GBAF Logo
Global Banking & Finance Awards® 2026 Nominations open, free to enter Nominate now →
EU sues IBM and two European companies over troubled border system, FT reports - Finance news and analysis from Global Banking & Finance Review
Finance

EU sues IBM and two European companies over troubled border system, FT reports

Published by Global Banking & Finance Review

Posted on November 9, 2026

2 min read

· Last updated: November 9, 2026

Add as preferred source on Google

EU Sues IBM and Partners Over Repeated Delays in Border System Development

Legal Dispute Over EU's Smart Border System

Background of the Lawsuit

Nov 9 (Reuters) - The European Union has sued IBM, French IT group Atos and Italian defence contractor Leonardo over repeated delays in developing its new smart border system, the Financial Times reported on Monday, citing internal communications.

EU-Lisa, the agency responsible for the operational management of large-scale IT systems in the area has sued the firms, according to the newspaper.

Purpose and Scope of the Entry/Exit System

The Entry/Exit System electronically records the entry and exit of non-EU nationals at the bloc's external borders. The system applies across the 29 countries in the Schengen area and is designed to identify visa overstayers, combat identity fraud and curb illegal migration.

Impact of Legal Proceedings

EU-Lisa told the FT that the legal proceedings had "no impact on the functioning of the Entry/Exit System (EES)," adding that the dispute relates to delays in the delivery of the EES at the time of the system development and is not related to the operation of the EES.

Responses and Contract Details

Reuters could not immediately verify the report. IBM, Leonardo, Atos, and EU-LISA did not immediately respond to a request for comment sent outside regular business hours. 

Contract Award and Consortium

In 2019, the EU agency awarded a core EES contract to a consortium including IBM Belgium, Atos Belgium and Leonardo. The six-year contract covered implementation and maintenance of the central Entry/Exit System. 

Disputes Over Fines and Deadlines

In an October 2021 letter seen by FT, Atos Belgium and IBM Belgium contested "both the principle ... and the calculation" of a fine imposed by the agency, arguing that delays stemmed from external factors, including the COVID-19 pandemic.

A few months later, in February 2022, the three companies pushed back against new deadlines set by EU-Lisa. 

Reporting Credits

(Reporting by Preetika Parashuraman in Bengaluru; Editing by Nivedita Bhattacharjee)

Key Takeaways

  • The EES went fully operational on April 10, 2026, replacing passport stamping with biometric entry/exit tracking across 29 Schengen countries (home-affairs.ec.europa.eu).
  • In 2019, eu‑LISA awarded a €142 million contract for EES implementation and maintenance to a consortium including IBM Belgium, Atos Belgium and Leonardo; internal documents cite technical faults, missing parts and inexperienced teams causing multiple delays (biometricupdate.com).
  • Legal proceedings from eu‑LISA focus solely on development-phase delays and do not impact the EES’s live functioning, which has processed over 52 million crossings since full deployment (europarl.europa.eu).

References

Frequently Asked Questions

Why did the EU sue IBM, Atos, and Leonardo?
The EU sued IBM, Atos, and Leonardo over repeated delays in developing the new smart border Entry/Exit System for the Schengen area.
What is the Entry/Exit System (EES)?
The Entry/Exit System electronically records the entry and exit of non-EU nationals at the Schengen area's external borders.
Who manages the Entry/Exit System development?
EU-Lisa, the EU agency responsible for large-scale IT systems, oversees the development and implementation of the EES.
What were the contractors' arguments regarding the delays?
Atos and IBM argued that delays stemmed from external factors, including the COVID-19 pandemic, disputing penalties imposed by EU-Lisa.
Do the legal proceedings affect the operation of the EES?
EU-Lisa stated that the legal proceedings have no impact on the current functioning of the Entry/Exit System.

Tags

Related Articles

More from Finance

Explore more articles in the Finance category