Although offset policy is widely employed across the world, there are three notable geographical exceptions.
The third exception to the widespread use of offset is Europe.
The aim was to evolve an open procurement system in which eventually offset would no longer be tolerated.
The official interpretation afforded by the Directive's Guidelines, indicates that offset would be swept-up in the procurement legislation.
This revised interpretation of Article 346 has serious ramifications for defense offset.
Firstly, a sizable proportion of offset activity is indirect, and thus represents commercial rather than defense production.
The second important impact from the revised interpretation of Article 346 is that direct offset will not be exempted from open competition, unless there is a threat to national security posed by foregoing local production.
Many European states procure advanced weapons from the US, and so extending the removal of offset to trade between European and non-European states will stifle the manufacturing and technology transfer benefits flowing from trade with America's huge defense economy.
leverage to extract offset concessions from vendors because defense
Another factor motivating offset corruption is that they have been
2002, the bidders' offset proposals accounted for only fifteen
procurement awards, (39) and this quality has led offset advocates to
40) If a vendor is unethical, though, the offset marketing may
of an offset as direct or indirect can be difficult, especially if it
that twenty-five percent of European defense offset transactions are