Brussels, 06/12/2005 (Agence Europe) - Following the adoption by EU defence ministers of a new code of conduct to ensure more transparent, cross-border and competitive defence procurement, the Commission has decided to improve EU rules on national defence budgets, outlining areas where defence procurement will not be covered by the derogations set out in Article 296 of the EC Treaty. To this effect, it will be preparing an 'Interpretative Communication' and potentially a draft directive. Both measures were mentioned in the September 2004 Green Paper on how to open defence procurement to greater competition. During the Green Paper consultation process, the European Commission received 40 responses from the European Parliament, industry and 16 Member States. The European Commission commented that all the responses it had received welcomed the Green Paper and backed the idea of overcoming market segmentation and increasing competition in Europe through a series of new rules on public defence procurement.
In 2006, the European Commission will adopt an Interpretive Communication on the application of Article 296, clarifying when Member States can derogate from EU law requiring competitive procurement for specifically military purpose sand crucial to essential security interests. 'This will be a non-legislative measure that reduces the risk of legal misinterpretation and thus ensures better application of existing law by Member States. It will recall the principles governing the use of the derogation in the light of European Court of Justice case law and will clarify the criteria on which Member States have to prove when the conditions for the application of the derogation are met,' explains the Commission. In parallel, preliminary work will begin on a possible directive to coordinate procedures for defence procurement in cases where the derogation under Article 196 EC is not applicable or a Member State chooses not to take advantage of it. The Commission argues that the potential advantage of a new directive is that it would take into account the specific nature of the defence sector and introduce greater flexibility suitable for the military.
The Chief Executive of the European Defence Agency (EDA), Nick Witney, immediately welcomed the announcement describing it as 'a welcome complement to the Code of Conduct' drawn up by the EDA. In a press release, Witney added: 'The Commission is focussing on injecting more competition into areas of defence procurement not covered by Article 296 and on defining the application of the derogation. But where exemptions are invoked, which is the case today for more than 50% of the defence equipment purchases by EU governments, the EDA Code of Conduct will help to ensure that there is transparent and fair competition.'