Objectives
1. The Programme shall aim to increase the competitiveness, resilience and readiness of the EDTIB by initiating and accelerating the adjustment of the industry to structural changes imposed by the evolving security environment. In particular, the Programme shall aim to:
(a)
enhance cooperation in defence procurement by incentivising Member States to aggregate demand for defence products, harmonise defence capability requirements and strengthen solidarity among themselves, ultimately leading to greater interoperability and interchangeability, and by improving predictability of demand for the EDTIB, corresponding with Member States’ defence product needs;
(b)
improve and accelerate the capacity for adaptation of defence industrial supply chains, open up supply chains for cross-border cooperation, in particular for SMEs and mid-caps, increase manufacturing capacities, reduce production lead time for defence products and support the industrialisation and commercialisation of defence products supported by actions funded by the Union or by other Union cooperative activities conducted with the support of Member States, with a view to ensuring the availability and supply of defence products throughout the Union, and taking into account the specific needs of Member States in the case of materialisation of conventional military threats;
(c)
improve the security of supply and resilience of the EDTIB by supporting the development and presence of the EDTIB throughout the Union.
2. The Programme shall be implemented taking into account the objectives of the Strategic Compass for Security and Defence and shall be consistent with the defence capability priorities commonly agreed by Member States within the framework of the common foreign and security policy (CFSP), in particular within the context of the Capability Development Plan (CDP), and with the collaborative opportunities identified in the Coordinated Annual Review on Defence (CARD).
3. The Programme shall be consistent with Member States’ cooperation within the framework of permanent structured cooperation (PESCO), EDA initiatives and projects, and the Union’s civil and military assistance to Ukraine. The Programme shall duly take into account the relevant activities carried out by the North Atlantic Treaty Organisation (NATO) and other partners where such activities serve the security and defence interests of the Union.
Additional financial resources
1. Member States, Union institutions, bodies and agencies, third countries, international organisations, international financial institutions or other third parties may provide additional financial contributions to the Programme, including to the Fund Accelerating Defence Supply Chains Transformation (FAST) referred to in Article 14 of this Regulation, in accordance with Article 211(2) of the Financial Regulation. Such financial contributions shall constitute external assigned revenue within the meaning of Article 21(2), point (a), (d) or (e), or Article 21(5) of the Financial Regulation.
2. Provided that they contribute to the achievement of one or more of the objectives set out in Article 4 of Regulation (EU) 2021/241, Member State contributions supported by the Recovery and Resilience Facility shall be used for the benefit of the Member State concerned and may, by way of derogation from Article 20(6) of this Regulation and from Article 193(1) of the Financial Regulation, be used for the purpose of contributing to the funding of eligible actions under Article 12 of this Regulation, up to 100 % of the eligible costs.
By way of derogation from Article 5(2), Article 18(4), point (d), and Article 19(3), point (d), and Annex V, criterion 2.4, of Regulation (EU) 2021/241, the principle of ‘do no significant harm’ shall not apply to Member State contributions supported by the Recovery and Resilience Facility, provided that the Member State concerned justifies in the relevant contribution agreement with the Commission that it is not feasible or appropriate to ensure that the type of activities intended to be supported under this Regulation comply with the principle of ‘do no significant harm’.
3. Any additional amounts received under bilateral or multilateral agreements concluded pursuant to Article 17 of Council Regulation (EU) 2025/1106 ( 38 ) shall constitute external assigned revenue within the meaning of Article 21(5) of the Financial Regulation and shall be used for the Programme in accordance with this Regulation.
4. Resources allocated to Member States under shared management may, at the request of the Member State concerned, be transferred to the Programme subject to the conditions set out in Regulation (EU) 2021/1060. The Commission shall implement those resources directly in accordance with Article 62(1), first subparagraph, point (a), of the Financial Regulation or indirectly in accordance with point (c) of that subparagraph. Those resources shall be used for the benefit of the Member State concerned.
5. As regards the amounts contributed in accordance with paragraph 1 of this Article, the Member State concerned may take decisions regarding the proportion of those amounts to be made available to all entities eligible for funding under this Regulation, to be made available only to the benefit of the Member State concerned or to be made available to the additional benefit of other Member States. Where the amounts are made available to the benefit of the Member State concerned or to the additional benefit of other Member States, such amounts may, by derogation from Article 20(6) of this Regulation and from Article 193(1) of the Financial Regulation, be used for the purpose of contributing to the funding of eligible actions under Article 12 of this Regulation, up to 100 % of the eligible costs.
6. Where the Commission has not entered into a legal commitment under direct or indirect management for resources transferred in accordance with paragraph 4 of this Article and at the latest by 31 December 2028, the corresponding uncommitted resources may be transferred back to one or more respective source programmes, at the request of the Member State concerned, in accordance with the conditions set out in Regulation (EU) 2021/1060.
Alternative, combined and cumulative funding
1. The Programme shall be implemented in synergy with other Union programmes. An action that has received a contribution from another Union programme may also receive a contribution under the Programme provided that those contributions do not cover the same costs. The rules of the relevant Union programme shall apply to the corresponding contribution, or a single set of rules of any of the contributing Union programmes may be applied to all contributions and a single legal commitment may be concluded. The cumulative support from the Union budget shall not exceed the total eligible costs of the action and may be calculated on a pro-rata basis in accordance with the documents setting out the conditions for support.
2. In order to be awarded a Seal of Excellence under the Programme, actions shall meet all of the following conditions:
(a)
have been assessed in a call for proposals under the Programme;
(b)
comply with the minimum quality requirements of that call for proposals;
(c)
not be financed under that call for proposals due to budgetary constraints.
3. In accordance with the relevant provisions of Regulation (EU) 2021/1060, the European Regional Development Fund (ERDF) or the European Social Fund Plus (ESF+) may support proposals submitted further to a call for proposals under the Programme which were awarded a Seal of Excellence.
Implementation and forms of Union funding
1. The Programme shall be implemented under direct management in accordance with the Financial Regulation or under indirect management with entities referred to in Article 62(1), point (c), of the Financial Regulation.
2. Without prejudice to Article 20(3) of this Regulation, Union funding may be provided in any of the forms laid down in the Financial Regulation, in particular in the form of grants, prizes, procurement, and financial instruments within blending operations under the InvestEU programme in accordance with Title X of the Financial Regulation.
3. With respect to actions referred to in Article 12(1) of this Regulation for which Union funding is provided in the form of a grant and a profit is made, the Commission shall be entitled to recover the percentage of the profit corresponding to the Union contribution to the eligible costs actually incurred by the beneficiary carrying out the action, up to the final amount of the Union contribution. By way of derogation from Article 195(2) of the Financial Regulation, the profit shall be calculated by a surplus of receipts over the eligible costs of the action, where receipts are limited to Union funding, Member State funding, including procurement, other revenue generated during the action and any revenue resulting from the action. The work programmes referred to in Article 21 of this Regulation may set out further details.
4. By way of derogation from Article 196(2) of the Financial Regulation, financial contributions may, where relevant and necessary for the implementation of an action, cover actions started and costs incurred prior to the date of the submission of the proposal for those actions, provided that those actions did not start before 5 March 2024 and have not been completed before the signature of the grant agreement.
Third countries associated with the Programme
The Programme shall be open to the participation of associated countries, in accordance with the conditions laid down in the Agreement on the European Economic Area.
Eligible legal entities
1. Only legal entities established in the Union or in an associated country and having their executive management structures in the Union or in an associated country shall be eligible to be recipients of Union funding under this Regulation.
2. The eligibility criteria set out in paragraphs 3 to 9 of this Article shall apply in addition to the criteria set out in accordance with the Financial Regulation.
3. The infrastructure, facilities, assets and resources of the recipients of Union funding involved in an action which are used for the purposes of that action shall be located on the territory of a Member State or of an associated country for the entire duration of the action.
4. By way of derogation from paragraph 3 of this Article, where recipients of Union funding involved in an action have no readily available alternatives or relevant infrastructure, facilities, assets and resources in the Union or in an associated country, they may use their infrastructure, facilities, assets or resources which are located or held outside the territory of the Member States or of the associated countries, provided that such use does not contravene the security and defence interests of the Union and its Member States, including respect for the principle of good neighbourly relations, and is consistent with the objectives set out in Article 4. The costs related to activities using such infrastructure, facilities, assets or resources shall not be eligible for support from the Programme.
5. Recipients of Union funding under the Programme shall not be subject to control by a non-associated third country or by a non-associated third-country entity.
6. By way of derogation from paragraph 5 of this Article, a legal entity established in the Union or in an associated country and controlled by a non-associated third country or by a non-associated third-country entity shall be eligible to be a recipient of Union funding if guarantees approved in accordance with the national procedures of a Member State or associated country in which it is established, such as adequate measures pursuant to screening, as defined in Article 2, point (3), of Regulation (EU) 2019/452 of the European Parliament and of the Council ( 39 ) , are made available to the Commission.
The guarantees referred to in the first subparagraph of this paragraph shall provide assurances that the involvement in an action of a legal entity as referred to in that subparagraph would not contravene the security and defence interests of the Union and its Member States as established in the framework of the CFSP pursuant to Title V of the TEU, including respect for the principle of good neighbourly relations, or the objectives set out in Article 4 of this Regulation. Those guarantees shall in particular substantiate that, for the purposes of an action, measures are in place to ensure that:
(a)
control over the legal entity is not exercised in a manner that restrains or restricts its ability to carry out the action and to deliver results, that imposes restrictions concerning its infrastructure, facilities, assets, resources, intellectual property or know-how needed for the purposes of the action, or that undermines its capabilities and standards necessary to carry out the action;
(b)
access by a non-associated third country or by a non-associated third-country entity to classified or sensitive information relating to the action is prevented and the employees or other persons involved in the action have national security clearance issued by a Member State or an associated country, where appropriate, in accordance with national laws and regulations;
(c)
the ownership of intellectual property arising from actions referred to in Article 12(1), point (d), is not subject to restriction by a non-associated third country or a non-associated third-country entity nor transferred to entities established outside the territory of the Member States or of associated countries, without the approval of the Member State or the associated country in which the legal entity is established. Such approval shall not contravene the objectives set out in Article 4.
If considered to be appropriate by the Member State or the associated country in which the legal entity is established, additional guarantees may be provided.
The Commission shall inform the committee referred to in Article 77 of any legal entity considered to be eligible to be a recipient of Union funding in accordance with this paragraph.
7. The guarantees referred to in paragraph 6 of this Article may be based on a standardised template provided by the Commission, assisted by the committee referred to in Article 77, in order to ensure a harmonised approach throughout the Union.
8. When carrying out an eligible action, recipients may also cooperate with legal entities established outside the territory of the Member States or of associated countries, or controlled by a non-associated third country or by a non-associated third-country entity, including by using the assets, infrastructure, facilities and resources of such legal entities, provided that such use does not contravene the security and defence interests of the Union and its Member States, including respect for the principle of good neighbourly relations, or the objectives set out in Article 4.
There shall be no unauthorised access by a non-associated third country or by a non-associated third-country entity to classified information relating to the carrying-out of the action, and potential negative effects on the security of supply of inputs critical to the action shall be avoided.
The costs related to cooperation with legal entities established outside the territory of the Member States or of associated countries, or controlled by a non-associated third country or by a non-associated third-country entity, shall not be eligible for support from the Programme.
9. Paragraphs 5 and 6 shall not apply to:
(a)
contracting authorities of Member States and associated countries;
(b)
international organisations;
(c)
SEAPs;
(d)
the EDA.
Source: EUR-Lex (Publications Office of the EU), © European Union, reuse permitted under Commission Decision 2011/833/EU.
