The CETA allows Canadian companies to access European markets under the same conditions as European economic operators.
However, derogations are provided for contracts related to the fields of security and defense.
" Nothing in this Chapter shall be construed to prevent a Party from taking any action or from not disclosing any information that it considers necessary for the protection of its essential security interests relating to the procurement:
(a) of arms, ammunition or war material;
(b) or to procurement indispensable for national security; or
(c) for national defence purposes"
A note to
Annex 19-B of the treaty
listing central government entities also provides that
" As far as procurement by entities in the field of defence and security is concerned, only non-sensitive and non-warlike materials contained in the list attached to Annex 19-4
are covered.
" by the treaty provisions.
In other words, contracts related to the fields of security and defense involving non-sensitive and non-military goods listed in Annex 19-4 cannot be subject to the exception in Article 19.3.
In summary, the security and defence exemption is limited to a small number of contracts.
Canadian companies can therefore bid for contracts in the field of security and defence involving goods listed in Annex 19-4 of the Treaty under the same conditions as European economic operators.
The same applies to the many contracts in security and defence related fields that are not covered by the provisions on security and defence procurement.
When prospecting for tenders, the Canadian company must ensure that the contract will not fall within the scope of the exception provided for in Article 19.3 of the CETA, i.e. that it is not a security and defence contract.
In order to do so, we must refer to the European definition of security and defence procurement (1).
The identification of this type of contract depends on the person who concludes it (2) as well as on its object (3).
If the conditions apply, it will be necessary to check that the public entities are not making use of the derogation provided for in article 19.3 by implementing the European preference (4).
1. The concept of security and defence procurement
The definition of a security and defence contract is derived from the European Directive of 13 July 2009 on the coordination of procedures for the award of certain works contracts, supply contracts and service contracts by contracting authorities or entities in the fields of defence and security (2009/81/EC) and is transposed into French law in article L1113-1 of the Public Procurement Code.
A defense or security contract is "a contract concluded by the State or one of its public establishments and having as its object :
1° The supply of equipment, including their spare parts, components or sub-assemblies, which are intended to be used as weapons, munitions or war material, whether they were specifically designed for military purposes or were initially designed for civilian use and then adapted for military purposes ;
2° The supply of equipment intended for security purposes, including their spare parts, components or sub-assemblies, and which involve, require or contain protected or classified media or information in the interests of national security;
3° Works, supplies and services directly related to equipment mentioned in 1° or 2°, including the supply of tools, testing means or specific support, for all or part of the life cycle of the equipment. For the application of this paragraph, the life cycle of the equipment is the whole of the successive states that it can undergo, in particular research and development, industrial development, production, repair, modernization, modification, maintenance, logistics, training, tests, withdrawal, dismantling and elimination;
4° work and services with specifically military purposes or work and services for security purposes that involve, require, or include protected or classified media or information in the interest of national security."
2. The authorities competent to award a security and defense contract
According to article L1113-1 of the Public Procurement Code, security and defense contracts are contracts awarded by the State or one of its public institution.
Local authorities are therefore not concerned by the provisions on security and defense contracts.
3. The purpose of security and defense contracts
Article L1113-1 of the Public Procurement Code limits to four the subjects on which security and defence contracts may be awarded. This list is strictly interpreted by European and French judges.
According to the case law, the qualification of security and defense contract is retained only when the military purpose of the product and services is characterized.
4. European preference
Pursuant to Article 19.3 of CETA, European contracting authorities may still be able to exercise the European preference provided for security and defense contracts.
This provision will appear in the contract notices according to this formulation:
"Economic operators from countries outside the EU or EEA:
In accordance with Article R 2342-7 of the Public Order Code, this procedure is not open to economic operators from countries outside the European Union or the European Economic Area."