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Brussels, 16th December 2008

Barriers removed from EU market for defence equipment

The European Commission welcomes today’s support of the European Parliament for a new directive to overcome fragmentation of the European defence market. The directive on intra-EU transfers of defence-related products, once implemented, will alleviate obstacles to intra-community trade and eliminate most transit formalities, while preserving Member States’ control over their defence and security interests. The EP vote is based on an agreement reached with the Council.

Commission Vice-President Günter Verheugen, responsible for enterprise and industry policy, said: “Today’s approval brings us a decisive step forward towards setting up a true European defence equipment market. Member States will soon cease to consider other Member States as third countries when authorising the circulation of defence-related products within the EU. I am also very grateful that thanks to a collective engagement of all parties concerned the directive has been adopted in less than a year.''

Until now, national systems to control transfers of defence equipment have not distinguished between exports to third countries and transfers to other Member States. Applying heterogeneous and disproportionate national licensing systems hampers the security of supply between Member States, costs business over €400 million a year and curtails market opportunities in other Member States for competitive subcontractors from Small and Medium-Sized Enterprises (SMEs).

In order to change this situation, which is incompatible with the aims of the internal market and European security and defence policy, the Directive on intra-EU transfers of defence products will significantly simplify national licensing procedures thereby facilitating cross-border exchanges within the EU. This will help make defence industries more competitive and facilitate SME participation in prime contractors’ supply chains. The new legislation should enable Member States to meet military needs at lower cost, enhance security of supply for cross-border defence procurement and encourage industrial cooperation (for more information see Memo/07/546).

Transfers of defence products

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