European Defence Agency launches Code of Conduct for Offsets

EDA launches a groundbreaking approach to offsets on 1 July with the implementation of the Code of Conduct on Offsets. First, the Code introduces much needed transparency to offset agreements, which up until now has often been lacking. To this end, an offset portal has been launched on the EDA’s website, where for the first time ever, 26 countries that signed up to the Code, publish information on their national offset policies and practices, including national regulations and guidelines, offset requirements criteria and modalities. Second, the Code provides for the evolving use of offsets to help develop industrial capabilities fully consistent with the objectives of the EDTIB Strategy; namely an industrial base that is capability driven, competent and competitive. As a result, the Code will help shape Europe’s defence technological and industrial base, notably by facilitating the development of globally competitive Centres of Excellence and avoiding unnecessary duplication. Last, the Code introduces a 100% cap on offsets. Consequently, subscribing governments will neither request nor accept offsets exceeding the value of the relevant procurement contract. This is a crucial enabler in the process to reduce reliance on offsets. Similarly the Code’s provision for mutual abatements will help cut down reciprocal offset obligations.