Brussels, 26/11/2007 (Agence Europe) - The departments of Commissioners Gunter Verheugen and Charlie McCreevy have long been working the three parts of the arms package to be adopted at last by the European Commission on Wednesday 5 December, somewhat later than planned. The package comprises a communication outlining action already taken and future action to consolidate a European defence industry and technology and boost the competitiveness of the defence industry in Europe. The text, following on from an initial communication published in 2003, is accompanied by a draft directive on the coordination of public defence and security markets and a draft regulation on intra-Community transfers of defence equipment and defence equipment components.
After attempting to clarify the definition of equipment covered by Article 296 of the Treaty in order to avert abuse of this derogation to competition rules, the European Commission continues its aim of opening defence markets up to greater competition by proposing a common framework for the award of public contracts. The draft directive, to be submitted to the College of Commissioners in a week's time, covers the markets for work, supplies and services for defence (weapons, munitions, war materials, components and products used for training and testing) and security (protection against terrorism and organised crime, border protection and crisis management missions). The draft directive foresees the following thresholds: €137,000 for non-defence supplies and services; €211,000 for defence; and €5,923,000 for work contracts. All contracts whose value is equal or above these thresholds will have to respect the rules set out in the directive. The rules foresee a negotiated procedure with publications to ensure the level of flexibility required in this type of market. Restricted procedures and competitive dialogue may also be used. Open procedures involving the supply of contract specifications to any economic operator requesting it is felt to be unsuitable in view of the confidentiality requirements of such markets. The directive also takes into consideration special requirements concerning the security of information and the security of supplies.
The draft regulation on intra-Community supplies of equipment and components sets up a licensing system which proved particularly tricky to design from a different point of view. Vice-President Verheugen has stressed that the draft regulation will be unveiled on Wednesday 5 December, but it has given rise to a raft of concerns in certain member states both in terms of the mechanisms and in terms of the legal impact. The legislation is being kept secret right up until publication due to its highly controversial nature. It will introduce two types of licence - the first covering a range of equipment for a specified country and the second covering the transfer of certain goods and components to a number of countries. In practice, the first type will lessen the administrative burden on companies when intra-Community exports aim to equip member states' armies; and the second will facilitate trade in components and sub-systems between the different industrial sites of the same company. The introduction of this system, which has been on the drawing board for more than a decade, has the backing of ASD, the AeroSpace and Defence Industries Association of Europe. Over and above lightening the administrative burden, it could also favour the development of poles of competence in Europe. Some large countries, like the United Kingdom, view the new legislation with a favourable eye but others (Germany and Italy tend to be quoted) have reservations due to the danger of goods being re-exported to undesirable destinations (which is already occurring at the moment). With some difficulty, France, whose arguments are far more complex, is trying to establish an opposition front with enough clout to scupper the regulation. French opposition may, however, diminish due to lack of allies and because the latest draft of the text meets some of its concerns about monitoring re-exports to outside the EU.
At the ESC 07 conference a few days ago organised by CEIS and Copura in Brussels, Commission Vice-President Gunter Verheugen said that the Commission had no intention of gaining powers in the field of arms exports. 'I will make it clear in Council and the EP,' he said, adding that the package he would be unveiling on 5 December would 'facilitate the transfer and increase the security of supply and trust between member states'.
At the same conference, Bertrand Carsin, public contracts policy director at the European Commission, discussed the need to establish a more coherent and efficient framework to bolster company competitiveness. He explained that this was the aim of the draft directive, which had been subject to a broad consultation process. Responding to a question, he said that the directive did not include any Community preference mechanisms and would therefore ensure the possibility of companies from outside the EU participating in public defence and security contracts. Bertrand Carsin said the directive had been worked on for five years now, and he hoped it could be adopted within a reasonable timeframe and without major changes. Asked by a French army controller about the level of internal expertise at the European Commission for managing the system it hopes to introduce with this new regulation, Director of DG Enterprise Paul Weissenberg said, without attempting to deny shortfalls, that that a simple solution would be to arrange the exchange of expertise, personnel and information among the military, defence ministries and the Commission. (O.J.)