Special Production License – Conditions, Procedure and Obligations for Defense Sector Companies
The development of the domestic defense industry and the growing needs of the Polish Armed Forces and law enforcement agencies are driving increasing interest from private enterprises — including SMEs — in the production of armaments, military components, and dual-use items. Often, this involves small facilities working for larger entities such as companies within the Polish Armaments Group (PGZ).
However, before launching any production subject to special legal restrictions, a company must obtain a license from the Ministry of the Interior and Administration (MSWiA) for special trade or special production. This article explains the nature of licensed activities, who needs a permit and when, and what obligations come with holding such a license.
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What Does "Special Production" Mean According to Regulations?
Special production, according to the law, refers to the manufacturing of products:
- intended for the armed forces, police, state protection services, Border Guard, and other uniformed services;
- that may constitute weapons, ammunition, explosives, military optoelectronics, fire control systems, special-purpose vehicles, etc.;
- as well as components for the aforementioned items.
In practice, this also includes the manufacturing of so-called dual-use products — i.e., items that may serve both civilian and military purposes (e.g., sensors, drones, communication systems, satellite technologies).
When Is an MSWiA License for Special Production and Trade Required?
According to the Act of June 22, 2001, on business activities involving the manufacturing and trading of military or police-use products, an MSWiA license is mandatory if a company plans to:
- manufacture products intended for the military, police, or state services;
- trade in weapons and ammunition, including repairs or modifications;
- store or transport such components on behalf of other entities.
A license for the trade or production of armaments is essential if the company cooperates with state-owned entities, such as companies from the Polish Armaments Group (PGZ).
Operating without the proper license results in criminal and administrative liability and prevents the legal pursuit of business in Poland’s defense industry.
Small Defense Companies and Licensing – What Are Their Obligations?
In recent years, there has been a rise in demand for components, subassemblies, and specialized services delivered by smaller, highly specialized firms — for example, in the areas of precision machining, 3D metal printing, electronics, or optical detection.
Such companies, even if they don’t produce complete weapons systems, must obtain a license if:
- their products become part of final goods intended for military use;
- they design or integrate military system components (e.g., observation, power, or mobile platform systems);
- they participate in the supply chain for PGZ or Ministry of Defense units.
The licensing conditions for small defense companies are identical to those for large entities — the same security, reporting, and data storage requirements apply.
How to Obtain a License for Military Production?
The MSWiA licensing procedure consists of several stages and may take from 3 to 6 months. It includes:
Preparing documentation:
- information on company ownership structure,
- scope of intended operations,
- data of managing personnel,
- information on the security of storage and transportation methods.
Obtaining opinions from the Internal Security Agency (ABW) and the Police.
Verification of the company’s physical and organizational safeguards.
Decision by the Minister of the Interior and Administration (MSWiA) on granting the license.
For entities planning to obtain an MSWiA license, collaboration with advisors familiar with defense procedures is recommended.
Obligations of Companies Holding an MSWiA License
License holders must not only comply with legal regulations but also perform regular control and reporting activities, including:
- maintaining a register of licensed products,
- preparing periodic reports for the MSWiA,
- cooperating with Armament Inspectorate audits,
- complying with classified information protection laws.
Dual-Use Production License – An Opportunity for Modern Firms
A license for dual-use production covers products that may be used for both civilian and military purposes. Examples include:
- drones and UAV systems,
- satellite navigation systems,
- optical and thermal sensors,
- components and panels for space systems,
- software for weapon control systems.
These products can be sold to both civilian and military clients. However, when supplied to PGZ companies or foreign military partners, a license and export permits (e.g., from the Ministry of Development or DUO) may also be required.
When and Why Is a License for Special Trade Required?
The increase in defense spending and the dynamic growth of the defense industry in Poland create new opportunities for innovative SMEs wishing to engage in special production, armament manufacturing, or weapons and ammunition trade.
Obtaining the appropriate MSWiA license for special trade is not just a formality — it is a legal requirement for cooperation with state entities and participation in defense tenders.
Below is a summary of key cases where a license is required:
- License for special production – for companies manufacturing components, equipment, or technologies for the military and public services.
- License for arms trade – in cases involving the sale, import, export, or storage of military products.
- License for dual-use production – for manufacturing civil-military technologies (e.g., drones, software, sensors).
- MSWiA license for SMEs – also required for subcontractors in the PGZ supply chain.
If you plan to begin operations in special production or the manufacturing of military-use components, consult with Thompson&Stein experts, who will assist you throughout the licensing process and help prepare your company to meet legal and security requirements.
FAQ – Frequently Asked Questions About the Special Trade License
When must a company apply for a special trade license?
A company must obtain a special trade license if it intends to manufacture, modify, sell, store, or transport military or police-use products. This also applies to entities indirectly involved in the supply chain — e.g., those providing components for military products or cooperating with state-owned companies.
Does the MSWiA special trade license cover arms export?
Yes. The MSWiA license for special trade is also required when a company exports weapons, ammunition, or dual-use technologies. Regardless of whether the client is a domestic institution or a foreign military partner, additional export approvals are necessary — e.g., from the Ministry of Development or the Armament Department.
What’s the difference between a license for arms trade and one for special production?
The arms trade license permits the sale, trade, transport, and storage of finished military or police-use products. The special production license applies to the manufacturing of such products, as well as their modification or repair. In practice, many firms require both licenses if they engage in both production and distribution.
Is a license for arms and ammunition trade mandatory for SMEs?
Yes. The regulations do not differentiate based on company size. This means that micro, small, and medium-sized enterprises must also obtain a license for arms and ammunition trade if they participate in the handling of such products — even as subcontractors to PGZ companies or public security sector contractors.
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