DENMARK Law and Practice Contributed by: Thomas Maaberg Hansen and Peter Sand, Gorrissen Federspiel
The Executive Order on Defence and Security Certain contracts within the defence sector must be evaluated under the Executive Order on contracting entities’ awarding of certain construction, supply and service contracts in the defence and security industry (the “Executive Order on Defence and Security”) that implements the EU Defence and Security Procurement Directive. The special procurement regime applies to contracts in the fields of defence and security for: • the supply of military equipment; • the supply of sensitive equipment; • works, supplies and services directly related to such equipment; and • works and services for specifically military purpos - es or sensitive works and sensitive services. Article 346 of the TFEU The public procurement rules may be derogated from to the extent necessary and proportionate in the pro - curement of military equipment, provided that the derogation is justified on grounds of essential secu - rity interests and does not adversely affect the condi - tions of competition within the internal market civilian goods. 2.2 Contracting Authorities and Entities Subject to Defence Procurement Rules The Public Procurement Act The following entities (“contracting authorities”) are subject to the general framework: • state authorities; • regional or municipal authorities; • public law bodies; and • associations formed by one or more such authori - ties or one or more such bodies governed by public law. The Executive Order on Defence and Security When contracts fall within the scope the Executive Order on Defence and Security, contracting authori - ties are subject to a special set of rules. This also applies to public undertakings (undertakings where a contracting authority may exercise dominant influ - ence) and other entities that operate on the basis of special or exclusive rights granted by a competent authority.
ment Directive”) is implemented through Executive Order No 1077 of 29 June 2022, which applies the directive’s rules to certain defence and security con - tracts in Denmark. UN Security Council Resolutions Denmark gives effect to binding United Nations (UN) Security Council resolutions primarily through the EU sanctions framework. Where UN sanctions fall within EU competence, the resolutions are implemented through EU Council decisions and – where necessary – directly applicable EU regulations. Arms embargoes and other defence-related restrictions therefore form part of the legal framework applicable in Denmark. Where implementation falls outside EU competence, Denmark gives effect to the relevant UN measures through the Act on Certain Measures Under the Char - ter of the United Nations (Consolidated Act No 1079 of 2010), which allows the government to adopt imple - menting measures by Royal Order. 2. Procurement and Government Contracts in the Defence Sector 2.1 Defence Procurement Legislation As a member state of the EU, Denmark’s public pro - curement regulation is largely shaped by EU legisla - tion. Procurement of defence contracts is therefore generally regulated by three different frameworks: • the Public Procurement Act ( udbudsloven ); • the Executive Order on Defence and Security; and • Article 346 of the Treaty on the Functioning of the European Union (TFEU). Which set of rules applies depends on what is being purchased and what interests are at stake. The Public Procurement Act Generally, as with all other types of public procure - ment, defence contracts in Denmark are regulated by the general framework in the Public Procurement Act implementing the EU Defence and Security Procure - ment Directive.
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