The European Commission (EC) has launched infringement proceedings against five member states in order to ensure effective application of defence procurement rules.

The rules are aimed to allow companies to operate across borders and enable member states to get the best value for money.

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The EC has decided to send formal notices to Denmark, Italy, the Netherlands, Poland and Portugal for either not following or wrongly applying European Union (EU) rules on public procurement in defence and security markets.

The infringement procedures opened by the commission relate to the number of direct defence contracts awarded by Italy, Poland and Portugal to national suppliers in breach of the EU Defence Procurement Directive.

“The five member states are given two months to respond to the allegations put forward against them by the EC.”

The government body will send formal notices to Denmark and the Netherlands based on the concern that the nations have imposed unjustified offset requirements demanding compensation from non-national suppliers while acquiring defence equipment from them.

European Commission internal market, industry, entrepreneurship, and small and medium-sized enterprises (SMEs) commissioner Elżbieta Bieńkowska said: “Ensuring that public expenditure on defence is spent efficiently is in everyone’s interest, public authorities, industry, and most importantly our citizens.

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“If effectively implemented, the Defence Procurement Directive can help ensure that taxpayer money is well spent and improve the competitiveness of Europe’s defence industry, including its many SMEs.

“These efforts go hand in hand with boosting defence cooperation with the European Defence Fund that could generate a total investment in defence research and capability development of €5.5bn per year after 2020.”

The five member states are given two months to respond to the allegations put forward against them by the EC.

Launched in June last year, the European Defence Fund helps avoid unnecessary duplication of capabilities and expenditure in European defence markets by supporting collaborative projects in defence research, prototype development and joint capability acquisition.