Judgment — ECLI:EU:C:2012:324
Date: 2012-06-07
Language of the case: Finnish
Court formation: Fourth Chamber
Subject matter: Right of establishment;Approximation of laws;Freedom to provide services
Procedure: Reference for a preliminary ruling
Origin: Finland

summary: An item which, according to the contracting authority, is to be used for specifically military purposes, but which, viewed objectively, is essentially no different from similar items used in the civilian sector cannot, through reliance on Article 296(1)(b) EC in conjunction with Article 10 of Directive 2004/18, be excluded from the procurement procedures prescribed in that directive. 2. Second criterion: protection of essential security interests 60. Even if the contested turntable were to be classified as a military product (first criterion for the application of Article 296(1)(b) EC), the referring court would still have to examine whether in the present case a derogation from the procurement procedures prescribed by European Union law appeared necessary for the protection of Finland’s essential security interests (second criterion for the application of Article 296(1)(b) EC). 61. In this regard, the Court has held that no more than reliance by a Member State on its security interests does not justify a derogation from European Union law. (38) 62. Certainly the relevant Member State is to be granted a wide discretion in the definition of its essential security interests; (39) this is shown by the use of the words ‘as it considers necessary’ in Article 296(1)(b) EC. Nevertheless, the national authorities bear the burden of proof to demonstrate that the conditions laid down by that provision are satisfied. (40) 63. As the Commission has rightly argued, the contracting authority should demonstrate in the present case that the derogation from the procurement procedures prescribed in Directive 2004/18 appeared necessary for the protection of Finland’s essential security interests (41) and was proportionate. (42) 64. It should be noted that any confidentiality requirement in relation to certain military information does not, in itself, prevent the use of a competitive tendering procedure for the award of a contract. (43) It is also possible in a procurement procedure as laid down in European Union law to take the necessary precautions for the protection of sensitive information. (44) 65. In the present case, according to the unrefuted claims made by InsTiimi, the contracting authority is said to have reported in detail on the item purchased and the operation of the turntable equipment in a Finnish daily newspaper. Under these circumstances, it would seem unlikely that there could have been a legitimate confidentiality interest on the part of the Finnish State in the procurement procedure. 66. Certain derogations from the procurement procedures prescribed by European Union law may nevertheless be justified by the fact that a Member State does not wish simply to disclose security-related information to foreign undertakings or undertakings controlled by foreign nationals, in particular undertakings or persons from non-member countries. A Member State can also legitimately ensure that it does not become dependent on non-member countries or on undertakings from non-member countries for its arms supplies. Both points were rightly highlighted by the Czech Government. 67. However, in the present case there is likewise — as far as can be seen — absolutely no evidence of such security concerns on the part of the contracting authority. But all this will ultimately have to be assessed by the referring court in a full evaluation of all the circumstances of the individual case. VI – Conclusion 68. In the light of the above arguments, I propose that the Court give the following answer to the question asked by the Korkein hallinto-oikeus: An item which, according to the contracting authority, is to be used for specifically military purposes, but which, viewed objectively, is essentially no different from similar items used in the civilian sector cannot, through reliance on Article 296(1)(b) EC in conjunction with Article 10 of Directive 2004/18, be excluded from the procurement procedures prescribed in that directive. 1 – Original language: German. 2 – See, for example, the case‑law on access for women to posts in the Member States’ armed forces (Case C‑273/97 Sirdar [1999] ECR I‑7403, and Case C‑285/98 Kreil [2000] ECR I‑69), on compulsory military service for men (Case C‑186/01 Dory [2003] ECR I‑2479), on VAT liability for armaments (Case C‑414/97 Commission v Spain [1999] ECR I‑5585), and on customs handling of military equipment (Case C‑284/05 Commission v Finland [2009] ECR I‑11705; Case C‑294/05 Commission v Sweden [2009] ECR I‑11777; Case C‑372/05 Commission v Germany [2009] ECR I‑11801; Case C‑387/05 Commission v Italy [2009] ECR I‑11831; Case C‑409/05 Commission v Greece [2009] ECR I‑11859; Case C‑461/05 Commission v Denmark [2009] ECR I‑11887; Case C‑239/06 Commission v Italy [2009] ECR I‑11913; and Case C‑38/06 Commission v Portugal [2010] ECR I‑1569). 3 – Specifically: ‘tiltable turntable’. 4 – Directive 2004/10/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts (OJ 2004 L 134, p. 114). 5 – Case C‑337/05 Commission v Italy (‘Agusta’) [2008] ECR I‑2173, paragraph 47. 6 – The wording of Article 10 of Directive 2004/18 has been amended by Directive 2009/81/EC of the European Parliament and of the Council 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 authorities in the fields of defence and security, and amending Directives 2004/17/EC and 2004/18/EC (OJ 2009 L 216, p. 76). However, this revised version only entered into force on 21 August 2009 and had to be transposed by the Member States by 21 August 2011 (cf. Article 72(1) and Article 74 of Directive 2009/81), with the result that it was not yet applicable to the present case. 7 – The Treaty of Lisbon entered into force on 1 December 2009. 8 – This decision was not published in the Official Journal of the European Communities, although an extract is reproduced in Document No 14538/4/08 of the Council of the European Union of 26 November 2008, which is publicly available on the Council’s website at < http://register.consilium.europa.eu/ > (last visited on 12 December 2011). The content of the list is also reproduced in a Commission answer to a parliamentary question (Answer of 27 September 2001 to Written question E‑1324/01 by Bart Staes MEP, OJ 2001 C 364 E, p. 85). 9 – Julkisista hankinnoista annettu laki. 10 – Suomen Puolustusvoimien Teknillinen Tutkimuslaitos. 11 – Pääesikunta. 12 – Market Court. 13 – Supreme Administrative Court. 14 – The Court established very early, in Case 6/64 Costa v ENEL [1964] ECR 585, that the measures are unilateral. 15 – The referring court mentions the Commission’s Interpretative communication of 7 December 2006 on the application of Article 296 of the Treaty in the field of defence procurement (COM(2006) 779 final), ‘the Commission Communication’). 16 – With regard to the plea of inadmissibility that it is obvious that there is no relevance to the decision, see inter alia Case C‑308/06 Intertanko and Others [2008] ECR I‑4057, paragraphs 31 and 32; Case C‑45/09 Rosenbladt [2010] ECR I‑9391, paragraphs 32 and 33; and Joined Cases C‑509/09 and C‑161/10 eDate Advertising [2011] ECR I‑10269, paragraphs 32 and 33. 17 – Case C‑355/97 Beck and Bergdorf [1999] ECR I‑4977, paragraph 22; Case C‑45/09 Rosenbladt, cited in footnote 16, paragraph 33; and Case C‑119/09 Société fiduciaire nationale d’expertise comptable [2011] ECR I‑2551, paragraph 21. 18 – See, in particular, Article 10 of Directive 2004/18 as amended by Directive 2009/81, Article 2 of Directive 2009/81, and the first sentence of recital 10 in the preamble to Directive 2009/81. 19 – Recital 2 in the preamble to Directive 2004/18; also the Court’s settled case‑law on the various directives coordinating public procurement law, see for example Case C‑380/98 University of Cambridge [2000] ECR I‑8035, paragraph 16; Case C‑507/03 Commission v Ireland [2007] ECR I‑9777, paragraph 27; and Case C‑337/06 Bayerischer Rundfunk and Others [2007] ECR I‑11173, paragraph 38. 20 – See, thus far, Article 2 EU and Article 3(1)(c) EC (now the first sentence of Article 3(3) TEU). 21 – Case C‑414/97 Commission v Spain, paragraph 21; Case C‑284/05 Commission v Finland, paragraph 46; Case C‑294/05 Commission v Sweden, paragraph 44; Case C‑372/05 Commission v Germany, paragraph 69; Case C‑387/05 Commission v Italy, paragraph 46; Case C‑409/05 Commission v Greece, paragraph 51; Case C‑461/05 Commission v Denmark, paragraph 52; Case C‑239/06 Commission v Italy, paragraph 47; and Case C‑38/06 Commission v Portugal, paragraph 63, each cited in footnote 2. 22 – See Case T‑26/01 Fiocchi munizioni v Commission [2003] ECR II‑3951. 23 – Admittedly, this does not mean that the list cannot be given a contemporary interpretation and application in order to take account of current developments. According to recital 10 in the preamble to Directive 2009/81, ‘the list is generic and is to be interpreted in a broad way in the light of the evolving character of technology, procurement policies and military requirements which lead to the development of new types of equipment … ‘ (see also the Commission Communication, cited in footnote 15, section 3). The list is thus applicable not only to the military products known in 1958, but also to those used today in the Member States’ armed forces, provided they can be classified under the categories described in the list. 24 – Case T‑26/01 Fiocchi munizioni v Commission, cited in footnote 22, paragraph 61. 25 – Classification in point 5 of the 1958 list requires the item to be ‘military fire control equipment’. A link to ‘fire control’ could, in principle, exist because the contested turntable equipment is used to simulate and practise ‘target acquisition’ in ‘electronic warfare’ and is ultimately intended to prepare ‘countermeasures against overhead reconnaissance’. However, no such connection with fire control was taken to exist by the parties at the hearing before the Court. 26 – Case C‑337/05 Commission v Italy (‘Agusta’), cited in footnote 5, paragraph 47, and Case C‑157/06 Commission v Italy [2008] ECR I‑7313, paragraph 26. 27 – See, for example, points 5 and 11 (‘military’) and point 14 of the 1958 list (‘insofar as they are of a military nature’). 28 – ‘[The 1958 list] includes only equipment which is designed, developed and produced for specifically military purposes’ (second sentence of recital 10 in the preamble to Directive 2009/81). 29 – Case C‑337/05 Commission v Italy (‘Agusta’), cited in footnote 5, in particular paragraphs 48 and 49; see also Case C‑157/06 Commission v Italy, cited in footnote 26, paragraph 27. 30 – See Case C‑337/05 Commission v Italy (‘Agusta’), cited in footnote 5, in particular paragraphs 48 and 49, where reference is made to the purpose defined by the contracting authority. 31 – See also recital 10 in the preamble to Directive 2009/81, according to which the 1958 list ‘includes only equipment which is designed, developed and produced for specifically military purposes’ (emphasis added); see also the Commission Communication (cited in footnote 15, section 3), which mentions ‘equipment which is of purely military nature and purpose’ (emphasis also in the original). 32 – Points 2(a), 4 and 9(a) of the 1958 list. 33 – Points 3, 5(a), 6, 8(b) and 10 of the 1958 list. 34 – Case C‑337/05 Commission v Italy (‘Agusta’), cited in footnote 5, in particular paragraphs 48 and 49. 35 – Case C‑475/99 Ambulanz Glöckner [2001] ECR I‑8089, paragraph 10; Joined Cases C‑482/01 and C‑493/01 Orfanopoulos and Oliveri [2004] ECR I‑5257, paragraph 42; and Case C‑382/08 Neukirchinger [2011] ECR I‑139, paragraph 41. 36 – Last sentence of recital 10 in the preamble to Directive 2009/81. Although this statement came from a legislative act which is not applicable to the present case ratione temporis, there is no obvious reason not to take account of the underlying evaluations in interpreting Directive 2004/18 in the relevant version for the main proceedings. In any case, recital 10 essentially makes clarifications regarding the meaning of the 1958 list, as it was to be understood until now. 37 – Similarly, the Court has held that a Member State may not rely on Article 296 EC in order to exempt from customs duties imports of dual-use material for both civilian and military use, ‘whether or not such material was imported exclusively for military purposes’ (see Case C‑294/05 Commission v Sweden, paragraph 53, and Case C‑387/05 Commission v Italy, paragraph 55, cited in footnote 2). 38 – Case C‑284/05 Commission v Finland, paragraph 47; Case C‑294/05 Commission v Sweden, paragraph 45; Case C‑372/05 Commission v Germany, paragraph 70; Case C‑387/05 Commission v Italy, paragraph 47; Case C‑409/05 Commission v Greece, paragraph 52; Case C‑461/05 Commission v Denmark, paragraph 53; Case C‑239/06 Commission v Italy, paragraph 48; and Case C‑38/06 Commission v Portugal, paragraph 64, each cited in footnote 2. 39 – Case T‑26/01 Fiocchi munizioni v Commission, cited in footnote 22, paragraph 58; see also the Commission Communication (cited in footnote 15), according to which Article 296 EC ‘has been acknowledged to grant to Member States a broad degree of discretion’ in deciding how to protect their essential security interests (section 4 of the Communication) and ‘it is the Member States’ prerogative to define their essential security interests’ (section 5 of the Communication). 40 – Case C‑414/97 Commission v Spain, paragraphs 22 and 24; Case C‑294/05 Commission v Sweden, paragraph 47; Case C‑284/05 Commission v Finland, paragraph 49; Case C‑372/05 Commission v Germany, paragraph 72; Case C‑387/05 Commission v Italy, paragraph 49; Case C‑409/05 Commission v Greece, paragraph 54; Case C‑461/05 Commission v Denmark, paragraph 55; Case C‑239/06 Commission v Italy, paragraph 50; and Case C‑38/06 Commission v Portugal, paragraph 66, each cited in footnote 2. 41 – See also the Commission Communication (cited in footnote 15, section 3). 42 – Case C‑337/05 Commission v Italy (‘Agusta’), cited in footnote 5, in particular paragraph 53, and Case C‑157/06 Commission v Italy, cited in footnote 26, paragraph 31; also the Commission Communication (cited in footnote 15, section 5), according to which it must be demonstrated why the non-application of the Public Procurement Directive in this specific case is necessary for the protection of an essential security interest. 43 – Case C‑337/05 Commission v Italy (‘Agusta’), cited in footnote 5, in particular paragraph 52, and Case C‑157/06 Commission v Italy, cited in footnote 26, paragraph 30. 44 – With regard to the confidentiality of classified information of the contracting authority, see in particular Articles 7, 20 and 22 of Directive 2009/81; with regard to the confidentiality of information forwarded by tenderers, see for example Article 6 of Directive 2004/18 and Article 6 of Directive 2009/81 and Case C‑450/06 Varec [2008] ECR I‑581.