Changes from plenary report to adopted text

Removed(c) for actions referred to in Article 13, the maximum number of legal entities forming part of the consortium, which shall not exceed 15 legal entities;

Removed(d) the procedure for the evaluation and selection of proposals, including, where relevant, a description of the milestones, designed in such a way as to mark substantial progress in the implementation of actions, the results to be achieved and the associated amounts to be disbursed, as well as the arrangements for the verification of the milestones, the fulfilment of conditions and the achievement of results;

Removed(e) the methods for determining and, where applicable, adjusting the funding.

Removed2b. Industrial reinforcement actions which also generate strategic added value for the defence of the Union in cases of materialisation of conventional military threats, in particular stockpiling, shall be promoted in locations facing a higher exposure to the risk of materialisation of such conventional military threats.

Removed2c. The Commission shall take into account the coherence between different relevant instruments.

Removed1. In order to leverage, de-risk and speed-up investments needed to increase the defence manufacturing capacities of SMEs and small mid-caps, a blending operation offering debt and/or equity support shall be established (Fund to Accelerate defence Supply-chains’ Transformation (FAST). It shall be implemented in accordance with Title X of the Financial Regulation ▌.

Removed1a. The Commission shall develop a competitive bidding framework for FAST.

Removed2. The specific objectives pursued by the FAST shall be the following:

Removed(a) achieve a satisfactory multiplier effect in line with the debt and equity mix and contributing to attracting both public and private-sector financing;

Removed(b) provide support to SMEs (including start-ups and scale-ups) and small midcaps across the Union, which are facing difficulties in accessing finance and which:

Removed(i) industrialise defence technologies and/or manufacture defence products or have imminent plans to do so; or

Removed(ii) are part of the defence industry’s supply chain or have imminent plans to become part it.

Removed(c) accelerate investment in the field of manufacturing defence technologies and products, and therefore strengthen the security of supply of the Union’s defence industry value chains.

RemovedThe Ukraine Support Instrument

RemovedObjectives

Removed1. The Ukraine Support Instrument shall contribute to the recovery, reconstruction and modernisation of the Ukrainian DTIB and aim to increase the readiness and competitiveness of the Ukrainian DTIB and to support Ukraine in manufacturing most critical capacities in quantities needed to respond to current military threats against its sovereignty and territorial integrity, in particular through:

Removed(a) scaling-up direct investment into Ukraine industrial defence capacities, creating new or adapting or ramping-up new manufacturing capacities in Ukraine, and licensing production cooperation through public-private partnerships or other forms of cooperation, such as joint ventures;

Removed(b) increasing procurement of defence capacities produced in Ukraine, particularly by applying the “Danish model”;

Removed(c) increasing cooperation on common procurement of defence products in accordance with Ukraine’s military needs;

Removed(d) enhancing cross-border cooperation between the EDTIB and the Ukrainian DTIB, including by providing technical assistance and incentivizing exchanges of personnel and best practices;

Removed(e) supporting the protection of Ukraine DTIB’s assets;

Removed(f) supporting Ukraine in its progressive alignment with Union rules, standards, policies and practices (‘acquis’) with a view to future Union membership.

RemovedBudget

Removed1 The budget for the implementation the Ukraine Support Instrument for actions reinforcing the Ukrainian DTIB shall be composed of at least EUR 5 000 million in additional contributions provided by the Member States in accordance with the second subparagraph of this paragraph and Article 19c to the extent earmarked, subject to the conclusion of the agreement referred to in Article 59.

RemovedThe Member States contributions under the first paragraph 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.

Removed1a. 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 Article 5 and in paragraph 1 of this Article, by a maximum of 20 %, except for the additional financial resources as referred to in Article 19c(2), which shall not be reallocated.

Removed2. The amount referred to in paragraphs 1 of this Article and the amounts of additional contributions referred to in Article 19c may also be used for technical and administrative assistance to Ukrainian authorities for actions supporting the implementation of the Ukraine Support Instrument, 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 Instrument/other elements of the subject matter.

Removed3. 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.

Removed4. 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.

Removed5. Budgetary commitments for activities extending over more than one financial year may be broken down over several years into annual instalments.

Removed6. 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 Ukraine Support Instrument, as well as expenses covering critical operational activities and services.

RemovedAdditional financial resources

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 Ukraine Support Instrument in accordance with Article 208(2) of 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 the amount of at least EUR 5 000 million referred to in Article 19b(1), the Member States may contribute to the Ukraine Support Instrument 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.

Removed2. Any additional amounts received under the relevant Union restrictive measures shall be external assigned revenue within the meaning of Article 21(5) of the Financial Regulation and shall be used for actions under the Ukraine Support Instrument, including for actions reinforcing the Ukrainian DTIB.

Removed2a. The Commission shall report annually to the European Parliament and to the Council on the implementation of contributions under Article 19b, including the amount received from each Member State, and its allocation to each Instrument objectives.

RemovedAlternative, combined and cumulative funding

Removed1. The Ukraine Support Instrument 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 Ukraine Support Instrument, 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 Ukraine Support Instrument, actions shall comply with all of the following conditions:

Removed(a) they have been assessed in a call for proposals under the Ukraine Support Instrument;

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

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

RemovedImplementation and forms of Union funding

Removed1. The Ukraine Support Instrument 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. Except for blending operations, Union funding may be provided in any of the forms laid down in the Financial Regulation 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(-1), point (d), for which Union funding is provided in the form of a grant under the Ukraine Support Instrument and profit is made, the Commission may 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.

Removed4. 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. Such financial contributions shall be awarded on the condition that they comply with the criteria set out in Article 196(2) of the Financial Regulation.

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 Ukraine and their executive management structures shall be in the Union or in Ukraine. Legal entities established in the non-government-controlled areas of Ukraine shall not be eligible for support under this Regulation until such areas are fully retaken by Ukraine.

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 Ukraine for the entire duration of the action.

Removed3a. By way of derogation from paragraph 3 of this Article, where recipients have no readily available alternatives or relevant infrastructure, facilities, assets and resources in the Union or in Ukraine, they may use their infrastructure, facilities, assets and resources which are located or held outside the territory of the Member States or of Ukraine, provided that such use does not contravene the security and defence interests of the Union and the Member States and is consistent with the objectives set out in Article 19b. 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 third country or by a third-country entity other than Ukraine.

Removed5. By way of derogation from paragraph 4, a legal entity established in the Union and controlled by a third country or a third-country entity other than Ukraine shall be eligible to be a recipient if guarantees approved by the Member State in which it is established or by Ukraine, 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 of this Regulation. 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 third country or by a 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, where appropriate;

RemovedIf considered to be appropriate by the Member State 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 Ukraine 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 Ukraine, or controlled by a third country or by a 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).