Changes from plenary report to adopted text

Removed(d) the effort linked to ramp-up of necessary manufacturing capacities;

Removed(da) the contribution to the reduction of dependencies on non-associated countries;

Removed(e) the procurement of additional quantities for other Member States (defence industrial readiness pool);

Removed(ea) the procurement of additional quantities for Ukraine and Moldova.

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Removed1. The Programme shall aim to increase the competitiveness, productivity and readiness of the EDTIB ▌ in particular through:

Removed(a) initiating and speeding up the adjustment of industry to the rapid structural changes imposed by the evolving security environment, in particular the strategic necessity for Member States to be able to deploy capabilities without control or restriction by non-associated third countries or entities, including through:

Removed(i) the creation, adaptation, modernisation and ramp-up of its manufacturing capacities of defence and crisis-relevant products throughout the Union;

Removed(ii) the opening of the supply chains for cross-border cooperation and effective availability and supply throughout the Union, involving in particular, to a significant extent, SMEs, small mid-caps and other mid-caps, and ensuring the development of the EDTIB throughout the Union, with a view to building industrial redundancies in order to increase the Union’s resilience;

Removed(iii) the improvement and acceleration of the capacity of adaptation of supply chains for crisis-relevant products, the creation of manufacturing capacities or their ramp-up, and a reduction of their lead time for production and delivery of defence products throughout the Union, including through stockpiling.

Removed(b) increasing cross-border cooperation in defence procurement in order to contribute to solidarity, in particular to ensure that stockpiling from actions under this Regulation will be located near or in the Member States with the highest exposure to the risk of materialisation of conventional military threats, prevent crowding-out effects, increase the effectiveness of public spending and reduce excessive fragmentation, ultimately leading to an increase in the standardisation of defence systems and greater interoperability and interchangeability, and ensuring the fulfilment of Member States’ needs in terms of quality, availability and cost of defence products.

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Removed1. The financial envelope for the implementation of the Programme for actions reinforcing the EDTIB shall be composed of:

Removed(a) ▌EUR 1 500 million in current prices from the general budget for the period from … [date of entry into force of this Regulation] until 31 December 2027;

Removed(aa) at least EUR 15 000 million in additional contributions provided by the Member States in accordance with the second subparagraph of this paragraph and Article 6;

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RemovedThe Member States contributions under point (aa) of this paragraph may originate from the use of financial assistance received under the Security Action for Europe (SAFE) through the reinforcement of European defence industry instrument (the ‘SAFE instrument’), established by Proposed Council Regulation (EU) XXXX/XXXX [COM(2025)0122], or from any other national source.

Removed2. In order to respond to unforeseen situations or to new developments and needs, the Commission may reallocate the amount allocated to actions referred to in paragraph 1 of this Article and in paragraph 1 of Article 19b, by a maximum of 20 %, except for the additional financial resources as referred to in Article 19c(2), which shall not be reallocated.

Removed3. The amount referred to in paragraph 1 and 5 of this Article and the amounts of additional contributions referred to in Article 6 may also be used for technical and administrative assistance for the implementation of the Programme, such as preparatory, monitoring, control, audit and evaluation activities, including price investigations and corporate information technology systems and platforms, and all other technical and administrative assistance or staff-related expenses incurred by the Commission for the management of the Programme/other elements of the subject matter.

Removed4. In addition to Article 12(4) of the Financial Regulation, unused commitment and payment appropriations shall be automatically carried over and may be committed and used, respectively, until 31 December of the following financial year. The amount carried over shall be used first in the following financial year. The Commission shall inform the European Parliament and the Council of commitment appropriations carried over in accordance with Article 12(6) of the Financial Regulation.

Removed5. By way of derogation from Article 212(3), first, second and fourth subparagraphs of the Financial Regulation, any revenues and repayments from financial instruments established under this Regulation shall constitute internal assigned revenue within the meaning of Article 21(5) of the Financial Regulation, to the Programme or its successor programme.

Removed6. In addition to Article 15 of the Financial Regulation, commitment appropriations corresponding to the amount of recoveries and of decommitments shall be made available again to the Programme or the Ukraine Support Instrument or their successors in the context of the budgetary procedure.

Removed7. Budgetary commitments for activities extending over more than one financial year may be broken down over several years into annual instalments.

Removed8. Appropriations may be entered in the Union budget beyond 2027 to cover the expenses necessary to fulfil the objectives set out in Article 4, to enable the management of actions not completed by the end of the Programme, as well as expenses covering critical operational activities and services.

Removed1. Member States, European 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 the defence Supply Chains Transformation (FAST) referred to in Article 19 of this Regulation in accordance with Article 211(2) of the the Financial Regulation. Such financial contributions shall constitute external assigned revenue within the meaning of Article 21(2), points (a), (d), or (e) or Article 21(5) of the Financial Regulation.

Removed1a. With the aim of reaching amount of at least EUR 15 000 million referred to in Article 5(1), point (aa), the Member States may contribute to the Programme in the form of additional financial contributions referred to in paragraph 1 of this Article pro rata to the relative share of each contributing Member State in the gross national income of the Union. The Commission shall conclude agreements with the contributing Member States setting out the payment conditions.

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Removed3. Resources allocated to Member States under shared management may, at their request, be transferred to the Programme subject to the conditions set out in the relevant provisions of Regulation (EU) 2021/1060 of the European Parliament and the Council. The Commission shall implement those resources directly in accordance with Article 62(1), point (a) of the first subparagraph, of the Financial Regulation or indirectly in accordance with point (c) of that subparagraph. They shall be added to the resources referred to in Article 5(1), point (a) of this Regulation. Those resources shall be used for the benefit of the Member State concerned. These contributions shall not count towards the Member States' proportional share under Article 5(1), point (aa).

Removed4. Where the Commission has not entered into a legal commitment under direct or indirect management for resources transferred in accordance with paragraph 3 and at the latest in the year 2028, the corresponding uncommitted resources may be transferred back to one or more respective source programmes, at the request of the Member State, in accordance with the conditions set out in the relevant provisions of Regulation (EU) 2021/1060 of the European Parliament and of the Council. The Commission shall inform the European Parliament and the Council of any transfers, returns or reallocations carried out under this paragraph.

Removed4a. The Commission shall report annually to the European Parliament and to the Council on the implementation of contributions under this Article, including the amount received from each Member State, and its allocation to each Programme objective.

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Removed1. 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 the contribution does 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.

Removed2. In order to be awarded a Seal of Excellence under the Programme, actions shall comply with all of the following conditions:

Removed(a) they have been assessed in a call for proposals under the Programme;

Removed(b) they comply with the minimum quality requirements of that call for proposals;

Removed(c) they are not financed under that call for proposals due to budgetary constraints.

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Removed1. The Programme shall be implemented under direct management in accordance with the Financial Regulation or under indirect management with bodies referred to in Article 62(1), point (c), of the Financial Regulation.

Removed2. Union funding may be provided in any of the forms laid down in the Financial Regulation, in particular grants, prizes, procurement, and financial instruments within blending operations ▌in accordance with Title X of the Financial Regulation.

Removed3. By way of derogation from Article 192(2) of the Financial Regulation, activities referred to in Article 13, ▌for which Union funding is provided in the form of a grant, and profit is made, the Commission shall 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. The profit is 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 programme may set out further details.

Removed3a. By way of derogation from paragraph 3, the Commission shall refrain from recovering funds provided to small and medium-sized enterprises (SMEs) and small middle capitalisation companies (small mid-caps).

Removed4. 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 ... [date of entry into force of this Regulation] and have not been completed before the signature of the grant agreement.

RemovedThe Programme shall be open to the participation of members of the European Free Trade Association which are members of the EEA, in accordance with the conditions laid down in the Agreement on the European Economic Area (associated countries).

Removed1. The eligibility criteria set out in paragraphs 2 to 7 of this Article shall apply in addition to the criteria set out in accordance with the Financial Regulation.

Removed2. Recipients of Union funding shall be established in the Union or in an associated country and their executive management structures shall be in the Union or in an associated country.

Removed3. The infrastructure, facilities, assets and resources of the recipients involved in an action which are used for the purposes of the action shall be located on the territory of a Member State or of an associated country for the entire duration of the action. ▌

Removed3a. By way of derogation from paragraph 3 of this Article, where recipients 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 or 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.

Removed4. 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.

Removed5. By way of derogation from paragraph 4, a legal entity established in the Union or in an associated country and controlled by a non-associated third country or a non-associated third-country entity shall be eligible to be a recipient ▌or if guarantees approved by the Member State or the associated country in which it is established in accordance with its national procedures are made available to the Commission.

RemovedThe guarantees shall provide assurances that the involvement in an action of such a legal entity 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 Treaty on European Union (TEU), or the objectives set out in Article 4. The guarantees shall also comply with Article 11(2), point (c). The guarantees shall in particular substantiate that, for the purposes of an action, measures are in place to ensure that:

Removed(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 knowhow needed for the purposes of the action, or that undermines its capabilities and standards necessary to carry out the action;

Removed(b) access by a non-associated third country or by a non-associated third-country entity to 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;

RemovedIf considered to be appropriate by the Member State or the associated country in which the legal entity is established, additional guarantees may be provided.

RemovedThe Commission shall inform the committee referred to in Article 58 of any legal entity considered to be eligible in accordance with this paragraph, as well as of any concern regarding a possible lack of compliance with the conditions set out in this paragraph.

Removed5a. The Commission shall make available to Member States and associated countries a standardised template for the provision of guarantees as referred to in paragraph 5.

Removed6. 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 this does not contravene the security and defence interests of the Union and its Member States. Such cooperation shall be consistent with the objectives set out in Article 4 and comply with Article 11(2), point (c).

RemovedThere shall be no unauthorised access by a non-associated third country, or other non-associated third-country entity to classified information relating to the carrying out of the action and potential negative effects over security of supply of inputs critical to the action shall be avoided.