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1 Eur. Pub. Private Partnership L. Rev. 33 (2006)
Defence Procurement: Commission Proposals and EDA Code of Conduct

handle is hein.journals/epppl1 and id is 37 raw text is: Defence Procurement 1 33 Defence Procurement Commission Proposals and EDA Code of Conduct Sally Roe and Christof Lessenich* I. Introduction 1. A large number of defence related contracts in the EU is currently not awarded in accordance with the general EU tendering rules. This is mainly because the Treaty allows Member State authorities to derogate from these rules where a contract affects their essential security interests (Art. 296 EC). Member States have in the past made widespread use of this exemption and the approach adopted has not always been consistent throughout the EU. 2. Several EU institutions have recently indicated that, in their view, the practice of awarding de- fence related contracts outside the general EU procurement rules contributes to the European defence market remaining fragmented along national lines. To address this issue, the Euro- pean Commission has in September 2004 pub- lished a green paper on defence procurement (the Green Paper) proposing new legislative measures in the field of defence procurement.1 The underlying aim of the proposals is the cre- ation of a common European defence equipment market (EDEM). The proposals include - the adoption of an interpretative communica- tion on the application of Art. 296 EC; and - the introduction of a defence specific procure- ment directive alongside the current procure- ment directives. 3. Some Member States and the European Parlia- ment have since supported the proposals put for- ward by the Commission. 4. In addition to the proposals contained in the Green Paper, the European Defence Agency (EDA) has recently published a voluntary code of * Sally Roe is a partner in the Engineering, Procurement and Con- struction Group at Freshfields Bruckhaus Deringer. Christof Les- senich is an associate in the Group. I COM (2004) 608. conduct on defence procurement, also aimed at increasing transparency and Europe-wide com- petition. 5. The initiatives by the European Commission and the EDA in the field of defence procurement would, if implemented, impact on the procure- ment of public private partnership contracts (PPPs) in the defence sector throughout the EU, some of whom have traditionally been pro- cured under the security exemption contained in Art. 296 EC. II. Interpretative communication 1. The European Commission has proposed an interpretative communication on defence pro- curement, the key aim being to clarify the scope of the security exemption in Art. 296 EC so as to achieve a more consistent application of this pro- vision throughout the EU. The feedback received from the majority of member states and many private organisations was positive. The Commis- sion has therefore decided to start working on an Interpretative Communication on the Applica- tion of Art. 296 of the Treaty in the Field of Defence Procurement. 2. The exact content of the communication is cur- rently difficult to predict. However, the Commis- sion has indicated that the communication will be mainly a repetition of the principles govern- ing Art. 296 EC established by the European Court of Justice (ECJ). In the Green Paper, the Commission has described these principles as follows. - The Member States have to examine the appli- cability of Art. 296 EC on a case by case basis. The applicability of Art. 296 EC is not auto- matic; - reliance on an exemption from the procure- ment rules is only possible where such an exemption is necessary to protect essential security interests; EPPPL 112006

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