Eligible actions
1. Actions eligible for funding under the Programme shall implement the objectives set out in Article 4 and may take one of the following forms, or a combination thereof:
(a)
common procurement actions as referred to in Article 11, including for the purpose of establishing, managing or maintaining defence industrial readiness pools;
(b)
industrial reinforcement actions as referred to in Article 12;
(c)
supporting actions as referred to in Article 13;
(d)
deployment of EDPCIs as referred to in Article 35.
2. The following actions shall not be eligible for funding under the Programme:
(a)
actions related to defence products that are prohibited by applicable international law;
(b)
actions related to lethal autonomous systems that operate outside a responsible chain of human command and control or that cannot be used in compliance with international humanitarian law;
(c)
actions related to cluster munitions;
(d)
actions, or parts thereof, that are already fully financed from other public or private sources.
3. For procurement carried out pursuant to Articles 11, 13 and 35 which is supported by Union funding, the cost of components originating outside the Union and associated countries shall not be higher than 35 % of the estimated cost of the components of the end product. No component shall be sourced from third countries that contravene the security and defence interests of the Union and its Member States.
4. For actions carried out pursuant to Article 12 and activities carried out pursuant to Article 35 other than procurement activities, the cost of components originating outside the Union and associated countries shall not be higher than 35 % of the estimated cost of the components of the product the increase in production capacity of which is supported by Union funding. No component of the product the increase in production capacity of which is supported by Union funding shall be sourced from third countries that contravene the security and defence interests of the Union and its Member States.
5. Recipients of Union funding or, where relevant, contractors, shall have the ability to decide, without restrictions imposed by non-associated third countries or by non-associated third-country entities, on the definition, adaptation and evolution of the design of the defence products concerned, including the legal authority to substitute or remove components that are subject to restrictions imposed by non-associated third countries or by non-associated third-country entities.
6. Without prejudice to Article 5 of Directive 2009/43/EC, Member States may publish general transfer licences for transfer to other Member States of products related to actions supported by the Programme.
Common procurement actions
1. Common procurement actions shall consist of activities related to the cooperation of legal entities in the procurement of defence products, at any point in the life cycle of such defence products, including for the purpose of establishing, managing and maintaining defence industrial readiness pools.
2. Only the following legal entities shall be eligible for common procurement actions:
(a)
contracting authorities of Member States or associated countries;
(b)
international organisations;
(c)
SEAPs;
(d)
the EDA.
3. Common procurement actions shall be carried out by:
(a)
a consortium of legal entities as referred to in paragraph 2, including at least three entities referred to in paragraph 2, point (a), from at least three Member States or associated countries of which at least two shall be contracting authorities of two Member States; or
(b)
a SEAP.
4. Member States and associated countries carrying out a common procurement action shall appoint, by unanimity, a procurement agent to act on their behalf for the purposes of that common procurement. The procurement agent shall carry out the procurement procedures and conclude the resulting contracts with contractors on behalf of the participating countries. The procurement agent may participate in the action as a beneficiary and act as the coordinator of the consortium of legal entities, therefore being able to manage and combine funds from the Programme and funds from the participating Member States and associated countries.
5. The procurement procedures referred to in paragraph 4 shall be based on an agreement to be signed by the participating Member States and associated countries with the procurement agent under the conditions set out in the work programme. The agreement shall, in particular, determine the practical arrangements governing the common procurement and the decision-making process as regards the choice of the procedure, the assessment of the tenders and the award of the contract.
6. The procurement agent shall apply criteria equivalent to those set out in Article 9 to its procurement procedures and contracts with contractors and require that those criteria are applied to subcontractors.
7. By way of derogation from paragraph 6, in order to take into account industrial cooperation with non-associated third countries, common procurement that involves a subcontractor that is allocated between 15 % and 35 % of the value of the contract, and that is not established or does not have its executive management structures in the Union or in an associated country, shall be eligible for support under the Programme provided that a direct contractual relationship related to the defence product has been established between the contractor and that subcontractor prior to the date of entry into force of this Regulation.
8. Procurement agents shall notify the Commission of the guarantees referred to in Article 9(6). Further information on those guarantees shall be made available to the Commission upon request. The Commission shall inform the committee referred to in Article 77 of any notification provided in accordance with this paragraph.
9. Before launching a procurement procedure for a common procurement action under this Regulation, the procurement agent shall inform Member States not participating in the planned procedure and give them the opportunity to submit, within a reasonable timeframe, a substantiated request to the procurement agent to purchase additional quantities of defence products for them. If such a request is submitted, the common procurement contract shall reserve the right of participating contracting authorities to purchase additional quantities of defence products for such Member States, without prejudice to applicable Union and national rules relating to the export of defence products.
10. Before launching a procurement procedure for a common procurement action under this Regulation, the procurement agent shall, where possible, also inform associated countries and Ukraine of the planned procedure and give them the opportunity to submit a substantiated request to the procurement agent to purchase additional quantities of defence products for them. If such a request is submitted, the common procurement contract shall reserve the right of participating contracting authorities to purchase additional quantities of defence products for associated countries and Ukraine.
Industrial reinforcement actions
1. Industrial reinforcement actions shall consist of activities related to accelerating the adjustment to structural changes of the production capacity of defence products, including their components and corresponding raw materials insofar as they are intended or used wholly for the production of defence products, in particular:
(a)
the optimisation, expansion, modernisation, including automation, upgrading or repurposing of existing, or the establishment of new, production capacity of defence products, components and corresponding raw materials, including on the basis of the procurement or acquisition of the requisite machine tools and any other necessary input;
(b)
the establishment of cross-border industrial partnerships, including through public-private partnerships or other forms of industrial cooperation including SMEs and small mid-caps, in a joint industrial effort, including activities that aim to coordinate the sourcing or reservation and stockpiling of defence products, components and corresponding raw materials and to coordinate production capacities and production plans;
(c)
the building-up and making available of reserved surge manufacturing capacities of defence products, their components and corresponding raw materials, in accordance with ordered or planned production volumes;
(d)
fostering the industrialisation and commercialisation of defence products developed in the framework of actions funded by the Union or of other cooperative activities conducted with support by at least two Member States, including through the establishment of cross-border industrial partnerships, public-private partnerships or other forms of industrial cooperation and through the ramping-up of initial production and of licensing production, where appropriate;
(e)
the testing, including the necessary infrastructure, and, as appropriate, reconditioning certification of defence products with a view to addressing their obsolescence and making them useable by end-users.
2. For activities referred to in paragraph 1, point (d), the action shall be carried out by legal entities cooperating within a consortium of at least three eligible legal entities, of which at least two shall be established in different Member States. At least three of those eligible legal entities established in at least two different Member States shall not, during the entire period in which the action is carried out, be controlled, directly or indirectly, by the same legal entity and shall not control each other.
3. Notwithstanding paragraph 2, the activities referred to in paragraph 1 may be carried out by a SEAP.
4. For the production of ammunition and missiles, recipients of Union funding or relevant governmental authorities of the Member States concerned shall have the ability to decide, without restrictions imposed by non-associated third countries or by non-associated third-country entities, on the definition, adaptation and evolution of the design of the defence product concerned, including the legal authority to substitute or remove components that are subject to restrictions imposed by non-associated third countries or by non-associated third-country entities, or alternatively, by way of derogation from Article 10(5), shall have obtained a legally binding commitment from the non-associated third country or the non-associated third-country entity concerned that they will obtain such ability to decide within a reasonable timeframe commensurate with the complexity of the action concerned, and in any event no later than 31 December 2033.
Supporting actions
1. Supporting actions shall consist of:
(a)
activities to increase interoperability and interchangeability, including the cross-certification of defence products and activities leading to mutual recognition of certification, or to facilitate the implementation of military standards, in particular NATO standards and other relevant standards, thus reducing any excessive differentiation of defence products across the Union;
(b)
activities to facilitate access to the defence market for SMEs, mid-caps and start-ups and support to obtain the necessary quality and production certifications;
(c)
the capacity-building, training, reskilling or upskilling of personnel in relation to the activities referred to in Article 10(1);
(d)
the procurement of physical and cyber protection systems in relation to the activities referred to in Article 12;
(e)
coordination and technical support actions, in particular addressing identified bottlenecks in production capacities and supply chains with a view to securing and accelerating the production of crisis-relevant products in order to ensure their effective supply and timely availability;
(f)
the establishment of a European Military Sales Catalogue as referred to in Chapter V;
(g)
support for the establishment and functioning of SEAPs, including for the purpose of establishing, managing and maintaining defence industrial readiness pools;
(h)
activities with the aim of the rapid adaptation and modification of civilian products for defence applications;
(i)
defence innovation actions, including emergency defence innovation actions where the measure referred to in Article 68 is activated.
2. For activities referred to in paragraph 1, point (a), the action shall be carried out by legal entities cooperating within a consortium of at least three eligible legal entities, of which at least two shall be established in at least two different Member States. At least three of those eligible legal entities shall not, during the entire period in which the action is carried out, be controlled, directly or indirectly, by the same legal entity and shall not control each other.
3. Notwithstanding paragraph 2, the activities referred to in paragraph 1 may be carried out by a SEAP.
Source: EUR-Lex (Publications Office of the EU), © European Union, reuse permitted under Commission Decision 2011/833/EU.
