AMOS will help the Czech defense industry

 14. 04. 2021      category: Events
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After two years of preparations, the Ministry of Defense launched the new AMOS project to support the export of the Czech defense industry. The ministry was inspired by similar institutions, especially in France, Sweden and Israel. The Agency for Intergovernmental Defense Cooperation (AMOS) became operational on 15 March this year. Aleš Vytečka was appointed its director by the Minister of Defense, and he will have a team of ten people at his disposal.

AMOS is to help Czech defense industry companies sell their products. The agency's activities will be focused on foreign states that want to follow the government-government purchasing method. Domestic companies that would like to use the services of the AMOS agency must then meet several basic conditions: The entity must do business in the Czech Republic, the entity must pay taxes in the Czech Republic, the entity must have a permit to trade abroad.

01 (1)Picture: After two years of preparations, the Ministry of Defense launched the new AMOS project to support the export of the Czech armaments industry. | Ministry of Defense of the Czech Republic

Individual applicants must then register for the program themselves. AMOS is not a government agency that will actively seek business opportunities on its own. It will not carry bank guarantees either. "It is a service organization that will prepare all documents, such as all the necessary certifications and bank guarantees for the successful sale of Czech products abroad directly to governments," Jan Pejšek, Director of Communications at the Ministry of Defense, explained.

Another condition is the conclusion of an intergovernmental agreement on military cooperation. The agency prepares it, submits it to the government, and after its signing, direct government-government trade is subsequently allowed. Companies that sign up for the program must notify themselves of any business opportunity. Thus, AMOS is, in a way, a production agency we so far missed and which can offer possibilities of trading individual companies in the form of government-government.

AMOS_schéma fungováníPicture: Mechanism of operation of the AMOS agency | Ministry of Defense of the Czech Republic

At a recent press conference organized by the Minister of Defense Lubomír Metnar, the need for such a tool was confirmed by the representative of the industry, the chairman of the Defense Industry Section of the Chamber of Commerce, Lubomír Kovařík. "The Czech defense industry is a sector with high added value, consisting not only of providing employment and payments to the national budget, but also of technological know-how. This segment is strongly export-oriented, with up to 90% of domestic production going abroad, which means that Czech defense products and technologies are of high quality and competitive. In some cases, however, Czech companies found that the purchasing state required a state guarantee, which was not possible in the case of the Czech Republic. Czech companies were thus at a disadvantage compared to foreign competitors who received state support. The creation of AMOS will eliminate this fundamental problem. We therefore perceive the state initiative in the form of the AMOS agency, which aims to increase the credibility and chance of Czech companies to successfully conclude transactions abroad very positively. We believe that this mechanism will significantly help companies in the Czech defense industry, not only in these difficult times, but also in the future," Lubomír Kovařík said to CZ Defense. He also said at the press conference that Česká zbrojovka will definitely join the program, because in the past the company has experienced that promising business did not turn out due to the absence of such an instrument.

Picture: At the press conference, Lubomír Kovařík stated that Česká zbrojovka will definitely join the program, because the company has experienced in the past that promising business did not turn out due to the absence of such an instrument. | (illustration photo) CZUB / CC BY-NC-ND

The Agency for Intergovernmental Trade Cooperation shall be included among other similar state entities of neighboring states. In addition to the above-mentioned France, Sweden and Israel, there are also Great Britain, the USA, Spain and Italy. The trading territory is mainly the countries of the European Union, but also countries on other continents. The first trade cases with the Philippines or Northern Macedonia are already being prepared. Given that the trade policy of Czech defence industry companies is pro-export (90% of trade goes abroad), it is another tool to support Czech industry.

The approximate costs for the operation of the AMOS agency were estimated at roughly 16 million crowns per year. However, the ministry expects a return very quickly, given the current sales reach 50 billion in the implementation of arms contracts. The basic benefits resulting from the activities of the AMOS agency include support for GDP growth, tax revenues and support for employment in the Czech Republic.

 Author: Jan Zilvar

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