Netherlands Proposes Powers to Force Private Firms to Manufacture Military Goods
The Hague, Wednesday 8 July 2026
Proposed on 8 July 2026, new Dutch legislation enables the government to compel private companies to manufacture military supplies and requisition their stocks during national emergencies.
From Golden Shares to Sovereign Mandates
Just days ago, on 3 July 2026, the Dutch military made headlines by securing a “golden share” veto option in drone software developer Intelic to prevent foreign acquisition [1]. While that transaction represented a targeted, case-by-case intervention [1], the Dutch government has now unveiled a far more comprehensive, systemic strategy to protect its sovereign industrial base. On 7 July 2026, the Dutch Council of Ministers formally approved a new legislative proposal designed to dramatically strengthen and safeguard the nation’s defence and security technology sector [2].
Emergency Powers and Production Directives
This landmark bill, the “Wet weerbare defensie-industrie” (WWDI), was submitted to the Council of State for advisory review on Wednesday, 8 July 2026, by the Minister of Economic Affairs and Climate, Heleen Herbert [2][3][4]. The draft law marks a historic shift in how the Netherlands regulates its critical supply chains, introducing sweeping state intervention powers to secure national defence production capacity during emergencies or wartime scenarios [2][3][4]. By moving beyond isolated commercial transactions, the government aims to establish a permanent regulatory shield for high-tech systems, dual-use technology, and essential military hardware [2][5].
Compelling Private Supply Chains
The most striking component of the WWDI is the mandate it grants authorities to intervene directly in the operations of private companies during a national emergency [3][4]. If voluntary cooperation fails, the legislation empowers the Dutch government to designate a limited number of essential domestic suppliers—expected to be fewer than ten—and compel them to prioritise military orders [3][4]. Furthermore, the state will have the legal authority to requisition existing stocks of materials to ensure the armed forces remain supplied [3][4].
Targeted Scope and Financial Guarantees
To prevent widespread market disruption, Minister Heleen Herbert emphasised that these interventionist powers are strictly reserved for wartime or severe emergency scenarios [3][4]. The mandate is restricted to companies that are already active in producing relevant materials, ranging from advanced weaponry to basic but vital medical supplies like bandages [3][4]. Crucially, the government intends to maintain a non-public, evolving list of these designated companies [3][4]. To balance this regulatory burden, the affected private firms will receive full financial compensation for any state-mandated production shifts [3][4].
Capital Screening and the Bureau Toetsing Investeringen
Beyond emergency manufacturing directives, the WWDI introduces a robust sector-specific investment test to protect critical suppliers from unwanted foreign takeovers, mergers, or investments [2]. This screening framework will operate under the Bureau Toetsing Investeringen (BTI), a specialised unit within the Ministry of Economic Affairs and Climate [2][5]. The BTI is already responsible for executing investment screenings under the broader “Wet Vifo” (enacted in 2023), which covers general sensitive technologies such as quantum computing, photonics, semiconductors, and dual-use hardware [5].
Scrutinising Critical Transactions
By embedding a sector-specific test within the WWDI, the government is establishing a more rigorous layer of scrutiny tailored specifically to the defence supply chain [2]. If the BTI identifies any transaction that poses a threat to national security, it has the authority to impose strict conditions or block the transaction entirely [5]. The integration of the WWDI with the BTI’s existing oversight ensures that critical intellectual property in high-tech defence manufacturing remains shielded from hostile geopolitical actors [2][5].
Boosting a Nine-Billion-Euro Ecosystem
While the legislation introduces stricter compliance frameworks and potential state mandates, it also aims to enhance the international competitiveness of domestic firms [2]. The Dutch defence and security industry comprises approximately 1,000 domestic companies, which collectively generate an annual turnover of roughly €9 billion [3][4]. This equates to an average annual turnover of 9.000 million euros per firm [3][4], representing a highly fragmented ecosystem of small-to-medium enterprises and specialised deep-tech startups [GPT].
A Path to 2027 Implementation
To help these domestic companies scale and secure international contracts, the WWDI proposes a new government screening and certification system [3][4]. Under this framework, the state will issue a formal suitability declaration to verified Dutch companies, certifying their reliability, security standards, and ownership structure [2][3][4]. Minister Herbert highlighted that this official stamp of approval will make it significantly easier for local firms to position themselves as trusted partners for international procurement and allied armed forces [2][3][4]. However, because the WWDI’s mandatory production directives apply exclusively to domestic companies, it excludes foreign firms entirely, despite the fact that they currently supply the majority of the military’s weapons and ammunition [3][4]. The government targets an implementation date during the course of 2027 [3][4].