Finnish Defence Forces – Appeal Case Regarding the Procurement of a New Small Arms family

Applex’ partner Juhani Matinlassi represented the Republic of Finland/Finnish Defence Forces before the Market Court in an appeal matter concerning the procurement of a new Small Arms family for the Finnish and Swedish Defence Forces.

The matter concerned the procurement of a new small arms family for the Defence Forces as well as the creation of a domestic production capability of the same. The matter was a rare Article 346 TFEU defence procurement matter involving essential interest of national security and the protection of the Security of Supply of both Finland and Sweden.

The procurement of the Small Arms family for the Finnish and Swedish Defence Forces is covered by a framework agreement, the parties to which are the Swedish Defence Materiel Agency FMV, the Finnish Defence Forces Logistics Command and Sako Oy. The purpose of the arrangement to be implemented is to strengthen defence cooperation between Finland and Sweden and joint preparedness. The contract in question was not put to tender under the rules of the EU Defence and Security Procurement Directive 2009/81/EC due to the protection of essential interests of national security and the contract was awarded directly to a domestic Finnish contractor. The main grounds for direct procurement were the requirements of military Security of Supply, which were estimated to require national production and maintenance capabilities of small arms to remain in Finland under all conditions. A German arms manufacturer appealed the procurement decision to the Market Court, which subsequently rejected the appeal on 17 May 2024. The main issue in the proceedings was if such an exemption from the EU law was admissible.