Q1. What does the MoD consider to be the principal
mechanisms by which the Framework Agreement will deliver each
of the eight objectives set out in Article 1 of the treaty, and
by what indicators will the MoD assess the successful achievement
of these objectives?
A1.1 The principal mechanisms being considered
for each objective in Article 1 are set out below:
Article 1(a). The Framework Agreement
and subsidiary international agreements and arrangements will
establish a governmental framework to facilitate restructuring
of the defence industry in Europe. In general, MoD will use, or
amend, existing national regulations, procedures and policies
to deliver the objectives of these international instruments;
Article 1(b). The modalities of ensuring
timely and effective consultation over issues arising from the
restructuring of the European defence industrial base are still
under discussion. MoD envisages that there will be two principal
mechanisms: an international arrangement for governmental consultations;
and a voluntary code of conduct for encouraging industry to inform
governments in advance of any restructuring;
Article 1(c). The nations are examining
a variety of methods to achieve a security of supply for defence
articles and services. These include legally binding agreements,
specific contractual conditions for security of supply and option
licences. They are likely to be underpinned by a Memorandum of
Article 1(d). Transfers between participating
Partners and their industries of licensable military goods and
technology in the context of approved joint development and production
programmes will be simplified by the introduction of Global Project
Licences. Advance agreement by partners in a joint programme of
approved destinations for onward export to third countries of
jointly developed and produced military goods will provide a firmer
planning basis for defence exporters. The scope and requirements
of the Global Project Licence to enable national implementation
and the modalities for timely and effective consultation on proposed
export destinations are still under discussion;
Article 1(e). Exchanges of classified
information will be facilitated through the amendment of security
regulations and procedures and by the comprehensive promulgation
of these amendments throughout government and industry;
Article 1(f). Greater co-ordination
of joint research activities will be fostered by developing a
closer relationship between the Research Directors of the six
LoI nations, and at the project level by use of more flexible
arrangements, an example of which is the draft EUROPA MoU. (see
also A12 below);
Article 1(g). A number of mechanisms
to achieve this objective are outlined under Articles 37 to 41.
In addition the six Defence Ministries are committed by Article
42 to develop a mechanism by which each nation's IPR contract
provisions will be harmonised. This mechanism will take the form
of a further intergovernmental arrangement establishing common
practices. This will simplify IPR negotiations between the Parties
and their industries, and between the Parties themselves, where
co-operative programmes are concerned;
Article 1(h). As set out in Article
45-46, regular and comprehensive exchanges of documents and other
relevant information, and more systematic consultation will be
the key mechanisms. These and other mechanisms yet to be agreed
will be embodied in a MoU.
A1.2 In general, success will be measured
in two stages. In the short term by our success in establishing
a framework within which trans-national defence companies can
restructure and operate effectively. This will require the introduction
of the simplified export licensing procedures, security regulations,
etc. In parallel, this framework must allow the six governments
to broaden and deepen their equipment co-operation activities.
The longer-term measure of success will be the maintenance of
an efficient and effective European defence industry, and the
generation of harmonised requirements which ultimately lead to
increased co-operation in research, development, procurement and
Article 3 of the Agreement states that the Executive
Committee (ExCo) is responsible, inter alia, for executive-level
oversight of the Agreement, monitoring its effectiveness, and
providing an annual status report. Nations have yet to agree on
how best to fulfil this obligation. That said, the MoD believes
that the ExCo will have to develop performance indicators in each
of the six areas. For example, one indicator of success in handling
of technical information could be reduced negotiating periods
for both contracts and inter-governmental arrangements.
Q2. In what ways does the treaty differ from
the provisions contained in the "Letter of Intent" signed
by the six signatories on 6 July 1998? In negotiating the Framework
Agreement treaty, what particular provisions did the UK government
seek to have included or excluded?
A2.1 The Letter of Intent (LoI) was a statement
of political intent. It defined the scope and principles which
should guide the negotiations to develop a co-operative framework
within which the restructuring of European defence industry could
take place. Following signature of the LoI, expert working groups
were formed to examine the areas of security of supply; export
procedures; security of classified information; treatment of technical
information; research and technology; and harmonisation of military
requirements. They devised a number of practical measures to address
the concerns highlighted in the LoI, and these have been incorporated
into the legally binding Framework Agreement. The Agreement indicates
also the areas which need further work. A more detailed LoI/Framework
Agreement comparison by subject area is set out below:
Security of Supply. The LoI outlined
the strategy for achieving security of supply, which is now reflected
in the detailed legally binding provisions of the Agreement. Moreover,
the Agreement enshrines a commitment to consult in a wide variety
of circumstances when a nation's security of supply may be affected.
It also commits the Parties to develop further measures to achieve
security of supply.
Transfer and Export Procedures. The
Agreement sets out specific measures to facilitate transfers of
military goods and technology for approved joint development and
production programmes and subsequent exports of the resulting
military goods to jointly agreed destinations. The Agreement commits
Parties to undertake further work to simplify transfers of sub-systems
and components outside the framework of approved joint programmes
and also to streamline national licensing procedures in respect
of transfers to other Parties of nationally produced military
goods and technology.
Security of Classified Information.
The LoI identified the main areas that required revision, as agreed
with industry. Part 4 of the Agreement and the related Annex identifies
the specific changes required.
Defence Related Research and Technology.
The Agreement adds substance to the broad principles outlined
in the LoI and sets out a strategy for enhancing co-operation
in this field.
Treatment of Technical Information.
The Agreement expands upon the LoI's provisions by specifying
measures to provide for the release of government information
to the industries of other LoI nations, as it would to its own
industry; by waiving the requirement for industry to assign ownership
of technical information as a condition of restructuring; by clarifying
the use of government owned information; by waiving assignment
levies in respect of restructuring; and by committing to harmonise
IPR contract provisions and streamline the patent applications
Harmonisation of Military Requirements.
The Agreement builds upon the LoI, by setting out more detailed
objectives, and specific measures.
A2.2 The objectives and scope of the Framework
Agreement were dictated largely by the Letter of Intent. Accordingly,
the governments had achieved a broad consensus on the contents
of the Framework Agreement before the negotiations started. During
the Framework Agreement negotiations the only additional points
which the MoD sought to include, or emphasise, were:
In the field of export procedures,
the MoD ensured agreement of permitted export destinations would
be made by consensus decision by partners participating in a joint
Each party should treat the defence
industries of the other Parties as it treats its own industry
when considering the release of Government owned technical information.
This was achieved by Article 37.2.
Ownership of technical information
would be retained by industry and the sequestration of that information
by government would not be a condition of restructuring approval.
This was achieved by Article 38.1.
Adequate protection of commercially
sensitive informationwhich was deemed essential if we were
to retain the confidence of industry. This was achieved by Part
MoD is content with all of the treaty's provisions.
The UK government did not seek to exclude any of the provisions
in the Agreement sitting before Parliament.
Q3. How does the MoD envisage the Framework
Agreement being turned into more specific measures? Is the Agreement
likely to be the foundation for a single more specific treaty
later on, for example, or a series of ad-hoc measures? What is
the MoD's estimate of the timescales in which more specific measures
will be introduced? What progress has been made, or is in prospect,
in establishing the "Executive Committee" (envisaged
by Article 3) to take this work forward?
A3.1 The Framework Agreement contains a
number of specific practical measures that will benefit government
and industry. These can be implemented by translating them into
national regulations, procedures and policies. In those areas
where the treaty, indicates that further work is necessary, specialist
working groups will be formed to negotiate specific measures.
A3.2 There are no plans for another more
specific treaty in the future. The governments intend to examine
a series of ad hoc measures that may be recorded in a new agreement,
or an amendment to existing agreements/arrangements. For example,
the security provisions contained in the treaty will be reflected
in bi-lateral General Security Arrangements between the Parties.
For the purpose of harmonising the IPR provisions of the LoI nations,
a further governmental arrangement will be drafted by the working
group examining treatment of technical information. We expect
also to conclude new MoUs on the harmonisation of military requirements
and security of supply.
A3.3 The MoD estimates that a number of
the measures contained in the Framework Agreements can be implemented
within about a year. This is an ambitious target, and some of
the measures are very complex. Certain measures can be expected
to take longer; especially those that require further legally
binding agreements, changes in national laws and regulations,
or negotiation with industry.
A3.4 An Executive Committee (ExCo), established
under the auspices of the Letter of Intent, has already started
to take this work forward. On 26 September 2000 the ExCo approved
detailed work programmes to implement each area of the Framework
Agreement. A new ExCo will replace the existing ExCo once the
Framework Agreement enters into force. The new ExCo terms of reference
are being drawn up by the six nations. As the Agreement enters
into force when the first two nations have completed the ratification
process, the ExCo will initially have two members and four observers.
The observers will become members once they have ratified the
Agreement. This new ExCo will oversee the implementation of the
Q4. In what ways does the Framework Agreement
provide greater security for supplies from other countries than
is currently available?
A4 Industrial restructuring, rationalisation
and downsizing may lead to the closure of manufacturing capacity
in one country in preference to existing capabilities in another.
Governments need to accept that it is no longer possible to rely
solely on their national defence industry to meet the full range
of defence equipment requirements. Nations are becoming mutually
dependent. Consequently, security of supply must be sufficient
to give governments confidence that they can meet their future
military commitments in peacetime and in times of crisis and armed
This Agreement will reassure nations by committing
the Parties not to hinder unnecessarily the supply of defence
material to the other Parties; to consult on any merger or acquisition
of defence companies that may threaten security of supply; and
to work together to provide supplies from national stocks, to
ensure the correct prioritisation and allocation of supplies,
and, where necessary, to reconstitute supply facilities.
Q5. How does the MoD anticipate the provisions
of Article 12 of the treaty operating, including the procedures
for negotiating global project licences and the scope of such
licences? In what circumstances will individual governments be
able to withhold transfers of defence articles to another signatory
country, when (a) the item is needed for use by another signatory
and (b) when the end-user is a third-party country? What provisions
are there in the Framework Agreement to provide security for supplies
from another signatory country when such equipment transfers are
not linked to "co-operative armament programmes"?
A5.1 & 5.2 The MoD is still discussing
with its partners the scope and requirements of the Global Project
Licence to enable national implementation and the modalities for
the agreement of proposed export destinations by participants
in co-operative armaments projects. The conditions for granting,
withdrawing and cancellation of Global Project Licences will remain
the national responsibility of participants in the programme.
However, the commitments in the Agreement to prior consultation
and agreement of permitted export destinations by participants
is designed to ensure that potential concerns about destinations
are resolved by consensus agreement before Global Project Licences
are granted. Article 13 outlines the procedures that would be
followed in the event of significant changes in the internal situation
of a previously agreed export destination. Transfer of nationally
produced defence goods and technology to other Parties for their
own use or re-export to a third party country will remain subject
to national export procedures.
A5.3 Article 6 commits the Parties not to
hinder the supply of defence articles and services produced, assembled
or supported in their territory to the other Parties regardless
of whether such transfers are linked to co-operative armaments
programmes. This commitment is, however, subject to national licensing
procedures. Article 17 commits the Parties to make their best
efforts to streamline national licensing procedures for transfers
of nationally produced military equipment to another party.
Q6. Article 7, Para three of the treaty states
that individual countries may agree with "transnational defence
companies" the strategic activities and assets that will
be retained on national territory. What criteria will be used
in determining the meaning of such "strategic" necessity?
Will such criteria be determined multilaterally or unilaterally
by each individual government?
A6.1 The MoD keeps under review the defence
industrial capabilities that it wishes to see sustained in the
UK. In doing so, the department focuses primarily on defence related
considerations. In determining whether the retention of an indigenous
capability or technology was a strategic necessity the MOD's principal
criterion would be whether it was needed in order to guarantee
our ability to meet a critical operational requirement or unique
The Department of Trade and Industry has primary
responsibility for considering the government's position in relation
to the formation of transnational defence companies, but takes
full account of the MoD's views on the implications for competition
and national security. The intention of Article 7 is that before
the formation of a transnational defence company, each nation
should define which of the company's activities it considers to
be of strategic importance to retain on its own territory. This
will clearly involve consultation with our partners.
Q7. Why is it necessary to introduce provisions
on exports in the Framework Agreement, when the signatories are
already covered by the EU code of conduct on defence exports?
In what circumstances, and in what ways, could export policies
agreed for a specific "co-operative armament programme"
(under Article 13) differ from existing national export rules
or the EU code of conduct?
A7.1 The provisions on exports reflect the
Parties' understanding that permitted export destination for jointly
developed and produced military goods will be agreed by consensus
by all the participants in the programme and not solely by the
final exporting partner. Consultation on potential permitted export
destinations will take full account for the Parties' international
commitments including the EU Code of Conduct criteria.
A7.2 Article 13 provides for the agreement
by participating partners of permitted export destinations by
consensus. The discussions to achieve this consensus will take
into account national export control policies and the EU Code
of Conduct criteria with a view to ensuring consistency. In the
event that a proposed export destination was incompatible with
the national export control policy of a participating Party, then
it would obviously not be possible to achieve consensus on it
as a permitted export destination.
Q8. Under what circumstances will an individual
signatory to the Framework Agreement be able to prevent defence
exports to third parties? To what extent could such vetoes be
based on national (rather than multinational) criteria or different
national interpretations of the Framework's provisions?
A8.1 Article 13 provides for consensus agreement
of permitted destinations for exports of jointly developed and
produced military goods from approved programmes. Participants
in such a joint programme can prevent exports by withholding their
agreement to the inclusion of particular destination on the list
of permitted export destinations.
A8.2 Article 13 states that consultations
between participants in a joint development and production programme
on permitted export destinations will take into account, inter
alia, the participants' national export control policies.
The extent to which such consultations will be influenced by national
export control policies remains to be seen, We would hope to avoid
different national interpretations of the provisions of the Framework
Agreement. Article 60 commits the Parties to resolve any dispute
about the interpretation or application of the Agreement by consultation
or any other mutually acceptable method of settlement.
Q9. How do the provisions in the treaty on
security of classified information (Part 4) differ from the UK's
existing practices? Do the treaty provisions require changes in
existing procedures for protecting information obtained from third-party
countries, and (if so) what are the changes and have such countries
(including the US) given their approval to the provisions of Part
A9.1 Whilst retaining adequate security
protection, the provisions in the Agreement relating to classified
information have removed some unnecessary restrictions, particularly
in the area of international visits. Existing international procedures
require notification and acceptance of visits on a government-to-government
basis, which can take several weeks to process. Under the Agreement,
visits involving discussion or release of information classified
Confidential or above, but which has already been agreed by the
owning government as shareable, may be undertaken without government
clearance. Instead, details of the visit and visitor will be communicated
on a company-to-company basis.
Two other measures that will greatly assist
industry are the agreement that Confidential information may be
carried by commercial couriers, in exceptional circumstances;
and the approval of commercial encryption for transmission of
A9.2 The Classified Information provisions
apply only to national information belonging to one or more of
the LoI Parties. They do not apply to Classified Information belonging
to third party countries.
Q10. In what sorts of circumstances would
the MoD seek not to disclose "technical information"
to other signatories, or their defence industries, as envisaged
under Article 39 of the treaty? Does Article 37 Para 2 of the
treaty oblige the MoD to offer the technical information it may
vest in New-DERA also to research organisations in other signatory
A10.1 Article 39(a) provides for the disclosure
of Technical Information to the other Parties and their defence
industries solely for assessment purposes and sufficient to assure
themselves that the creation of a particular transnational defence
company is not against their overall defence interests. We do
not anticipate that the information necessary to discharge this
obligation will be of significant commercial value. It might include,
for example, quality assurance and logistic support information.
Each request for such information will be considered on its merits,
and it is not sensible, therefore, to speculate on those circumstances
when we might decline disclosure.
On Article 39(b), the information sought may
be for the purpose of commercial manufacture or development. In
such cases, agreement of the government concerned to the use of
that information may be dependent on some quid pro quo from the
recipient transnational defence company, eg rights to information
relating to future improvements to the equipment. Without such
a quid pro quo, the information would not be released.
A10.2 Article 39(b) commits the Parties
to the principle that defence companies within the LoI countries
should enjoy equal access to information necessary to formulate
a tender or execute a contract, subject to security and export
control regulations. The Framework Agreement does not require
disclosure of information owned by New-DERA, once floated, because
the information will not be government-owned. However, MoD will
retain sufficient rights in information owned by New-DERA, and
funded by MoD, to enable MoD to meet its international obligations,
and more relevantly in this case, to ensure that industry (including
TDCs) has available the necessary information to tender for or
to perform an MoD contract.
Q11. How would the role of the organisation
envisaged under Article 48 of the treaty differ from that of OCCAR?
What advantages or disadvantages of one or other organisation
absorbing the role of the other in due course have you identified?
A11. The role of the organisation envisaged
under Article 48 of the treaty does not differ from that of OCCAR.
Indeed, OCCAR is among the options being considered. Other possibilities
are use of a host nation (one nation procuring a specific product
for the other nations), and a European Armaments Agency (EAA).
The host nation procurement model remains a possibility but the
general opinion is that an organisation tailored to collaborative
defence equipment procurement would be preferable. Much work remains
to be done before the EAA concept is implemented and the size
and diversity of its membership raise questions about its applicability
to the Framework Agreement. On balance, the working group is likely
to recommend the OCCAR route, although this would require arrangements
to allow participation by non-OCCAR members, or expansion of OCCAR
to include all Parties to the Framework Agreement.
Q12. What are the expected benefits or disbenefits
of establishing the Research & Technology organisation envisaged
by Article 32 of the treaty, as compared with those of the programmes
of the WEU's Western European Armaments Group? What factors would
be likely to determine whether research is done under the auspices
of one organisation rather than the other? Why might the prospects
for successful collaborative research be better under the treaty
than previously under WEAG, and to what extent are these provisions
contingency measures in case WEAG is wound up?
A12. Article 32 does not assume the creation
of a new international Research & Technology (R&T) organisation
to either contract or manage R&T projects. The six nations
intend to consider whether or not existing organisations can be
used for this purpose. The Western European Armaments Organisation
(WEAO) Research Cell is one such organisation. A key factor is
the existence of an appropriate legal relationship between the
international organisation and all the six nations that will allow
central contracting on behalf of the nations. A new R&T MoU
named EUROPA has been drafted and provides a mechanism that will
embrace both the general R&T requirements of the Western European
Armaments Group (WEAG) as a whole, and the particular relationship
between the six LoI nations, using the WEAO Research Cell as the
primary contracting agency. It would not, however, prevent the
use of other contracting mechanisms on a project-by-project basis,
when these were considered more appropriate.
Q13. What are the MoD's plans for moving towards
holding international competition for its research work (in compliance
with Article 33 of the treaty)? To what extent would any such
move depend on reciprocal changes by the other parties to the
treaty? Is there scope for OCCAR to take on the R&T role envisaged
by Articles 31 and 32 of the Framework Agreement?
A13.1 Competition is already used very widely
in international research co-operation, particularly in existing
multilateral European fora, and will be firmly established as
the preferred method for letting R&T contracts under any new
R&T MoU agreed among the six LoI nations (including the EUROPA
A13.2 In international co-operation, all
the Parties concerned must be willing to adopt a common approach
to the use of competition. Article 33 states that competition
should be the preferred method. Competition is not mandatory,
however, if better value for money can be achieved by other means.
A13.3 Whilst we would envisage that OCCAR
might in the future, in some circumstances, be used as a contracting
agency by those Parties to the Agreement who are also Member States
of OCCAR, or have an appropriate legal relationship with OCCAR,
such decisions would be made on a case by case basis.
Q14. What progress has been made, or is in
prospect, in establishing the operational requirements "master
plan" envisaged under Article 46 of the treaty?
A14. We expect the cornerstone of the "master-plan"
will be a database structure, used for the exchange, storage and
analysis of equipment planning information. As well as being a
source of background information, this "master plan"
database would be used as a tool for identifying and progressing
potential opportunities for co-operative projects. The MoD has
the lead in defining the database structure and the level of detail
it should contain. The database will contain information from
across the whole range of military capability requirements. The
starting point is a database already developed by the harmonisation
working group, which will be augmented by features drawn from
WEAG and NATO documents.
Q15. What courses of action (and redress)
are available to the signatories in the event of a breach of the
provisions of the treaty by any of the other parties?
A15. Article 60 commits the Parties to resolve
any dispute about the interpretation or application of the Agreement
by consultation or any other mutually acceptable method of settlement.
The nations would clearly try to resolve any dispute about a possible
breach of the treaty by consultation. Legal redress may be of
academic importance when national security is at stake. Nevertheless,
if the dispute could not be resolved or was outside the scope
of Article 60 then there are a number of legal remedies.
When a state is injured by a breach of a treaty,
the injured state may demand a cessation of the breach; may request
guarantees of non-repetition; and may request "satisfaction",
for instance, national compensation or an official apology. Compensation,
in particular for any economic loss caused by the breach which
is suffered by a national of the injured state, and especially
where those nationals may be companies, may also be sought.
Restitution may also be sought from the offending
state, ie the re-establishment of the situation in which the injured
state would have been but for the breach. For instance, the wrongful
withdrawal by one Party of a licence generated under the treaty
allowing companies registered in another Party to provide certain
military goods, might be followed by a demand from the injured
Party to reinstate the licence and pay compensation for the economic
loss caused by the wrongful withdrawal.
If the breach of the treaty is "material",
then the provisions of the Vienna Convention on the Law of Treaties
1969 come into play. These provide for a variety of action including,
inter alia, suspension of all, or part, of the treaty, either
between the defaulting Party and the other Parties or between
all Parties. (A "material" breach in this context means
a repudiation of the treaty which is not sanctioned by the Vienna
Convention or a violation of a provision essential to the achievement
of the object or purpose of the treaty.)
A party may also respond to a breach by countermeasures,
by which the injured Party responds to a breach of a treaty by
refusing to comply with its own obligations. This is an unlawful
act, but loses this unlawful character since it is response to
a prior unlawful act. Another option is a retorsion, ie a response
to an unlawful act that does not involve any unlawful act. An
example of which might be the cancellation of a Ministerial visit.
Retorsion ensures that the offending Party is aware that its breach
of its obligations is being taken seriously.
Q16. What is the anticipated timetable for
ratification and implementation of the treaty and its separate
A16.1 The treaty was laid before Parliament
on 1 November and will complete the normal 21 sitting days around
the end of November. Following the Early Day Motion (numbered
1130, tabled 8 November), the Ponsonby Rule period will be extended
for a reasonable period in order to allow the Defence Committee
to report. The UK ratification procedures will take three to four
weeks. The MoD wishes to ratify the treaty as soon as possible,
not least because the treaty enters into force for the first two
nations 30 days after they have deposited their instrument of
ratification. France and Germany have informed us that they intend
to deposit their instrument of ratification by January. Our aim
is to ratify early in the New Year.
A16.2 As stated above in A3.3, the MoD estimates
that the implementation of many of the measures set out in the
treaty should be completed within 12 months. We recognise, however,
that other more complex measures, especially those requiring legislative
changes, could take significantly longer to implement.