Government and the business community as partners
Minister Herbert emphasises that a resilient Netherlands is only possible if the government and the business community work more closely together. The new law is intended to recognise and strengthen businesses as crucial partners in that resilience. For instance, defence and security companies will soon be able to apply for a declaration of suitability, enabling them to present themselves internationally as proven, reliable enterprises serving the Netherlands and its allies.
Compared with the original proposal, there is now greater emphasis on consultation and a tailored approach for each business. A designation for a specific upscaling or supply activity for the armed forces may only be granted in exceptional cases, based on pre-determined criteria. This should provide businesses with greater certainty regarding their activities and investments.
Responsibility for monitoring the new Act will lie with the Investment Assessment Bureau (BTI) of the Ministry of Economic Affairs and Climate Policy, which already has experience in this sensitive policy area.
The three pillars of the bill
1. A stronger position in foreign defence contracts
The Act enables the government to issue certificates of suitability to Dutch companies wishing to bid for foreign defence contracts and subsidies. This is intended to strengthen the sector’s international standing and maintain the Netherlands’ role as a reliable supplier. As part of this process, companies are screened, amongst other things, for undesirable foreign interference in their management structure.
2. Specific investment test to protect the sector
A sector-specific investment assessment will be introduced for companies that play a key role as suppliers to the armed forces. This is intended to prevent risks of essential defence interests being compromised by undesirable mergers, acquisitions or investments. The test is similar in structure to the existing Vifo Act, which has a broader scope for investment screening relating to sensitive technology.
3. The power to appoint as a last resort
Only in exceptional cases and for a limited number of companies does the law provide for the possibility of issuing directives, for example regarding the production and maintenance of defence equipment, or regarding cooperation between companies, research institutions and other parties. Examples include guidance on strategic stocks, the supply chain and the scaling up of production capacity. This is intended to help maintain strategic capabilities within the Dutch and European defence and security industries.
Next steps
The criteria, implementation and compensation will be set out in more detail in the new Resilient Defence Industry Act (WWDI). Following advice from the Council of State and subject to debate in the House of Representatives and the Senate, the Act may come into force in the course of 2027.
