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

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.


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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).

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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).

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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).




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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

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