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Defence procurement exemptions

Defence procurement exemptions

Outline of the Community (European Union) legislation about Defence procurement exemptions


These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Internal market > Businesses in the internal market > Public procurement

Defence procurement exemptions

Document or Iniciative

Commission interpretative communication of 7 December 2006 on the application of Article 296 of the Treaty in the field of defence procurement [COM(2006) 779 final – Not published in the Official Journal].


Internal market rules do not apply to defence acquisitions for trade in arms, munitions and war material; the legal basis for this exemption is Article 296. The scope of this exemption is, however, limited by the concept of “essential security interests” and by the list of military equipment mentioned in Article 296(2).

Any exemption authorised by Article 296 goes to the very heart of the fundamental principles and objectives of the internal market. Such exceptions should therefore be strictly confined to cases where Member States have no other choice than to protect their security interests nationally.

The list of military equipment mentioned in Article 296 was adapted in 1958 by Council Decision 255 / 58. The nature of the products on the 1958 list and the explicit reference in Article 296 to “specifically military purposes” confirm that only the procurement of equipment which is designed, developed and produced for specifically military purposes can be exempted from Community rules (Article 296(1)(b) EC).

Nevertheless, Article 296 can also cover the procurement of dual-use equipment for both military and non-military purposes, but only if the application of Community rules would oblige a Member State to disclose information prejudicial to its essential security interests (Article 296(1)(a)).

Military items included in the 1958 list are not automatically exempted from internal market rules. Any Member State seeking exemption under Article 296 must demonstrate that the exemption in question is necessary for the protection of its essential security interests, this being the only objective which may justify such an exemption. General references to the country’s geographical and political situation, history and alliance commitments are not sufficient.

The concept of essential security interests gives Member States flexibility in the choice of measures to protect those interests. It is essential for contracting authorities to assess each procurement contract with great care.

As guardian of the Treaty, the Commission may verify – with due regard to the sensitive nature of the defence sector – whether the conditions for exempting procurement contracts on the basis of Article 296 are fulfilled.

The Commission may also bring the matter directly before the Court of Justice if it considers that a Member State is making improper use of the powers provided for in Article 296.


The majority of defence contracts are exempted from internal market rules and awarded on the basis of widely differing national procurement rules. With a view to the establishment of a European defence equipment market, the 2004 Green Paper on Defence Procurement (link) launches a debate on how to improve transparency and openness of defence markets between EU Member States. In December 2005 the Commission announced two separate initiatives (link to COM(2005) 626 final): the adoption of an “Interpretative Communication on the application of Article 296 EC” (analysed above) and the preparation of a possible new directive on the procurement of defence equipment to which Article 296 exemptions do not apply.

This summary is for information only. It is not designed to interpret or replace the reference document, which remains the only binding legal text.


Suspension of import duties on certain weapons and military equipment

Suspension of import duties on certain weapons and military equipment

Outline of the Community (European Union) legislation about Suspension of import duties on certain weapons and military equipment


These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.


Suspension of import duties on certain weapons and military equipment

Document or Iniciative

Council Regulation (EC) No 150/2003 of 21 January 2003 suspending import duties on certain weapons and military equipment [Official Journal L 25 of 30.01.2003].


The Customs Union requires the consistent application of the Common Customs Tariff. It is in the interests of the Member States and the Community for the armed forces of the Member States to be equipped with the most technologically advanced weapons and military equipment available. Given that some of these weapons and military materials are supplied by third countries, it would be advisable to eliminate customs duties on these products, subject to certain conditions, and to set up common rules for these exemptions. This Regulation lays down the necessary conditions for the autonomous suspension of import duties on goods imported by or on behalf of the authorities in charge of defence in the Member States.

Suspension of duties.

The Regulation provides for the duties of the Common Customs Tariff applicable to weapons and military materials to be suspended, on condition that the goods are used by or on behalf of the armed forces of a Member State, for example in the territorial defence of Member States, participation in international peace keeping or other missions, e.g. the protection of European citizens. Annex I of the Regulation lays down the list of goods which are eligible for this exemption. Any material that is not listed in Article 2 and in the annexes is subject to customs duties, even if it is imported by the armed forces of a Member State.

Goods concerned.

3.The goods on which the duties are suspended are arms and ammunition, including parts and accessories, certain rare gases, explosives, detonators, certain photographic materials and certain chemical products.

The Regulation also applies the suspension of customs duties to imported parts, components and sub-assemblies that are to be incorporated into or fitted to the goods in the annexes or which are necessary for training or testing.

Private companies.

Private companies established in the EU will only be able to import the goods duty-free provided that that they manufacture the relevant military equipment, and that they supply final products to the authorities in charge of defence in the Member States. All other uses are liable for customs duties.



The request for entry for free circulation of these goods must be accompanied by a certificate issued by the competent authority of the Member State for whose armed forces the goods are destined. The model for this certificate is reproduced in Annex III to the Regulation. It is to be submitted to the customs authorities of the importing Member State with the goods to which it refers.

Military confidentiality.

To ensure military confidentiality, the Regulation lays down a specific administrative procedure for granting duty suspension, namely the authorities responsible for national defence may deliver the certificate instead of the customs services. The authorities must be notified accordingly.

Customs supervision.

The goods concerned are subject to end use conditions laid down by the Community Customs Code, i.e. their use will be supervised. Customs supervision of the end use ends three years after the date of release for free circulation.

For the purposes of customs supervision, the competent authority delivering the certificate or using the goods must notify the customs authorities of its Member State of any diversion of the goods from the use specified in the Regulation.

Exchanging information.

The names of the authorities authorised to issue the certificate must be communicated to the Commission by the Member States. The Commission will forward this information to the customs authorities of the other Member States.

The Member States must inform the Commission of the administrative implementation of the Regulation, and send information each year to the Commission on the number of certificates issued, together with the total value and gross weight of goods imported under the Regulation.


Act Entry into force Deadline for transposition in the Member States Official Journal
Regulation (EC) No 150/2003 31.1.2003 OJ L 25 of 30.1.2003