Defense procurement: the Commission opens infringement procedures

On 25th January, the European Commission has sent letters of formal notice to Denmark, Italy, the Netherlands, Poland and Portugal for not applying – or doing so incorrectly – EU rules on public defense procurement.

According to the EU press release, the infringement procedures concern:

  • The direct award by Italy, Poland and Portugal of a number of defence contracts to national suppliers in breach of the Defence Procurement Directive. According to the Directive, contracting authorities are obliged to – except narrowly defined exceptions – award contracts by applying one of the procurement procedures laid down in Article 25 of Directive 2009/81/EC and make their intentions known by publishing a contract notice in the Tenders Electronic Daily (TED) database.

 

  • In the case of Denmark and the Netherlands, the Commission is concerned that the two countries have imposed unjustified offset requirements demanding compensation from non-national suppliers when purchasing defence equipment from them. Offset requirements are restrictive measures which hinder the free movement of goods and services and are incompatible both with the EU Treaty and with the correct transposition and application of the Directive.

Background: 

The Defence Procurement Directive (Directive 2009/81/EC) contains specific European rules for the procurement of arms, munitions and war material, related works and services for defence purposes. It also sets out a legal framework for the procurement of sensitive supplies, works and services for security purposes. 

The letter of formal notice is the first step in the infringement procedureThe Member State has two months to respond to the arguments put forward by the Commission.

If the Commission concludes that the country is failing to fulfil its obligations under EU law, it may send a reasoned opinion (Step 2): a formal request to comply with EU law. It explains why the Commission considers that the country is breaching EU law. It also requests that the EU country inform the Commission of the measures taken, within a specified period, usually 2 months.

If the Member State still does not comply, the Commission may decide to refer the matter to the Court of Justice (Step 3).

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