The Government will have to compensate an Israeli company with €329,400 for the cancellation of an ammunition purchase

Eduardo González The Spanish government will have to compensate the Israeli company Guardian Defense & Homeland Security S.A. with €329,400 for unilaterally terminating a contract for the purchase of ammunition destined for the Civil Guard, a controversy that nearly caused a serious rift in the coalition government. According to the website of CIVIO (a Spanish non-profit organization that promotes transparency and accountability in public administrations through data journalism, public advocacy, and technology), this compensation is included in a resolution issued by the Secretary of State for Security and the Chief General of Economic Affairs of the Civil Guard, signed on June 5th. This resolution was based on a ruling by the Council of State dated April 16, 2025, which established the payment to the Israeli company of the six percent compensation stipulated by the Public Sector Contracts Law for such cases (hence the €329,400). This amount is double the initially allocated sum, but significantly less than what Guardian Homeland Security sought. The company had requested a full refund of the €5.5 million contract amount, or at least the full cost of the first delivery and a larger compensation payment. This resolution can be appealed to the Administrative Chamber of the National Court. At the end of April 2025, the Prime Minister's Office, the Second Vice Presidency (held by Yolanda Díaz, leader of the Sumar party), and the relevant Ministries decided to terminate the contract with the Israeli company, formalized just days earlier, after exhausting all avenues of negotiation. According to sources at Moncloa Palace speaking to La Sexta, Prime Minister Pedro Sánchez himself became personally involved in the controversy and gave instructions to find a solution. Consequently, the Board for Investment in Dual-Use Materials denied the Israeli company's import permit for the equipment for reasons of public interest, and the Ministry of the Interior proceeded to terminate the contract. Following this decision, the State Attorney's Office and the relevant Ministries began studying possible legal actions and claims. The contract had generated considerable controversy and had even jeopardized Sumar's continued participation in the coalition government. The controversy erupted after it was revealed that the Civil Guard's Economic Affairs Division had decided to honor a contract worth over six million euros for the purchase of fifteen million rounds of ammunition from Guardian Defense & Homeland Security S.A., despite the fact that, a few months earlier, the Ministry of the Interior itself had decided to terminate the contract with the Israeli company to uphold the government's commitment "not to buy or sell weapons to the Israeli state since the outbreak of the armed conflict in the Gaza Strip." The Interior Ministry's change of heart was due to a recommendation from the State Attorney's Office, which advised against termination because the state would have been forced to pay the full amount of the contract without receiving the requested equipment. Following the termination of the purchase, Yolanda Díaz celebrated the cancellation of the "shameful contract." "Spain cannot buy or sell weapons to Israeli companies. Our commitment to Human Rights is unwavering," she wrote on social media. In a very different vein, the president of the People's Party, Alberto Núñez Feijóo, strongly criticized this decision. "When one state enters into a contract with another, it must be honored, especially if we are talking about two democratic states like Spain and Israel," he told the media.

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