The government of Lithuania recently approved the draft Bill on the Domestic Defence and Security Industry proposed by the Ministry of National Defence to expand the opportunities for industry growth in order to strengthen national security, defence technology advancement, and Lithuania’s competitiveness in the international defence industry arena.  

The draft bill proposes improvements to legislation regulating the development of the security and defence industries, aiming for a market economy model of sector growth.

The bill introduces modifications to the to-date fragmented Lithuanian defence and security industry policy to the advantage of a new design of regulation that will highlight the role of the security and defence industry in the context of national security. 

It is proposed that the government, in an effort to ensure the core of Lithuania’s national security interests, approve a list of defence equipment and weaponry necessary for developing the priority capabilities of the Lithuanian Armed Forces, which would show clear directions for the development of the Lithuanian security and defence industries and allow industry entities to define for themselves which military technologies and equipment deserve investment.  

It is anticipated that additional incentives created for security and defence companies in Lithuania will facilitate the development of more high-demand products by the country’s industry as a result of more efficient cooperation between academia and business.

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The new bill also lays the foundation for industrial cooperation: Lithuanian manufacturers will be offered a chance to become involved in the priority defence equipment and weaponry procurements at the National Defence System. It regulates that, in the area of industrial cooperation, a part of foreign defence equipment manufacturers or suppliers will have to implement their contractual obligations through the Lithuanian entities of the economy.

The bill provides for additional instruments of financing to increase investment in the area of advanced defence technology, scientific research, development, and manufacturing; acquisition of products necessary for national defence developed by the Lithuanian defence industry; and to enable the state to initiate orders to develop concrete products required for national security purposes.

The bill on Defence and Security Industry is tabled together with corresponding amendments to the Law on Public Procurement in Security and Defence and the Law on Control of Weapons and Ammunition to ensure more flexibility with regard to national security interests.  

The design and development of defence technology in Lithuania would also allow more efficient assistance to Ukraine in its self-defence against Russian aggression. 

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