Defence Ready? – Product law challenges in the defence sector on the path to defence readiness

I. The Challenge of Product Compliance

In addition to specific regulations for certain defence equipment, such as the requirement for authorisation for the manufacture and transport of weapons of war and the manufacture of weapons falling within the scope of the Weapons Act, product safety requirements may also need to be observed which apply across sectors, i.e. not specifically to defence equipment. This is because, depending on the defence equipment, the respective products may also qualify as machinery, radio equipment, AI systems, personal protective equipment, etc., to which specific product-related regulatory provisions apply. However, in the case of military  defence equipment, it should be noted that such equipment is in some cases explicitly excluded from the scope of the relevant legal acts. Although such exceptions are generally found in many product-related legal acts, they do not apply to all types of defence equipment, but are limited, for example, to specific purposes or security interests. It must therefore always be assessed on a case-by-case basis whether the specific product regulatory requirements apply to a particular piece of defence equipment or whether it is excluded from the respective scope of application. 

Regardless of whether the cross-sectoral legal acts or individual provisions contained therein are directly applicable to the defence equipment in question or not, contracting parties regularly impose technical requirements that are at a comparable level to the product regulatory provisions or, in effect, specify them. These include specific DIN or ISO standards, and in some cases also special technical standards set by the respective armed forces (such as NATO’s Allied Quality Assurance Publications), compliance with which must be demonstrated through certification. These specific standards are justified by the considerable interest of military personnel and the civilian population in the safe operation of defence equipment.

In any case, the harmonised product regulations must always be taken into account, including in the field of defence equipment. In terms of content, these rules set out a wide range of requirements and obligations for market participants, depending on the product group, in order to minimise the unintended risks to health and the environment posed by the products. These range from the abstract requirement for a ‘safe’ product to specific requirements and prohibitions, for example regarding the materials used, as well as pre-market and post-market obligations. As is customary, analysis, documentation, labelling, information, reporting and due diligence obligations are time-consuming and costly, and in the case of defence equipment, they must above all be reconciled with confidentiality interests.

II. Assessment of applicable product compliance regulations 

In order to place defence equipment used for military purposes on the market, it is therefore necessary – as with all other products – to first assess which product regulatory requirements apply in each individual case. To this end, in addition to the product classification as such, it must also be assessed whether the defence equipment in question is, by way of exception, excluded from the scope of the relevant legal acts as a whole or at least from individual provisions. 

The design, function and technology of defence equipment are, of course, diverse. In the case of defence equipment used for military purposes, one must also consider product classifications such as machinery, electronic equipment, radio equipment, personal protective equipment, AI systems, pressure equipment, or chemicals legislation. 

A number of the applicable legal acts provide for exemptions regarding the applicability to defence equipment. Such exemptions can be found, for example, in the following legal acts:

• Machinery Directive 2006/42/EC and Machinery Regulation (EU) 2023/1230

• Pressure Equipment Directive 2014/68/EU

• Regulation on personal protective equipment (EU) 2016/425

• Radio Equipment Directive 2014/53/EU

• AI Regulation (EU) 2024/1689

• RoHS Directive 2011/65/EU (hazardous substances)

• CLP Regulation (EC) No 1272/2008 and REACH Regulation (EC) No 1907/2006 (chemicals)

• Biocidal Products Regulation (EU) No 528/2012

• Directive 2014/30/EU on electromagnetic compatibility (at least in its German implementation; EMVG)

The reasons for this are likely to be complex. For example, in the AI Regulation, the exemption contained therein for AI systems used exclusively for military, defence or national security purposes is justified by the specific characteristics of Member States’ defence policies and by the fact that national security falls within the sole responsibility of the Member States. 

However, the scope of existing exclusions is not always clear-cut, but can be interpreted in different ways. For instance, some exclusions relate to specific products, such as weapons or machinery and equipment designed specifically for certain purposes (e.g. self-defence or military purposes). Other exclusions do not focus solely on the intended purpose, but require that essential security interests be affected in order to be excluded from the respective scope of application. The use of vague legal terms opens the door to differing interpretations. When, for example, security interests are considered ‘essential’ is ultimately a matter of the individual case, and national authorities and courts in each Member State are likely to assess this differently. The industry has therefore already pointed out that the sometimes unclear scope and inconsistency of the exclusions not only lead to uncertainty, but also result in the applicability of certain legal acts being incorrectly assessed in individual cases, thereby inadvertently leading to non-compliance, possibly even if only in individual Member States. Differing interpretations across Member States could also run counter to the free movement of goods. At the same time, compliance (which is, in this respect, beyond what is strictly required) with requirements for which exemptions actually apply is likely to stifle innovation potential in the defence sector. It would therefore be desirable to have more uniform or at least clearer exemptions for defence equipment in cross-sectoral product legislation, or specific guidelines for the defence sector that ensure a uniform interpretation across Europe.

III. Non-secure defence equipment

For much defence equipment (such as tanks or machine guns), the potential to cause harm is not merely inherent; it is their very purpose. Other defensive equipment (such as protective vests or helmets) is specifically designed to protect people and property from danger. For these reasons, too, almost all products used for military purposes in the defence sector, and the materials used in them, are of particular importance for the safety of military personnel, civilian staff and third parties – and, in an emergency, for the specific defence situation itself. For this reason, the proper functioning and safety of these products are essential. If they are not safe, i.e. dangerous or defective (outside their intended purpose), corrective measures must be taken (see 1.); in the event of damage, product liability claims may also arise (see 2.).

1. Product recalls and other corrective measures 

If defence equipment proves to be unsafe, proportionate corrective measures must be assessed and taken without delay. Whilst it also depends on whether the product in question falls within the scope of sector-specific regulations, obligations to act may also arise from general tort law as a duty to ensure safety, and failure to act may, under certain circumstances, also be relevant under criminal law. In any case, a distinction must be made as to whether the military products in question are sold and used solely in the B2B sector or, where applicable, are also used by consumers. It is also necessary to examine carefully which measures economic operators are permitted and required to take within the framework of existing contractual relationships, whilst taking into account confidentiality interests. 

This is because sensitive information regarding potentially defective defence equipment can have far-reaching consequences in a tense security situation.

A particular area of tension arises, above all, in the case of classic dual-use goods and other products which are sold in virtually identical versions for both military and civilian use. Public product recalls or other corrective measures relating to civilian product versions may, in individual cases, provide sensitive information regarding the military’s defence capabilities if it is known that the same products are being used in military equipment at the same time. Affected companies are therefore urged to manage necessary corrective measures with particular sensitivity, effectively and in a strategically sound manner.

2. Product liability

Strict liability for damages caused by defective products generally applies to military products as well. This includes not only malfunctions of autonomous or semi-autonomous systems in the defence technology sector, but also ‘simpler’ products such as body armour. The crux for this liability is, as usual, whether the product in question is ‘defective’, i.e. whether it meets legitimate safety expectations and (in future, explicitly) regulatory safety requirements. How these legitimate safety expectations are to be assessed in a military context is likely to be shaped to a significant extent by the user group and the context of use, and will therefore ultimately be a matter to be determined on a case-by-case basis depending on the product. With regard to defence equipment, the very purpose of which is to prevent harm, the new Product Liability Directive (EU) 2024/2853 also makes it clear that, when assessing whether a product is defective, consideration must also be given to whether the product in question actually fulfils this purpose.

Given the inherent danger of such products or their specific protective purpose against particular hazards, the legitimate safety expectations placed on defence equipment are likely to be particularly high as a rule. If the products (unintentionally) cause damage, product liability claims are therefore likely to arise frequently, although the specific defect and causality will always need to be established. The new Product Liability Directive, which must be transposed into national law by December 2026 and which provides for various relaxations of the burden of proof regarding defects and causality, will increase liability risks in this respect. Furthermore, the new disclosure obligations contained therein and the handling of conflicting confidentiality interests will be of particular importance, especially in the defence sector.

Even though strict liability for defective products cannot be contractually excluded in relations with third parties, it is particularly important for all parties involved in the defence sector to draft contracts in a legally sound manner to ensure an appropriate allocation of risk and to safeguard against recourse claims throughout the entire supply and procurement process. This applies also, and particularly, in view of the forthcoming massive tightening of product liability following the implementation of the new Product Liability Directive.

IV. Defence Readiness Omnibus as a solution?

In view of the changing security situation in Europe, the goal of achieving defence readiness by 2030 has now come into focus at EU level. Removing legal hurdles for the defence sector and creating the necessary flexibility to strengthen defence readiness – this is what the Defence Readiness Omnibus package promises. The package, initiated in the summer of 2025, is currently still going through the legislative process, but is considered one of the legislative ‘priorities’ for 2026 (Joint Declaration 2026 with reference to Omnibus V 2025/0172 (COD), 2025/0176 (COD), 2025/0177 (COD)).

The focus is particularly on speeding up authorisation procedures, easing public procurement law, and simplifying funding and foreign trade law. However, changes to product-related chemicals legislation are also planned (see COM(2025) 822 final). In this context, the European Commission explicitly refers to the existing sectoral exemptions for military purposes in chemicals legislation, in particular under the REACH Regulation. Furthermore, the exemption in the REACH Regulation relating to defence purposes is to be clarified, and the exemptions in the CLP Regulation and the Biocidal Products Regulation are to be aligned with this. Under the POP Regulation, defence considerations are to be given greater weight during the preparatory phase of bans, and exemptions from reporting obligations are to be introduced. However, the European Commission does not address further product-related regulations or provisions under product liability law.

The particular focus on chemicals legislation is sometimes justified by the fact that chemicals are an indispensable component of most defence systems, whilst at the same time a large proportion of these substances are subject to authorisation and restriction requirements under chemicals legislation (see, inter alia, the explanation in Commission Staff Working Document C(2025) 7190 final). The following are cited as specific features of the defence sector: (1) remarkably high operational requirements (no risk of failure in extreme environments), (2) long life cycles of defence products (often up to 50 to 60 years), (3) demanding and time-consuming requirements for certification, qualification and maintenance, and (4) aspects related to security information. With regard to chemicals, the Commission identifies the following problems: a) limited use of derogations by Member States; b) decision-making processes concerning restrictions and authorisations do not take defence readiness requirements into account in a timely manner, leading to uncertainty and increased risks regarding investment in the development and production of defence systems; c) time-consuming procedures and information requirements, involving a high administrative burden and the risk of sensitive information leakage. 

V. Conclusion

• Cross-sectoral product compliance regulations are of particular significance in the defence sector. Companies should therefore, in addition to contractual requirements, specifically examine and implement the applicability of cross-sectoral product compliance regulations and, in particular, their existing exemptions, and, where necessary, also reflect these in legally compliant contract drafting within supply chains.
• Overall, the product law requirements appear in some respects to be too inflexible and not tailored to the specific interests of the defence sector – the Defence Readiness Omnibus is an important first step.
• Defence equipment is of particular importance for physical safety. In the case of unsafe or defective products, corrective measures must therefore be taken; where damage is caused, strict liability for product liability also comes into play, which will be significantly tightened following the implementation of the new Product Liability Directive in December 2026. Due to the reduced burden of proof and disclosure obligations contained therein, particular attention will need to be paid to the specific circumstances of the defence industry and, in particular, to existing confidentiality interests.