The European Union should create a genuine single market for defence equipment. This is the aim of a directive on the transfer of defence-related products. On 16th December 2008, the European Parliament adopted a first-reading deal which strengthens provisions to guarantee the security of transfers, notably with respect to the final recipients of products or components, inter alia to ensure that arms and other defence-related products do not reach conflict zones.

In spite of coordinating efforts being undertaken between a limited number of Member States, the European defence market remains fragmented and divided. Twenty seven national licensing regimes currently exist. These regimes diverge widely in terms of procedure scope and required delays. Further, in all EU Member States, the export of defence related products (including comprehensive military equipments as well as sub-systems, components, spare parts, technologies) are subject to national licensing schemes.

This patchwork of schemes not only imposes a significant administrative burden on companies, it also includes significant lead times – up to several months. These burdens are out of proportion with actual control needs: license applications for intra-Community transfers are rarely rejected. Such divergences constitute a major impediment to industrial competitiveness, and a considerable obstacle to the emergence of a European Defence Equipment Market (EDEM) as well as the functioning of the Internal Market. According to a study carried out for the European Commission in 2005, the direct and indirect cost of obstacles to intra-community transfers amounts to €3.16 billion per year. The processing of licences has a direct cost of €434 million per year while indirect costs have been estimated at €2.73 billion/year.

The purpose of this proposal, therefore, is to reduce existing obstacles to the circulation of defence-related goods and services (products) within the Internal Market, and to diminish the resulting distortions of competition

Defence-related products: simplifying transfer conditions

The report by Heide RÃœHLE (Greens/EFA, DE) focuses on simplifying and harmonising the rules for granting licences to transfer military equipment from one country to another. There are currently 27 different regimes. This patchwork of rules prevents the free movement of equipment within the EU, whether for trade, repairs, modernisation or simply for trade fairs. The new proposal creates a European system of licences which will be uniform and applicable throughout the EU. Licences will nonetheless be granted by Member States, which will be free to impose sanctions if party to whom the licence is granted fails to observe the licensing conditions. Treaty Article 296 will continue to apply. The text also stipulates that the directive shall apply without prejudice to Treaty articles 296 and 30.

The text adopted by MEPs strengthens provisions to guarantee the security of transfers, notably with respect to the final recipients of products or components, inter alia to ensure that arms and other defence-related products do not reach conflict zones.

Prior authorisation

The transfer of defence-related products between Member States shall be subject to prior authorisation. No further authorisation by other Member States shall be required for the passage through Member States or for the entrance on the territory of the Member State where the recipient is located of defence-related products without prejudice to the application of provisions necessary for the protection of public security or public policy such as, inter alia, the safety of transport.

Public policy or public security

Member States may revoke withdraw, suspend or limit the use of transfer licences they have issued at any time, for reasons of protection of their essential security interests, of public policy or public security or for non-compliance with the terms and conditions attached to the licence.

The report was adopted with 545 votes in favour, 66 against and 44 abstentions.