Finland 100% offset obligation to the country’s F/A-18 replacement could increase the cost by USD1 billion.

Thai Military and Asian Region

Finland’s NAO publishes assessment of Hornet replacement offset approach

Guy Anderson, London – IHS Jane’s Defence Weekly

22 December 2016

Finland’s National Audit Office (NAO) has argued that the addition of a 100% offset obligation to the country’s F/A-18 Hornet fighter aircraft procurement could theoretically increase the cost of the procurement by USD1 billion.

The authority also argued in a 20 December report on industrial participation agreements associated with the programme that a 100% obligation is unlikely to be feasible given obligations arising under European defence procurement directive 2009/81/EC of 2011.

Under the directive it is arguably that offset may only be applied to defence programmes on grounds of national security under Article 346 of the Treaty of the Functioning of the European Union (TFEU), and that economic considerations may not be taken into consideration.

Original post janes.com

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