the European Union.

One of the Commission’s cautious steps to improve the prospects for the EU defence industry and to promote a functioning internal market in defence equipment, was to single out intra-EU transfers for a proposed Directive.

In the words of the commission, the objective of the proposal was to reduce the obstacles to the circulation of defence-related goods and services (products) within the internal market, and to diminish the resulting distortions of competition, by simplifying and harmonizing licensing conditions and procedures. In view of the specific features of the defence market and the need to protect national security, the Commission did not propose to abolish licensing requirements but rather to replace them by a streamlined system of general or global licenses, to which individual licensing would remain the exception. Such system would provide guarantees as to the reliability of the recipient to respect restrictions prescribed by the member state of origin.



The proposed Directive on simplifying terms and conditions of transfers of defence-related products within the Community (Brussels, 5.12.2007 COM(2007) 765 final), is available here:

http://ec.europa.eu/enterprise/defence/defence_docs/COMM_2007_0765_F_EN.pdf


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Quick overview


For a quick view of the Commission’s efforts to promote cross-border procurement of member states’ armed forces, there is a four page press release, Commission proposes cutting red tape in EU defence industry (MEMO/07/546, Brussels 5th December 2007):

http://ec.europa.eu/enterprise/defence/defence_docs/MEMO-07-546_EN.pdf

National red tape is said to cost EU companies and administrations € 433 million directly per year and € 2.73 billion indirectly, although not one of 11500 annual requests for intra-EU transfer licences has been formally denied since 2003.


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Impact assessment

The proposed Directive on intra-EU transfers was accompanied by two Commission Staff Working Documents. The impact assessment summary SEC(2007) 1574 is available here:

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:52007SC1594:EN:HTML


The longer impact assessment SEC(2007) 1593 is available here:

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:52007SC1593:EN:HTML


The impact assessment and summary lay out the reasons for the proposal and the chosen options.


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European Parliament

At its first reading on 16 December 2008, the European Parliament approved the proposed Directive with amendments:

http://www.europarl.europa.eu/sides/getDoc.do;jsessionid=FE68FF66A91E1C708351395837549126.node1?pubRef=-//EP//TEXT+TA+P6-TA-2008-0603+0+DOC+XML+V0//EN


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Future posts will look at the contents of the proposed Directive on defence-related products.


Ralf Grahn