Incentives in ICCs exceeding DKK 100 million

30 Per Cent Requirement
Foreign suppliers that conclude contracts with the Danish Armed Forces for supplies of defence materiel or services exceeding DKK 100 million are required to conclude contracts with Danish companies for at least 30% of the contract value no later than 4 years after signing the contract with the Danish Armed Forces.

Reward
A foreign supplier that concludes contracts with Danish companies for more than 30% within 4 years will achieve a reward in the form of a reduction in the total obligation corresponding to the over-fulfilment.

If the supplier e.g. has concluded contracts with Danish companies for 40% within 4 years, the total obligation will be reduced from 100% to 90%. If the figure is 50%, the total obligation will be reduced to 80% etc. Hence signing of contracts for 65% of a total obligation within 4 years correspond to a 100% fulfilment. Multipliers due to industrial co-operation cannot be used in combination with the reward.

Sanction/Bank Guarantee
A foreign supplier who has not concluded contracts with Danish companies for at least 30% after 4 years shall pay the amount missing to fulfil 30% to the Danish Enterprise and Construction Authority (DECA). The obligation to pay the said amount is to be covered by an irrevocable "on demand" bank guarantee. If drawn down, the bank guarantee liquidates all obligations to the first 30%, but does not release the foreign supplier from the obligation to fulfil the remaining 70% of the ICC.

In extraordinary cases an extention of the deadline regarding the fulfilment of the 30% may be approved. In order to avoid the effect of the bank guarantee foreign suppliers may gain offset credits by placing orders with Danish companies in a prequalification phase 2 years prior to the award of the contract with the Danish Armed Forces. Any qualifying transaction including multipliers may be accepted in such a Pre-qualification Banking Agreement.