Trouble in the neighbourhood: defence procurement in Estonia and Lithuania in times of war in Ukraine

Public Procurement Law Review

Authors: 

Mari Simovart – University of Tartu, School of Law

Deividas Soloveičik – COBALT

Triin Väljaots – Murula Lawfirm

Considering the immediate proximity of Russia and Belarus to the Baltic States, the impact of the Ukrainian war on defence procurement regulation in Estonia and Lithuania is smaller than might be expected. In Estonia, increased defence purchasing needs have largely been met by the already existing framework agreements and dynamic purchasing systems, taking advantage of the full amount potentially contracted for. The Lithuanian legislator, by contrast, took substantial action to specifically address possible threats to national security in public procurement by enabling contracting authorities to reject any tenderers or tenders that pose a threat to national security.

Introduction

Due to the bitter historic experience and special geopolitical position, both Estonia and Lithuania have always been particularly vigilant in the field of national security. Becoming Member States of NATO (The North Atlantic Treaty Organisation) in 2004 was therefore a crucial milestone for the Baltic countries. Nevertheless, the ever-present geopolitical threat in the region creates the need for a legislative framework designed to address the related concerns both in quieter times as well as in the current heightened security situation. While being painfully aware of the potential security threats already much earlier, the February 2022 Russian invasion of Ukraine created a new perspective for the security environment in Europe, particularly for countries bordering the invader, such as the Baltic States. Like other countries, Estonia’s and Lithuania’s response to the war and security threats was a rapid increase of military expenditure aimed at preparing for the worst-case scenario and scale up military capacities. This has obviously brought about significant increases in defence purchases. The escalation of war in Ukraine caused Estonia to recently renew its 10-year National Defence Plan and to increase its defence spending to 3% of Gross Domestic Product (GDP) per year to acquire new weapons systems, and to sharply increase the ammunition stocks. *368 ¹ This article provides a brief overview of current legal issues related to defence procurement in Estonia and Lithuania. We will firstly introduce the regulatory background, including the implementation of relevant EU law, and the practical arrangements for defence purchasing. Then, attention is given to the legal issues that have proved problematic in obtaining a flexible environment and which may create obstacles to security of information and of supply. In view of such obstacles, we submit proposals for certain legal measures.

The full article you can read in Public procurement law review journal (pages 367−381).