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Mrs. Martina Taxova
Trade Commissioner
Prague, Czech Republic

Defence and security market profile  - Czech Republic

Executive summary

The Czech Republic is a landlocked country surrounded by EU states and NATO members (except for Austria), i.e. not having to protect the external EU border, with no imminent threats present or foreseen. As a country with no sea access, its major military forces are air and land forces, lacking naval forces.

Due to this relatively assured safety, priorities of Czech governments shifted into other areas in the past and defense spending fell under 1% of the GDP four years ago. The situation changed with the crisis in Eastern Ukraine and the Crimea annexation by Russia. Suddenly a war was going on almost next door as only neighboring Slovakia separates the Czech Republic from Ukraine. Similarly, the European migration crisis had a comparable effect on internal security considerations. In response to these and other global developments involving higher threats to national security, the Ministry of Interior (MoI) and especially the Ministry of Defense (MoD) increased spending.

While the Czech Air Force boasts of modernized 4th generation JAS-39 Gripen jets to protect the country’s airspace, also operating non-supersonic L-159s fighters and CASA transporters and planning to purchase new multipurpose helicopters, the ground forces are underfinanced and underdeveloped and still partially depend on technology from the Soviet era, despite regular upgrades to meet current needs and NATO compatibility.

Currently, Czech forces are deployed on missions in Europe, Asia, and Africa (e.g. Afghanistan, Iraq, and Mali).

By far the largest Czech military and armaments company is the Czechoslovak Group, a holding structure with many daughter companies of diverse specialisations. Despite introduction of a new training fighter jet in 2018, the role of traditional players such as Aero Vodochody, as well as defense trade company Omnipol, has been diminishing.

After years of rapid rise, military exports - with the United States being the largest buyer - declined for the first time in 2017.

The Czech army is to be heavily upgraded in the coming years as part of the MoD’s modernization plan. The largest expected purchases will include heavy armored infantry combat vehicles, multipurpose helicopters, new howitzers, 6x6 armored transporters, and MADR 3D radars.

National security and homeland affairs are overseen by the Ministry of Interior (MoI) and the Police of the Czech Republic as the main law enforcement entity in the country. The police’s planned purchases are not as massive as by the army, with advanced drones (smaller UAVs) being the main known future procurement. The MoI budget is not growing as dynamically as is the MoD budget.

Next to the nationwide Police of the Czech Republic, municipal police forces operate in each bigger city and town, however with limited law enforcement capabilities. The municipal police of the city of Prague is the largest among them.

The Czech Republic is one of the world’s most peaceful countries, but still has to cope with organized crime, corruption, terrorism threats, and cyberattacks, and in recent years against hybrid (information) war from Russia.

Cyber security is being taken very seriously by the Czech Government; special agencies under both MoD and MoI have been established to fight cyber threats. Critical infrastructure facilities, such as the country’s two nuclear power plants, are the primary objects of both cyber and physical security.

The Czech defense and security market currently offers good business opportunities and foreign suppliers are advised to pursue them. Canadian, as well as other overseas companies, are advised to engage the services of a local partner (e.g. distributor) to facilitate entry into the market. A knowledgeable local contact should have both industry and regulatory knowledge and can help minimize difficulties in navigating the market.

The Canadian Embassy in Prague provides assistance to exporters looking for a trade partner and to companies planning to establish a local office in the Czech Republic.

Contact us

For the full report contact: prgue-td@international.gc.ca

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