The Directive, which aims to simplify the transfer of defence-related products within the internal market has been finalised and published:
Directive 2009/43/EC of the European Parliament and of the Council of 6 May 2009 simplifying terms and conditions of transfers of defence-related products within the Community.
This text with EEA relevance was published in the Official Journal of the European Union (OJEU) 10.6.2009 L 146/1.
The EU member states have time until 30 June 2011 to transpose the Directive, and its provisions become applicable from 30 June 2012.
Ralf Grahn
Showing posts with label transfer. Show all posts
Showing posts with label transfer. Show all posts
Wednesday, 10 June 2009
Tuesday, 27 January 2009
EUISS: European Defence Markets
In Towards a European Defence Market (Chaillot Paper No 113, November 2008, 126 pages), published by the European Union Institute for Security Studies (EUISS), four researchers describe the current state of affairs and the prospects for progress.
The publication is available at www.iss.europa.eu and the individual contributions are:
Daniel Keohane: Introduction – Towards a European Defence Market
Erkki Aalto: Interpretations of Article 296
Christian Mölling: Options for an EU regime on intra-Community transfers of defence goods
Sophie de Vaucorbeil: The changing transatlantic defence market
***
Defence transfers
The publication of the EUISS report roughly coincided with the adoption of the new Defence Transfers Directive by the European Parliament.
Christian Mölling’s article, Options for an EU regime on intra-Community transfers of defence goods (page 51 to 88), is a researcher’s assessment of the coming Directive.
Mölling explores the dilemma of national governments caught between economic-industrial challenges and security concerns. He sets out to show the relevance of an intra-EU transfer regime for the European Defence Equipment Market (EDEM), to offer criteria for the viability and efficiency of a potential regime and to evaluate the main options for an intra-European transfer regime for defence goods.
Against the background of fragmented defence markets and national procurement policies, Mölling concludes that the current situation serves neither economic interests nor the security interests of the European defence sector.
The article evaluates the components necessary for a functioning intra-Community transfer system, and it concludes that it is time for the member states to start offering solutions.
Mölling’s analysis is well worth reading.
Ralf Grahn
The publication is available at www.iss.europa.eu and the individual contributions are:
Daniel Keohane: Introduction – Towards a European Defence Market
Erkki Aalto: Interpretations of Article 296
Christian Mölling: Options for an EU regime on intra-Community transfers of defence goods
Sophie de Vaucorbeil: The changing transatlantic defence market
***
Defence transfers
The publication of the EUISS report roughly coincided with the adoption of the new Defence Transfers Directive by the European Parliament.
Christian Mölling’s article, Options for an EU regime on intra-Community transfers of defence goods (page 51 to 88), is a researcher’s assessment of the coming Directive.
Mölling explores the dilemma of national governments caught between economic-industrial challenges and security concerns. He sets out to show the relevance of an intra-EU transfer regime for the European Defence Equipment Market (EDEM), to offer criteria for the viability and efficiency of a potential regime and to evaluate the main options for an intra-European transfer regime for defence goods.
Against the background of fragmented defence markets and national procurement policies, Mölling concludes that the current situation serves neither economic interests nor the security interests of the European defence sector.
The article evaluates the components necessary for a functioning intra-Community transfer system, and it concludes that it is time for the member states to start offering solutions.
Mölling’s analysis is well worth reading.
Ralf Grahn
Friday, 23 January 2009
Arms trade framework: Germany
On this blog we have reported on the new European Community (European Union) Defence Procurement Directive and Defence Transfers Directive, adopted by the European Parliament in January 2009 and December 2008 respectively.
We now suggest some further reading for those who are interested in the wider context of arms trade issues and export licenses in an international or EU context.
On 17 December 2008 the German Federal Government published its latest annual report on arms exports, Rüstungsexportbericht 2007, officially Bericht der Bundesregierung über ihre Exportpolitik für konventionelle Rüstungsgüter im Jahre 2007.
The report (157 pages including annexes) is available on the web pages of the Bundesministerium für Wirtschaft und Technologie (BMWi):
http://www.bmwi.de/BMWi/Redaktion/PDF/Publikationen/ruestungsexportbericht-2007,property=pdf,bereich=bmwi,sprache=de,rwb=true.pdf
For our purposes, we want to draw attention to the presentation of the international arms trade framework (page 10 to 20). The brief and clear presentation includes arms reduction, weapons embargoes, the European Union common foreign and security policy, the proposed Defence Transfers Directive, the Farnborough Agreement, the Wassenaar Arrangement, the United Nations, small arms, a proposed Arms Trade Treaty and Outreach Activities.
Governments in other EU member states may be interested in the description of the German arms export license system.
Ralf Grahn
We now suggest some further reading for those who are interested in the wider context of arms trade issues and export licenses in an international or EU context.
On 17 December 2008 the German Federal Government published its latest annual report on arms exports, Rüstungsexportbericht 2007, officially Bericht der Bundesregierung über ihre Exportpolitik für konventionelle Rüstungsgüter im Jahre 2007.
The report (157 pages including annexes) is available on the web pages of the Bundesministerium für Wirtschaft und Technologie (BMWi):
http://www.bmwi.de/BMWi/Redaktion/PDF/Publikationen/ruestungsexportbericht-2007,property=pdf,bereich=bmwi,sprache=de,rwb=true.pdf
For our purposes, we want to draw attention to the presentation of the international arms trade framework (page 10 to 20). The brief and clear presentation includes arms reduction, weapons embargoes, the European Union common foreign and security policy, the proposed Defence Transfers Directive, the Farnborough Agreement, the Wassenaar Arrangement, the United Nations, small arms, a proposed Arms Trade Treaty and Outreach Activities.
Governments in other EU member states may be interested in the description of the German arms export license system.
Ralf Grahn
Tuesday, 20 January 2009
EU defence transfer licenses
The Defence Transfers Directive, officially Directive 2009/.../EC of the European Parliament and of the Council on simplifying terms and conditions of transfers of defence-related products within the Community, creates a common license framework for the member states of the European Union.
In principle, the transfer of defence-related products requires prior authorisation, even between the EU member states.
The member states can exempt certain transfers from the licensing requirement, for instance when the recipient is a government or its armed forces, the EU, NATO and another intergovernmental organisation (Article 4).
When authorisation is needed, the Defence Transfers Directive offers the member states two options aimed at reducing the bureaucracy of individual transfer licenses: general and global transfer licenses.
The following presentation is only a rough sketch. For detail, you have to read the Directive.
***
General transfer licences
Member States shall publish general transfer licences directly granting authorisation to suppliers, established on their respective territories, who fulfil the terms and conditions attached to the licence, to perform transfers of defence-related products to be specified in the licence to a category or categories of recipients located in another member state.
The main aim of the general transfer license is to cover procurement by the armed forces of an EU member state or a contracting authority buying exclusively for the armed forces, but there are other grounds too (Article 5).
***
Global transfer licenses
Global transfer licences are granted for three years, and they can be renewed. The global transfer license covers an individual supplier of products to recipients in one or more EU member states.
The licensing member state determines in each global transfer licence the defence-related products or categories of products covered by the global transfer licence, as well as the authorised recipients or category of recipients (Article 6).
***
Individual transfer licences
If neither a general nor a global transfer license applies, the last resort is an individual transfer license (if any).
The member state grants an individual transfer licence to an individual supplier authorising one transfer of a specified quantity of specified defence-related products to be transmitted in one or several shipments to one recipient in one or more of the following cases:
a) where the request for a licence is limited to one transfer;
b) where it is necessary for the protection of its essential security interests, or for the protection of public policy;
c) where it is necessary for compliance with international obligations and commitments of Member States;
d) where a Member State has serious reasons to believe that the supplier will not be able to comply with all the terms and conditions necessary to grant it a global licence (Article 7).
***
The text of the Defence Transfers Directive, adopted by the European Parliament, is available here:
http://www.europarl.europa.eu/sides/getDoc.do;jsessionid=FE68FF66A91E1C708351395837549126.node1?pubRef=-//EP//TEXT+TA+P6-TA-2008-0603+0+DOC+XML+V0//EN#BKMD-29
Ralf Grahn
In principle, the transfer of defence-related products requires prior authorisation, even between the EU member states.
The member states can exempt certain transfers from the licensing requirement, for instance when the recipient is a government or its armed forces, the EU, NATO and another intergovernmental organisation (Article 4).
When authorisation is needed, the Defence Transfers Directive offers the member states two options aimed at reducing the bureaucracy of individual transfer licenses: general and global transfer licenses.
The following presentation is only a rough sketch. For detail, you have to read the Directive.
***
General transfer licences
Member States shall publish general transfer licences directly granting authorisation to suppliers, established on their respective territories, who fulfil the terms and conditions attached to the licence, to perform transfers of defence-related products to be specified in the licence to a category or categories of recipients located in another member state.
The main aim of the general transfer license is to cover procurement by the armed forces of an EU member state or a contracting authority buying exclusively for the armed forces, but there are other grounds too (Article 5).
***
Global transfer licenses
Global transfer licences are granted for three years, and they can be renewed. The global transfer license covers an individual supplier of products to recipients in one or more EU member states.
The licensing member state determines in each global transfer licence the defence-related products or categories of products covered by the global transfer licence, as well as the authorised recipients or category of recipients (Article 6).
***
Individual transfer licences
If neither a general nor a global transfer license applies, the last resort is an individual transfer license (if any).
The member state grants an individual transfer licence to an individual supplier authorising one transfer of a specified quantity of specified defence-related products to be transmitted in one or several shipments to one recipient in one or more of the following cases:
a) where the request for a licence is limited to one transfer;
b) where it is necessary for the protection of its essential security interests, or for the protection of public policy;
c) where it is necessary for compliance with international obligations and commitments of Member States;
d) where a Member State has serious reasons to believe that the supplier will not be able to comply with all the terms and conditions necessary to grant it a global licence (Article 7).
***
The text of the Defence Transfers Directive, adopted by the European Parliament, is available here:
http://www.europarl.europa.eu/sides/getDoc.do;jsessionid=FE68FF66A91E1C708351395837549126.node1?pubRef=-//EP//TEXT+TA+P6-TA-2008-0603+0+DOC+XML+V0//EN#BKMD-29
Ralf Grahn
Monday, 19 January 2009
EU Defence Transfers Directive scope
The aim of new European Community (European Union) Defence Transfers Directive is to cut red tape, reducing waste and delays, when defence-related products are bought and sold within the European Union.
***
The Defence Transfers Directive was adopted by the European Parliament on 16 December 2008. The new Directive is still waiting for first reading (formal adoption) by the Council, but since the amendments have been agreed between the European Parliament and the Council, the EP text should be the same as the one to be published in the Official Journal of the European Union.
The Defence Transfers Directive, officially Directive 2009/.../EC of the European Parliament and of the Council on simplifying terms and conditions of transfers of defence-related products within the Community, is available here:
http://www.europarl.europa.eu/sides/getDoc.do;jsessionid=FE68FF66A91E1C708351395837549126.node1?pubRef=-//EP//TEXT+TA+P6-TA-2008-0603+0+DOC+XML+V0//EN#BKMD-29
***
Related blog posts
We have discussed matters relating to defence and security procurement, national security interests and treaty principles in earlier blog posts, which may be of interest to our readers:
· EU Procurement Directive: Secret contracts and security measures
· EU defence industry and market: Is there a future?
· EU Law: Defence equipment transfers
· EU Law: New Defence Procurement Directive
· EU Law: Defence Transfers Directive
***
Subject matter
Aim
The aim of the new Defence Transfers Directive is to make intra-Community transfers of defence-related products more compatible with the internal market, by simplifying rules and procedures.
Recitals 1 to 4 of the Directive explain the background:
(1) The Treaty provides for the establishment of an internal market, including the abolition between Member States of obstacles to freedom of movement for goods and services, and the institution of a system ensuring that competition in the common market is not distorted.
(2) The Treaty provisions establishing the internal market apply to all goods and services provided against remuneration including defence-related products but do not preclude Member States under certain conditions from taking other measures in individual cases where they consider it necessary to protect essential interests of their security.
(3) The laws, regulations and administrative measures in Member States concerning the transfer of defence-related products within the Community contain disparities, which may impede the free movement of defence-related products and may distort competition within the internal market, hampering innovation, industrial cooperation and the competitiveness of the defence industry in the European Union.
(4) The objectives pursued generally by the laws and regulations of Member States include the preservation of human rights, peace, security and stability through systems of strict control and restriction of exportation and proliferation of defence-related products to third countries as well as to other Member States.
***
Transfer and export policies
The member states of the European Union still decide on their transfer and export policies with regard to defence-related products.
Recitals 6 and 7 explain that the Defence Transfers Directive does not limit the transfer policies or export policies of member states:
(6) Those laws and regulations of Member States therefore need to be harmonised in such a way as to simplify the intra-community transfer of defence-related products in order to ensure the proper functioning of the internal market. This Directive only deals with rules and procedures as far as defence-related products are concerned, and does not consequently affect transfer policies of Member States.
(7) Harmonisation of those laws and regulations of Member States should not prejudice international obligations and commitments of Member States or their discretion as regards policy on the export of defence-related products.
***
Treaty derogations on security grounds
The member states can still evoke their (essential) security interests according to Articles 30 and 296(1)(b) and 296(1)(a) of the Treaty establishing the European Community (TEC), although the provisions and ECJ case law limit the scope of such derogations. In other words, exceptions have to be justified.
The derogations in Article 30 TEC include prohibitions or restrictions on imports, exports or goods in transit on grounds of public policy and public security.
Article 296(1)(b) TEC concerns the protection of essential security interests of a member state in connection with the production or trade in arms, munitions and war material (as defined by the Council on 15 April 1958).
Article 296(1)(a) allows a member state to withhold information, if the disclosure would be contrary to its essential security interests.
Recital 5 of the Defence Transfers Directive acknowledges that there are legitimate exceptions to the free movement of goods and services, on a case by case basis. The treaty derogations still apply, if the conditions are met:
(5) Such restrictions on the movement of defence-related products within the Community cannot be abolished generally through direct application of the principles of free movement of goods and services provided by the Treaty as those restrictions may be justified on a case by case basis in accordance with Articles 30 or 296 of the Treaty, which continue to be applicable by Member States provided their conditions are met.
***
First and second pillar
The Defence Transfers Directive is based on the first pillar (Community pillar), with its internal market rules. The sale of defence-related products within the European Community (European Union) is harmonised to some extent, but matters relating to the common foreign and security policy (CFSP), including the common security and defence policy (CSDP), belong to the intergovernmental second pillar of the European Union.
The fourth paragraph states that the minimum rules of the Directive are no obstacle to further intergovernmental cooperation in this field.
This is in line with the presentation given by Recital 28:
(28) Member States should remain entitled to pursue and further develop their intergovernmental cooperation, whilst respecting the provisions of this Directive.
***
Adopted text
Here is the text of Article 1 of the Defence Transfers Directive, as adopted by the European Parliament:
Article 1
Subject matter
1. The aim of this Directive is to simplify rules and procedures applicable to the intra-Community transfer of defence-related products in order to ensure proper functioning of the internal market.
2. This Directive does not affect the discretion of Member States as regards policy on the export of defence-related products.
3. The application of this Directive shall be subject to Articles 30 and 296 of the Treaty.
4. This Directive does not affect the possibility for Member States to pursue and further develop intergovernmental co-operations, whilst respecting its provisions.
***
Scope
The Defence Transfers Directive applies to intra-Community transfers of defence-related products. These have been listed in the Annex to the Directive.
Recitals 9 and 37 of the Directive express the desire to update the Annex list to be made identical in scope with the Common Military List of the European Union (CML):
(9) This Directive should cover all the defence-related products which correspond to those listed in the Common Military List of the European Union including components and technologies.
(37) The list in the Annex of defence-related products should be updated in strict conformity with the Common Military List of the European Union (CML).
-----
(Footnote 4 referred to the CML as published in 2007, but there is a later update, published OJEU 18.4.2008 C 98/1.)
***
Adopted text
Here is the adopted text of Article 2:
Article 2
Scope
This Directive applies to defence-related products as listed in the Annex.
***
Definitions
Some of the terms of the Defence Transfer Directive are defined in Article 3, but I let the adopted text speak for itself:
Article 3
Definitions
For the purposes of this Directive , the following definitions shall apply:
1) "defence-related product" means any product listed in the Annex;
2) "transfer" means any transmission or movement of a defence-related product from a supplier to a recipient in another Member State;
3) "supplier" means the legal or natural person established within the Community who is legally responsible for a transfer;
4) "recipient" means the legal or natural person established within the Community who is legally responsible for a receipt of a transfer in another Member State;
5) "transfer licence" means an authorisation by a national authority of a Member State for suppliers to transfer defence-related products to a recipient in another Member State;
6) "export licence" means an authorisation to supply defence-related products to a legal or natural person in any third country;
7) "passage through" means the transport of defence-related products through one or more Member States other than the Member State of dispatch and the Member State of destination.
Ralf Grahn
***
The Defence Transfers Directive was adopted by the European Parliament on 16 December 2008. The new Directive is still waiting for first reading (formal adoption) by the Council, but since the amendments have been agreed between the European Parliament and the Council, the EP text should be the same as the one to be published in the Official Journal of the European Union.
The Defence Transfers Directive, officially Directive 2009/.../EC of the European Parliament and of the Council on simplifying terms and conditions of transfers of defence-related products within the Community, is available here:
http://www.europarl.europa.eu/sides/getDoc.do;jsessionid=FE68FF66A91E1C708351395837549126.node1?pubRef=-//EP//TEXT+TA+P6-TA-2008-0603+0+DOC+XML+V0//EN#BKMD-29
***
Related blog posts
We have discussed matters relating to defence and security procurement, national security interests and treaty principles in earlier blog posts, which may be of interest to our readers:
· EU Procurement Directive: Secret contracts and security measures
· EU defence industry and market: Is there a future?
· EU Law: Defence equipment transfers
· EU Law: New Defence Procurement Directive
· EU Law: Defence Transfers Directive
***
Subject matter
Aim
The aim of the new Defence Transfers Directive is to make intra-Community transfers of defence-related products more compatible with the internal market, by simplifying rules and procedures.
Recitals 1 to 4 of the Directive explain the background:
(1) The Treaty provides for the establishment of an internal market, including the abolition between Member States of obstacles to freedom of movement for goods and services, and the institution of a system ensuring that competition in the common market is not distorted.
(2) The Treaty provisions establishing the internal market apply to all goods and services provided against remuneration including defence-related products but do not preclude Member States under certain conditions from taking other measures in individual cases where they consider it necessary to protect essential interests of their security.
(3) The laws, regulations and administrative measures in Member States concerning the transfer of defence-related products within the Community contain disparities, which may impede the free movement of defence-related products and may distort competition within the internal market, hampering innovation, industrial cooperation and the competitiveness of the defence industry in the European Union.
(4) The objectives pursued generally by the laws and regulations of Member States include the preservation of human rights, peace, security and stability through systems of strict control and restriction of exportation and proliferation of defence-related products to third countries as well as to other Member States.
***
Transfer and export policies
The member states of the European Union still decide on their transfer and export policies with regard to defence-related products.
Recitals 6 and 7 explain that the Defence Transfers Directive does not limit the transfer policies or export policies of member states:
(6) Those laws and regulations of Member States therefore need to be harmonised in such a way as to simplify the intra-community transfer of defence-related products in order to ensure the proper functioning of the internal market. This Directive only deals with rules and procedures as far as defence-related products are concerned, and does not consequently affect transfer policies of Member States.
(7) Harmonisation of those laws and regulations of Member States should not prejudice international obligations and commitments of Member States or their discretion as regards policy on the export of defence-related products.
***
Treaty derogations on security grounds
The member states can still evoke their (essential) security interests according to Articles 30 and 296(1)(b) and 296(1)(a) of the Treaty establishing the European Community (TEC), although the provisions and ECJ case law limit the scope of such derogations. In other words, exceptions have to be justified.
The derogations in Article 30 TEC include prohibitions or restrictions on imports, exports or goods in transit on grounds of public policy and public security.
Article 296(1)(b) TEC concerns the protection of essential security interests of a member state in connection with the production or trade in arms, munitions and war material (as defined by the Council on 15 April 1958).
Article 296(1)(a) allows a member state to withhold information, if the disclosure would be contrary to its essential security interests.
Recital 5 of the Defence Transfers Directive acknowledges that there are legitimate exceptions to the free movement of goods and services, on a case by case basis. The treaty derogations still apply, if the conditions are met:
(5) Such restrictions on the movement of defence-related products within the Community cannot be abolished generally through direct application of the principles of free movement of goods and services provided by the Treaty as those restrictions may be justified on a case by case basis in accordance with Articles 30 or 296 of the Treaty, which continue to be applicable by Member States provided their conditions are met.
***
First and second pillar
The Defence Transfers Directive is based on the first pillar (Community pillar), with its internal market rules. The sale of defence-related products within the European Community (European Union) is harmonised to some extent, but matters relating to the common foreign and security policy (CFSP), including the common security and defence policy (CSDP), belong to the intergovernmental second pillar of the European Union.
The fourth paragraph states that the minimum rules of the Directive are no obstacle to further intergovernmental cooperation in this field.
This is in line with the presentation given by Recital 28:
(28) Member States should remain entitled to pursue and further develop their intergovernmental cooperation, whilst respecting the provisions of this Directive.
***
Adopted text
Here is the text of Article 1 of the Defence Transfers Directive, as adopted by the European Parliament:
Article 1
Subject matter
1. The aim of this Directive is to simplify rules and procedures applicable to the intra-Community transfer of defence-related products in order to ensure proper functioning of the internal market.
2. This Directive does not affect the discretion of Member States as regards policy on the export of defence-related products.
3. The application of this Directive shall be subject to Articles 30 and 296 of the Treaty.
4. This Directive does not affect the possibility for Member States to pursue and further develop intergovernmental co-operations, whilst respecting its provisions.
***
Scope
The Defence Transfers Directive applies to intra-Community transfers of defence-related products. These have been listed in the Annex to the Directive.
Recitals 9 and 37 of the Directive express the desire to update the Annex list to be made identical in scope with the Common Military List of the European Union (CML):
(9) This Directive should cover all the defence-related products which correspond to those listed in the Common Military List of the European Union including components and technologies.
(37) The list in the Annex of defence-related products should be updated in strict conformity with the Common Military List of the European Union (CML).
-----
(Footnote 4 referred to the CML as published in 2007, but there is a later update, published OJEU 18.4.2008 C 98/1.)
***
Adopted text
Here is the adopted text of Article 2:
Article 2
Scope
This Directive applies to defence-related products as listed in the Annex.
***
Definitions
Some of the terms of the Defence Transfer Directive are defined in Article 3, but I let the adopted text speak for itself:
Article 3
Definitions
For the purposes of this Directive , the following definitions shall apply:
1) "defence-related product" means any product listed in the Annex;
2) "transfer" means any transmission or movement of a defence-related product from a supplier to a recipient in another Member State;
3) "supplier" means the legal or natural person established within the Community who is legally responsible for a transfer;
4) "recipient" means the legal or natural person established within the Community who is legally responsible for a receipt of a transfer in another Member State;
5) "transfer licence" means an authorisation by a national authority of a Member State for suppliers to transfer defence-related products to a recipient in another Member State;
6) "export licence" means an authorisation to supply defence-related products to a legal or natural person in any third country;
7) "passage through" means the transport of defence-related products through one or more Member States other than the Member State of dispatch and the Member State of destination.
Ralf Grahn
Friday, 16 January 2009
EU Law: Defence Transfers Directive
The European Parliament adopted, with amendments, the proposed Directive on simplifying terms and conditions of transfers of defence-related products within the Community on 16 December 2008 by 545 votes to 66, with 44 abstentions. The provisional text adopted is available at the web site of the European Parliament (P6_TA(2008)0603).
The vote was based on a report (A6-0410/2008) by the EP’s Committee on the Internal Market and Consumer Protection (IMCO), prepared by the rapporteur Heidi Rühle (Greens / ALE, DE).
The new Defence Transfers Directive is awaiting formal adoption by the Council.
After publication in the Official Journal of the European Union and entry into force, the member states have 24 months to transpose the provisions of the Defence Transfers Directive into national law, by adopting the laws, regulations and administrative provisions necessary to comply with the Directive. They then have an additional 12 months to apply the measures.
The Defence Transfers Directive applies to intra-Community transfers of defence-related products (Article 1) and these products are listed in the Annex (Article 2).
***
Framework
For pedagogic reasons, we position the new Directive within the treaty framework. This comprises the legal base, i.e. the powers to legislate, and the exceptions or derogations limiting the applicability of the Defence Transfers Directive.
***
Legal base
The Defence Transfers Directive is based on Article 95 (ex Article 100a) of the Treaty establishing the European Community (TEC).
Article 95 TEC allows legislative measures, adopted by co-decision, for the approximation (harmonisation) of member states’ laws, regulations or administrative actions with regard to the internal market objectives, namely the free movement of goods, persons, services and capital mentioned in Article 14 TEC.
-----
In the consolidated Treaty of Lisbon version of the Treaty on the Functioning of the European Union (TFEU) the corresponding Articles are 114 TFEU and 26 TFEU.
***
Generally applicable derogations
According to Article 1(3) of the Defence Transfers Directive its application is subject to Articles 30 and 296 TEC.
Quantitative restrictions on imports and all measures having equivalent effect are prohibited between member states according to Article 28 TEC (ex Article 30), and the corresponding prohibition on export restrictions is contained in Article 29 TEC (ex Article 34).
Article 30 TEC (ex Article 36) then offers member states the possibility to prohibit or restrict imports or exports on certain grounds. As exceptions to (derogations from) the normally applicable treaty rules (and objectives), they have to be interpreted narrowly.
These derogations or exceptions can still be called general in the sense that they can, in principle, be applied to all sorts of exports or imports, if justified:
Article 28 TEC
Quantitative restrictions on imports and all measures having equivalent effect shall be prohibited between Member States.
Article 29 TEC
Quantitative restrictions on exports, and all measures having equivalent effect, shall be prohibited between Member States.
Article 30 TEC
The provisions of Articles 28 and 29 shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of public morality, public policy or public security; the protection of health and life of humans, animals or plants; the protection of national treasures possessing artistic, historic or archaeological value; or the protection of industrial and commercial property. Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States.
-----
In the consolidated Lisbon Treaty, which may enter into force before the member states have transposed or begun to apply the Defence Transfers Directive, the corresponding provisions are found in the substantially unchanged Articles 34 to 36 TFEU, with the same grounds for exceptions:
· public morality
· public policy
· public security
· the protection of health and life of humans, animals or plants
· the protection of national treasures possessing artistic, historic or archaeological value
· the protection of industrial and commercial property
***
Specific derogations
The Defence Transfers Directive does not affect the existence of Article 296 TEC (ex Article 223), with its limitations on grounds of member states’ essential security interests connected with the trade in arms, munitions and war materials, although the new Directive tries to limit the application of such specific exceptions to the free flow of goods between the EU member states:
Article 296 TEC
1. The provisions of this Treaty shall not preclude the application of the following rules:
(a) no Member State shall be obliged to supply information the disclosure of which it considers contrary to the essential interests of its security;
(b) any Member State may take such measures as it considers necessary for the protection of the essential interests of its security which are connected with the production of or trade in arms, munitions and war material; such measures shall not adversely affect the conditions of competition in the common market regarding products which are not intended for specifically military purposes.
2. The Council may, acting unanimously on a proposal from the Commission, make changes to the list, which it drew up on 15 April 1958, of the products to which the provisions of paragraph 1(b) apply.
-----
In the consolidated Lisbon Treaty this provision appears as Article 346 TFEU, without substantive change.
***
Interpretative Communication on Article 296 TEC
The difficulties arising between the free movement objectives of the treaty, the essential interests of member state security connected with the production of or trade in arms, munitions and war material and the generous practices of member states to restrict the application on security and arms trade grounds are discussed in the Commission’s Interpretative Communication on the application of Article 296 of the Treaty in the field of defence procurement, Brussels, 7.12.2006 COM(2006) 779 final, available here:
http://eur-lex.europa.eu/LexUriServ/site/en/com/2006/com2006_0779en01.pdf
***
Arms, munitions and war material
The TEC and TFEU refer to the list of arms, munitions and war material drawn up by the Council on 15 April 1958. It can be changed on a proposal by the Commission by unanimous Council decision.
The Defence Transfers Directive applies to its Annex List of defence-related products.
Recital 37 of the Directive expresses the desire to update the list in the Annex of defence-related products in strict conformity with the Common Military List of the European Union (CML).
The latest version of the frequently updated CML was adopted by the Council on 10 March 2008 (equipment covered by the European Union Code of Conduct on Arms Exports) (updating and replacing the Common Military List of the European Union adopted by the Council on 19 March 2007) (CFSP), published OJEU 18.4.2008 c 98/1.
This desire is given legal force in Article 13(1) of the Defence Transfers Directive.
***
National concerns
Legal materials concerning the treaty background and reflecting the objectives of the Commission and the European Parliament can now be contrasted by an example of concerns expressed at national level, in this case the United Kingdom.
The UK House of Commons European Scrutiny Committee cleared the Defence Transfers Directive from scrutiny, after discussing national prerogatives, the continued scope for Article 296 derogations as well as the updating of the Annex list to define the scope of defence-related products for the purposes of the Directive:
http://www.publications.parliament.uk/pa/cm200809/cmselect/cmeuleg/19-ii/1913.htm
Ralf Grahn
The vote was based on a report (A6-0410/2008) by the EP’s Committee on the Internal Market and Consumer Protection (IMCO), prepared by the rapporteur Heidi Rühle (Greens / ALE, DE).
The new Defence Transfers Directive is awaiting formal adoption by the Council.
After publication in the Official Journal of the European Union and entry into force, the member states have 24 months to transpose the provisions of the Defence Transfers Directive into national law, by adopting the laws, regulations and administrative provisions necessary to comply with the Directive. They then have an additional 12 months to apply the measures.
The Defence Transfers Directive applies to intra-Community transfers of defence-related products (Article 1) and these products are listed in the Annex (Article 2).
***
Framework
For pedagogic reasons, we position the new Directive within the treaty framework. This comprises the legal base, i.e. the powers to legislate, and the exceptions or derogations limiting the applicability of the Defence Transfers Directive.
***
Legal base
The Defence Transfers Directive is based on Article 95 (ex Article 100a) of the Treaty establishing the European Community (TEC).
Article 95 TEC allows legislative measures, adopted by co-decision, for the approximation (harmonisation) of member states’ laws, regulations or administrative actions with regard to the internal market objectives, namely the free movement of goods, persons, services and capital mentioned in Article 14 TEC.
-----
In the consolidated Treaty of Lisbon version of the Treaty on the Functioning of the European Union (TFEU) the corresponding Articles are 114 TFEU and 26 TFEU.
***
Generally applicable derogations
According to Article 1(3) of the Defence Transfers Directive its application is subject to Articles 30 and 296 TEC.
Quantitative restrictions on imports and all measures having equivalent effect are prohibited between member states according to Article 28 TEC (ex Article 30), and the corresponding prohibition on export restrictions is contained in Article 29 TEC (ex Article 34).
Article 30 TEC (ex Article 36) then offers member states the possibility to prohibit or restrict imports or exports on certain grounds. As exceptions to (derogations from) the normally applicable treaty rules (and objectives), they have to be interpreted narrowly.
These derogations or exceptions can still be called general in the sense that they can, in principle, be applied to all sorts of exports or imports, if justified:
Article 28 TEC
Quantitative restrictions on imports and all measures having equivalent effect shall be prohibited between Member States.
Article 29 TEC
Quantitative restrictions on exports, and all measures having equivalent effect, shall be prohibited between Member States.
Article 30 TEC
The provisions of Articles 28 and 29 shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of public morality, public policy or public security; the protection of health and life of humans, animals or plants; the protection of national treasures possessing artistic, historic or archaeological value; or the protection of industrial and commercial property. Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States.
-----
In the consolidated Lisbon Treaty, which may enter into force before the member states have transposed or begun to apply the Defence Transfers Directive, the corresponding provisions are found in the substantially unchanged Articles 34 to 36 TFEU, with the same grounds for exceptions:
· public morality
· public policy
· public security
· the protection of health and life of humans, animals or plants
· the protection of national treasures possessing artistic, historic or archaeological value
· the protection of industrial and commercial property
***
Specific derogations
The Defence Transfers Directive does not affect the existence of Article 296 TEC (ex Article 223), with its limitations on grounds of member states’ essential security interests connected with the trade in arms, munitions and war materials, although the new Directive tries to limit the application of such specific exceptions to the free flow of goods between the EU member states:
Article 296 TEC
1. The provisions of this Treaty shall not preclude the application of the following rules:
(a) no Member State shall be obliged to supply information the disclosure of which it considers contrary to the essential interests of its security;
(b) any Member State may take such measures as it considers necessary for the protection of the essential interests of its security which are connected with the production of or trade in arms, munitions and war material; such measures shall not adversely affect the conditions of competition in the common market regarding products which are not intended for specifically military purposes.
2. The Council may, acting unanimously on a proposal from the Commission, make changes to the list, which it drew up on 15 April 1958, of the products to which the provisions of paragraph 1(b) apply.
-----
In the consolidated Lisbon Treaty this provision appears as Article 346 TFEU, without substantive change.
***
Interpretative Communication on Article 296 TEC
The difficulties arising between the free movement objectives of the treaty, the essential interests of member state security connected with the production of or trade in arms, munitions and war material and the generous practices of member states to restrict the application on security and arms trade grounds are discussed in the Commission’s Interpretative Communication on the application of Article 296 of the Treaty in the field of defence procurement, Brussels, 7.12.2006 COM(2006) 779 final, available here:
http://eur-lex.europa.eu/LexUriServ/site/en/com/2006/com2006_0779en01.pdf
***
Arms, munitions and war material
The TEC and TFEU refer to the list of arms, munitions and war material drawn up by the Council on 15 April 1958. It can be changed on a proposal by the Commission by unanimous Council decision.
The Defence Transfers Directive applies to its Annex List of defence-related products.
Recital 37 of the Directive expresses the desire to update the list in the Annex of defence-related products in strict conformity with the Common Military List of the European Union (CML).
The latest version of the frequently updated CML was adopted by the Council on 10 March 2008 (equipment covered by the European Union Code of Conduct on Arms Exports) (updating and replacing the Common Military List of the European Union adopted by the Council on 19 March 2007) (CFSP), published OJEU 18.4.2008 c 98/1.
This desire is given legal force in Article 13(1) of the Defence Transfers Directive.
***
National concerns
Legal materials concerning the treaty background and reflecting the objectives of the Commission and the European Parliament can now be contrasted by an example of concerns expressed at national level, in this case the United Kingdom.
The UK House of Commons European Scrutiny Committee cleared the Defence Transfers Directive from scrutiny, after discussing national prerogatives, the continued scope for Article 296 derogations as well as the updating of the Annex list to define the scope of defence-related products for the purposes of the Directive:
http://www.publications.parliament.uk/pa/cm200809/cmselect/cmeuleg/19-ii/1913.htm
Ralf Grahn
Wednesday, 14 January 2009
EU Law: Defence equipment transfers
Is the European Union causing all the red tape, or could there be other culprits?
***
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
***
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.
***
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.
***
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
***
Future posts will look at the contents of the proposed Directive on defence-related products.
Ralf Grahn
***
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
***
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.
***
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.
***
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
***
Future posts will look at the contents of the proposed Directive on defence-related products.
Ralf Grahn
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