Finland ties defence offsets to sovereignty

Finland’s approach to industrial cooperation (offsets) is driven primarily by security policy rather than economic return.

- The requirement and scope of industrial participation are always assessed on a case-by-case basis, the Finnish Ministry of Defence (MoD) said in an email response to Defence Nordic.

Any justification must meet the conditions set out in Article 346 of the Treaty on the Functioning of the European Union (TFEU), which allows member states to safeguard essential security interests related to the production or trade of war material, exempting such measures from standard internal market rules.

- This involves a comprehensive evaluation, with the starting point being the security of military supply and the availability of critical technology and associated expertise, the MoD said.

Defence Nordic has approached the Association of Finnish Defence and Aerospace Industries (PIA) for comment, but its secretary general, Tuija Karanko, was unavailable.

Avoiding ‘black box’ dependency

The central objective of Finland’s approach is to ensure what the MoD defines as national security of supply and operational independence. 

While reliance on foreign suppliers is accepted, policy aims to reduce vulnerability by building domestic capabilities in critical areas.

Industrial cooperation is used strategically to ensure Finland can maintain, repair and adapt key military systems, including in crisis conditions. The emphasis is on acquiring technology, know-how and system-level understanding, rather than prioritising local production alone.

Efforts are focused on selected critical capabilities, such as maintenance and system integration, to avoid dependence on “black box” solutions. At the same time, Finnish companies are integrated into international defence supply chains through long-term partnerships.

Both direct and indirect projects are accepted, the MoD said.

- The focus is on knowledge and technology transfer. In indirect industrial participation in particular, priority areas include artificial intelligence, cyber, advanced manufacturing, communications and radar technologies.

F-35 industrial participation

A direct example is the assembly and maintenance facility for F-35 fighter jet engines in Linnavuori, Nokia, Finland.

The facility, constructed by Defence Properties Finland, has been handed over to Patria. As a strategic partner to the Finnish Defence Forces, Patria is responsible for assembling, maintaining and servicing F135 engines.

An example of indirect participation is an industrial cooperation programme linked to Finland’s F-35 acquisition.

A consortium led by Iceye will develop advanced space-based and joint intelligence technologies, including intelligence, surveillance and reconnaissance (ISR) capabilities for military users such as the Finnish Defence Forces.

Finnish companies and academia have about 50 projects together in F-35 and Pohjanmaa programmes’ Industrial Participation.