Since the beginning of the European Union special rules and exemptions were applied to the armaments sector. For reasons of national security member states can deviate from EU regulations.

This is covered by Article 346 of the "Treaty on the Functioning of the European Union" (1.12.2009). This article is basically identical to Article 223 of the Treaty Establishing the European Economic Community (1957) and Article 296 of the Treaty Establishing the European Union (1992/1997):

"1. The provisions of the Treaties shall not preclude the application of the following rules:

(a) no Member State shall be obliged to supply information the disclosure of which it considers contrary to the essential interests of its security;

(b) any Member State may take such measures as it considers necessary for the protection of the essential interests of its security which are connected with the production of or trade in arms, munitions and war material; such measures shall not adversely affect the conditions of competition in the internal market regarding products which are not intended for specifically military purposes.

2. The Council may, acting unanimously on a proposal from the Commission, make changes to the list, which it drew up on 15 April 1958, of the products to which the provisions of paragraph 1(b) apply."

Nevertheless the influence of the European Union on arms trade has been increasing in the past decades.

In 1998 the member states agreed upon a legally non-binding Code of Conduct on Arms Trade in order to create a level playing field. Seven criteria to be evaluated during the licencing process for arms exports were established. Furthermore they agreed on the publication of an annual report on arms exports. The basis for the definition of the covered arms goods was the Military List agreed upon in 1958 in Rome.

In 2008 the Code was revised and transformed into a Common Position.

• Council Common Position defining common rules governing the control of exports of military technology and equipment (2008)
  • EU-Code of Conduct on Arms Exports (1998)

• User's Guide to Council Common Position (2009)
• Current version of the Common Military List of the European Union (2014)

In the year 2000 a Council Regulation on the control of exports of dual-use items and technology was adopted by the EU. For the first time the EU established an EU-wide binding regulation for some militarily relevant goods. The regulation has been revised in 2009. In 2014 the regulation was modified again, empowering the EU Commission to update the list of dual-use items by itself and to remove destinations from the scope of the Union General Export Authorisations.

• Current version of the Council Regulation setting up a Community Regime for the control of exports, transfer, brokering, and transit of dual-use items (2009)
  • older version (2000)

• Regulation on amending the Council Regulation of 2009 (2014)

 

Further initiatives in regard to regulating the defence market and arms exports were also taken by the EU: 

RCouncil Directive on the coordination of procedures for the award of certain works contracts, supply contracts and service contracts by contracting authorities or entities in the fields of defence and security (Richtlinie 2009/81/EG)

Council Directive simplyfying terms and conditions of transfers of defence-related products within the Community (Richtlinie 2009/43/EG)

Council Decision on support for EU activities in order to promote the control of arms exports and the principles and criteria of Common Position 2008/944/CFSP among third countries (Ratsbeschluss 2009/1012/GASP)

Council Regulation concerning trade in certain goods which could be used for capital punishment, torture or other cruel, inhuman or degrading treatment or punishment (Regulation (EC) Nr. 1236/2005)