Abstract:
The European Union has filed a lawsuit against IBM and two other European companies over repeated delays in developing the EU's new smart border management system. The rollout of the system caused widespread chaos at airports across Europe this summer. EU-Lisa, the EU agency responsible for overseeing the system, has sued US technology company IBM, French information technology group Atos and Italian defense contractor Leonardo, according to internal communications records. Previously, the consortium composed of the three companies had repeatedly failed to complete the project on schedule and challenged warnings and fines issued by EU-Lisa.
The new Entry-Exit System (EES) requires travelers from outside the Schengen area to have their fingerprints taken and photos taken upon first entry to identify people who have overstayed their visas and those wanted by law enforcement agencies. The Schengen Free Movement Area covers 29 European countries, most of which are EU member states.
The system was originally scheduled to go online in 2022, but it was not fully operational until this year. Its rollout has been plagued by ongoing software and hardware glitches, including a fingerprint scanner that malfunctioned after getting wet with sweat, leading to hours-long queues at airports across Europe. Some EU countries are still purchasing related scanning equipment.
EU-Lisa confirmed in its latest annual financial report published in July this year that the agency had filed a lawsuit in Estonia, the country where its headquarters is located, in December 2025.
The agency said: "In view of the multiple delays in the delivery of the EES system by the contracting consortium, the agency has initiated the remedial measures that can be taken under the contract and legal framework to protect its financial interests."
A spokesman for the Harju County Court, the largest district court in Estonia, confirmed that the court had accepted the civil lawsuit, but that no hearing has yet been held and no hearing date has been scheduled.
EU-Lisa declined to comment on the ongoing legal proceedings and said the case "will not affect the operation of the Entry and Exit System (EES), which is now fully operational in Europe".
The European Commission emphasized that this lawsuit involves "delivery delays during the development phase of the EES system" and "has nothing to do with the actual operation of the EES system."
Leonardo and Atos declined to comment on the legal proceedings. IBM did not respond to a request for comment.
Correspondence between the consortium and EU-Lisa shows that disputes over project delays and fines have been going on for several years.
In a letter in October 2021, Atos Belgium and IBM Belgium disputed the fine issued by EU-Lisa, questioning "the principle basis of the fine and the method of its calculation" and claiming that the delay was caused by "external factors" including the COVID-19 epidemic.
A few months later, in February 2022, the three companies expressed their opposition to the new delivery deadline set by EU-Lisa.
The consortium wrote in the letter: "Ignoring reality is unwise and will not help the realization of the plan. On the contrary, working according to unrealistic plans will only frustrate all stakeholders."
The coalition also criticized the EU body's "overall governance".
In a March 2022 letter, an IBM representative agreed with EU-Lisa to withhold some payments until the issue of damages was resolved.
EU-Lisa said in its 2022 annual financial report that the agency had "experienced difficulties with the contracting consortium responsible for implementing the EES system" and was assessing "additional costs" caused by project delays. The delays also hampered the construction of other information technology systems.
Prior to this, the total contract value of the EES project has been increased from 142 million euros to 212 million euros in 2021.
A year later, EU-Lisa said in its annual financial report that project delays "increased the budget required for the implementation of the EES system," including rising hardware and software maintenance costs.
Financial reports show that in 2023, the agency will nearly double the EES system budget to 40 million euros by reallocating funds from other projects.
According to EU-Lisa, the original contract expired last year, and a new consortium took over the implementation of the EES system. However, Atos, Leonardo and IBM continued to be responsible for related work until August this year.
The project has also faced accusations of cybersecurity risks.
Last year it was reported that Atos had purchased software for the sensitive border management system through its Moscow office. EU-Lisa stated that it has not discovered any security vulnerabilities or security incidents.
The EU Anti-Fraud Office (OLAF) believes that the relevant accusations are "sufficiently based" and deserve further investigation. The agency said that if the allegations of Russian involvement in the project were confirmed, it would constitute a breach of contract.
However, according to an internal report, the case was ultimately referred back to EU-Lisa despite OLAF deeming EU-Lisa's initial assessment to be "inadequate".
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