Brussels, 21/06/2007 (Agence Europe) - “What progress has been made on the draft directive on defence procurement not covered by the exemption under Article 296 (of the European Treaty)?” Arlene McCarthy (PES, UK) asked European Internal Market Commissioner Charlie McCreevy, on behalf of the MEPs who had put down an oral question to the Commission on this issue. Mr McCreevy reviewed the work being carried out by the Commission which will lead to the presentation of a legislative package for the defence sector this autumn. This package will comprise: - a directive on defence procurement which will no longer be excluded from European rules under the exemption provided for in Article 296 of the European Treaty (see EUROPE 9323); - a regulation on intra-Community transfer of military equipment; - and a communication on the defence industries.
Mr McCreevy said his staff were finalising the impact study which would provide more information on the expected impact, including the social impact, of the initiative on the market. He said that the draft directive would modify some public procurement rules to suit the “specific nature” of the defence sector: “Of course, the basic principles of public procurement rules will have to apply, but defence has specific characteristics in terms of security of supply, security of information and the need for a negotiated procedure”.
Offsets. In the defence sector, a member state can impose “offsets” on non-national contractors, requiring them to invest in the country. These offsets are direct when they are linked to the subject of the contract, and indirect when they are in areas not closely related to the contract. Mr McCreevy said these offsets were “legally problematic, politically controversial and economically debateable”. Indirect offsets “must comply with European law, even though they relate to defence contracts exempted under Article 296,” he added. He noted that tackling this problem through the future directive “would only cover the 'Community' part of the defence market and would ignore indirect offsets for contracts exempted under Article 296”. (mb)