What changed

(1) The return of high-intensity warfare brought about by Russia’s unprovoked and unjustified war of aggression against Ukraine constitutes an existentiala challengethreat forto the Union, which requires a significant and lasting increase in the capacity of Member States to reinforce their defence capabilities and readiness. The long-term deterioration of regional and global security requires an in-depth transformation of the European Defence Technological and Industrial Base (EDTIB) to ensure its ability to deliver innovative defence productsproducts, including technologies, required by Member States’ armed forces in scalesufficient quantities and time,within the required timeframe, in particular in times of war.

(3) Innovation is critical to achieveachieving and supportsupporting Europe’s defence readiness, particularly in today’s era of intensifying threats, systemic competition, and geopolitical rivalries. The proliferation of threats has sparked an international arms race and a global technological competition, with emerging and disruptive technologies in fields such as AI, quantum, robotics, cyber and space,space playing a decisive role in maintaining strategic advantage and ensuring credible deterrence. Achieving thisthose objectives requires rapid testing, validation and integration of thesethose technologies into defence capabilities, as well as continuous engagement with the technology and innovation ecosystem. It also requires that cybersecurity and cyberresilience are integrated throughout the lifecycle of all supported technologies and products, including development, supply chain management, deployment and maintenance phases.

(7) Regulation (EU) 2025/2653 has also introduced targeted changes to Regulation (EU) 2021/697, particularly with regards to the actions on disruptive technology for defence. Specifically, those changes provide the possibility to define in the work programme the most appropriate forms of selection and award criteria and procedures for each call for project proposals. In addition, Regulation (EU) [reference of defence readiness omnibus], has introduced further amendments to Regulation (EU) 2021/697, expanding this possibility to cover all calls launched under the European Defence Fund, particularly those aimed at SMEs.

(7) Regulation (EU) 2025/2653 of the European Parliament and of the Council introduced defence technologies as a fourth area of investment under STEP, alongside biotechnologies, digital technologies and clean technologies. Regulation (EU) 2024/795 provides for the award of a Sovereignty Seal to projects that comply with the minimum quality requirements set out in the programmes listed in that Regulation. The Sovereignty Seal is to be used as a quality label that offers the possibility of receiving funding under other Union programmes, whether total, cumulative or combined, or from Member States. For projects that comply with minimum quality requirements set out in this Regulation to be eligible for a Sovereignty Seal, Regulation (EU) 2024/795 should be amended to include the programme established by this Regulation on the list of eligible programmes.

(8) In addition to those substantial efforts, a new programme should be established (the AGILE Programme, ‘the Programme’) to provide rapid, agile and targeted support to SMEs, including innovative start-ups and scaleups insofar as they meet the requirements of the SME definition, to develop innovative defence solutions. The programme should focus on supporting the development and uptake by Member States of emerging and disruptive products and technologies for defence up to a high technology readiness level, including the adaptation of civil technologies for defence applications, to address the most urgent capability development needs of Member States and associated third countries, with a particular focus on low cost defence solutions. It should also promote the development of critical components for emerging and disruptive products and technologies for defence, reinforcing security of supply and reducing strategic dependencies. The Programme should also promote civil-military synergies and broad participation of innovative entities from all Member States, in particular from those with less developed defence innovation ecosystems or lower participation in existing Union defence programmes. It should contribute to strengthening the inclusiveness, competitiveness and technological resilience of the EDTIB, including by encouraging cooperation across Union industrial value chains and facilitating access for undertakings established in different Member States, while taking into account the Union’s evolving security environment and the need to strengthen defence readiness and resilience across all regions of the Union. The Programme should contribute to strengthening the technological and industrial base of the Union in the field of defence innovation.

(8) Regulation (EU) 2025/2653 ▌ has also introduced targeted changes to Regulation (EU) 2021/697 of the European Parliament and of the Council, particularly with regard to the actions relating to disruptive technology for defence. Specifically, those changes provide the possibility to define in the work programme the most appropriate selection and award criteria and procedures for each call for project proposals. In addition, Regulation (EU) …/… of the European Parliament and of the Council+ ▌ has introduced further amendments to Regulation (EU) 2021/697, expanding this possibility to cover all calls launched under the European Defence Fund, particularly those aimed at SMEs.

(9) In order to ensure the efficient implementation of the EU budget, the AGILE Programme will be fully complementary to existing EU instruments supporting defence innovation. EUDIS supports non-traditional defence actors within the broader EDF framework, including R&D grants for consortia and other support actions targeting single entities (Business Accelerator, Matchmaking). HEDI, managed by the European Defence Agency (EDA), fosters cooperation among Member States on defence innovation. The EIC is a key EU innovation programme to identify, develop and scale up breakthrough technologies and disruptive innovation. Following the adoption of Regulation (EU) 2025/2653, the EIC STEP Scale Up Scheme will provide direct equity financing to help defence and dual use companies to scale up their innovations. AGILE fills a distinct gap, as it will offer streamlined, direct support to individual SMEs, including innovative startups and scaleups, for the development of innovative solutions and its uptake by Member States and industry, with very short award timelines and a clear link to the capability needs of Member States. The Programme could also allow, where appropriate, the participation of small-scale consortia and cooperation with research and technology organisations, technical universities, incubators and other innovation support entities, in order to facilitate the emergence of new entities in the field of defence and strengthen the Union’s defence innovation ecosystem. It should therefore enable the Union to pilot new approaches to supporting defence innovation, while complementing existing EU instruments across various maturity levels, consortium sizes, timeframes and technological domains. The rapid evolution of defence threats requires a shift towards a more flexible approach to enable innovative companies (particularly SMEs, including innovative startups and scaleups) to respond quickly to identified capability challenges. The Programme should therefore prioritise challenge-based innovation activities with rapid iteration cycles, directly linked to Member States' priority operational requirements. Despite the distinct gap filled by AGILE, the Commission should establish synergy pathways enabling the seamless transition of AGILE-funded entities and results into Horizon Europe downstream instruments, including the EIC Accelerator and the EUDIS Business Accelerator, so as to prevent duplication and maximise the lifecycle value of Union-funded innovation.

(9) In addition to ▌the support provided through existing Union instruments, a new programme should be established (the ‘Programme’) to provide rapid, agile and targeted support to SMEs ▌ to develop innovative defence solutions and ensure their rapid delivery to Member States and associated third countries, with a focus on cost-efficiency. The Programme should focus on supporting the rapid development of emerging and disruptive defence products, including components necessary for their production, up to a high technology readiness level, including the adaptation of civil technologies for defence applications. The Programme should address the most urgent capability development needs of Member States and associated third countries, taking into consideration the capability priorities identified in the context of the common foreign and security policy (CFSP) and the priority capability areas identified at Union level, as well as NATO standards and other relevant standards, with a particular focus on low-cost defence solutions. The Programme should also accelerate the innovation cycles of emerging and disruptive defence products, aligning their development with the urgent needs of Member States and associated third countries, while leveraging the innovation potential of the Union’s defence industry as a whole. It should also foster the uptake of such products by Member States, associated third countries and prime contractors, supporting the scaling-up of SME-developed solutions across Europe and their integration into cross-border defence supply chains and strengthening security of supply for defence products within the Union, ultimately reducing strategic dependencies and contributing to reinforcing the technological edge and operational capabilities of Member States.

(9a) The Programme should be designed and implemented in a manner that ensures complementarity with relevant NATO activities in the field of defence innovation, including the Defence Innovation Accelerator for the North Atlantic (DIANA), the NATO Innovation Fund and the Rapid Adoption Action Plan, in order to maximise efficiency of public spending, ensure interoperability of the products supported and accelerate the development and uptake of emerging and disruptive technologies, while fully respecting the Union’s decision-making autonomy.

(10) In order to ensure the efficient implementation of the Union budget, the ▌ Programme will be fully complementary to existing Union instruments supporting defence innovation. The EUDIS supports non-traditional defence actors within the broader EDF framework, including research and development grants for consortia and other support actions targeting single entities, such as Business Accelerator and Matchmaking ▌ . The Hub for EU Defence Innovation (HEDI), managed by the European Defence Agency, fosters cooperation among Member States on defence innovation. HEDI helps to connect innovation support at Union level to commonly identified capability needs by structuring innovation activities around operational requirements and by linking promising solutions to testing, experimentation, user engagement and potential pathways towards the uptake of those solutions. Through this approach, HEDI contributes to ensuring that defence innovation support is not only responding to emerging technological developments, but is also anchored in military relevance and practical uptake. The EIC is a key Union innovation programme to identify, develop and scale up breakthrough technologies and disruptive innovation. Following the adoption of Regulation (EU) 2025/2653, the EIC STEP Scale Up Scheme will provide direct equity financing to help defence and dual-use companies to scale up their innovations. The Programme fills a distinct gap, as it will offer streamlined, direct support to individual SMEs ▌ for the development of innovative solutions and the uptake of those solutions by Member States and industry, with very short award timelines and a clear link to the capability needs of Member States.

(10) In particular, the Programme should seek to significantly accelerate the innovation cycles of defence products and technologies with high disruptive potential, expected to be procured and fully exploitable within the next 1 to 3 years. It should also support the continuous improvement, or the novel integration, of existing disruptive and innovative defence products and technologies in response to rapidly evolving operational requirements and technological developments. It should offer innovators the greatest possible flexibility to propose novel solutions, including from single legal entities, while allowing for subcontracting of specific tasks or collaboration with other entities during implementation.

It should therefore enable the Union to pilot new approaches to support defence innovation, while complementing existing Union instruments across various maturity levels, consortium sizes, timeframes and technological domains. The rapid evolution of defence threats requires a shift towards a more flexible approach allowing innovative companies, in particular SMEs, ▌ to respond quickly to identified capability challenges. The Programme should therefore prioritise challenge-based innovation activities with rapid iteration cycles, directly linked to Member States' priority operational requirements.

(11) However, the persistent structural challenge for European defence SMEs, including innovative startups and scaleups, is the gap between successful innovation and operational deployment by the armed forces of Member States and associated third countries. To address that gap, the Programme should align with the genuine and prioritised defence needs of Member States and associated third countries. By doing so, it should support the uptake of innovation solutions by their armed forces and defence industry, particularly prime contractors and first-tier subcontractors, including through industrial partnerships, transfer of technology and the integration of such solutions into existing industrial systems and supply chains. The Programme should establish a fast-track process to enable the Union to support the testing and deployment of innovative support mechanisms that address the most urgent defence readiness requirements, including in support of European Readiness Flagships and European Defence Projects of Common Interest. Member States should also provide early guarantees to procure successful AGILE projects.

(11) The Commission should seek to maximise synergies among Union programmes in support of innovation. To this end, it could propose fast-track pathways between the Programme and other relevant Union initiatives, such as the EIC Accelerator, the STEP Scale Up Scheme and the EUDIS Business Accelerator. Where relevant, the Programme should also consider potential synergies with NATO activities in the field of defence innovation, including NATO's Defence Innovation Accelerator for the North Atlantic (DIANA).

(11a) Some New Defence actors struggle with the lack of local alternatives from the EDTIB for critical components of defence products, in particular in the context of UAS production. The Programme should also support development actions of SMEs willing to localize production in the Union and associated countries, assisting them with the adaptation of civilian components, including certification and testing.

(12) The Programme should seek to significantly accelerate the innovation cycles of defence products and technologies with high disruptive potential, including those not yet available on the market, with a view to ensuring that they are fully exploitable and ready for use by end users within one to three years. The Programme should also ensure, where relevant, that Programme-supported products integrate appropriate cybersecurity and cyber-resilience safeguards. It should offer innovators the greatest possible flexibility to propose novel solutions, including when acting as single legal entities, while allowing for subcontracting of specific tasks or collaboration with other entities during implementation.

(12) To that end, the Programme should support activities involving field testing, experimentation and demonstrations, including by drawing on the ongoing work of the EDA, where appropriate. These activities should allow entities to validate innovative solutions in realistic operational conditions, generating real-time feedback that can be used to refine and improve the solutions through an iterative process. The active involvement of Member States relevant industrial actors, such as prime contractors, first-tier subcontractors and innovation support entities, is crucial at every stage of this process, from setting up testing requirements to assessing demonstrated capabilities. Furthermore, the cooperation with and facilitation by system integrators and original equipment manufacturers in the testing and demonstration processes can facilitate the uptake of Programme outcomes. This will help create credible demand signals and facilitate subsequent procurement decisions. Additionally, the Programme can support the uptake of new technologies and products by aggregating demand, and using innovative procurement mechanisms, such as innovation partnerships. Shared platforms and services can also be developed to address the common operational needs of multiple end users.

(13) A persistent structural challenge faced by European defence SMEs ▌ is the gap between successful innovation and operational deployment by the armed forces of Member States and associated third countries. To address that gap, the Programme should align with the genuine and prioritised defence needs of Member States and associated third countries. In doing so, it should support the uptake of innovative solutions by their armed forces and defence industries, particularly prime contractors and first-tier subcontractors. The Programme should establish a fast-track process to enable the Union to support the testing and deployment of innovative support mechanisms that address the most urgent defence readiness requirements, including in support of the priority capability areas identified at Union level and European Defence Projects of Common Interest (EDPCIs), where relevant. The Programme should establish a fast-track process for accessing testing and experimentation facilities in the Union and, where relevant and subject to their agreement, in associated third countries.

(12 a) Where emerging and disruptive products and technologies for defence have successfully undergone testing, experimentation or demonstration, beneficiaries should be supported in identifying credible pathways towards market uptake, scale-up financing and integration into more complex defence systems. To that end, the Programme should facilitate matchmaking and investment-readiness activities involving innovative SMEs, including start-ups and scale-ups, Member States’ armed forces, relevant European defence industrial actors, including prime contractors, system integrators and first-tier subcontractors, and private investors, while preserving fair competition, equal treatment and the protection of intellectual property.

(14) The Programme should support activities involving field testing, experimentation and demonstrations, including by drawing on the ongoing work of the European Defence Agency, where appropriate. Those activities should allow entities to validate innovative solutions in realistic operational conditions, generating real-time feedback that can be used to refine and improve the solutions through an iterative process. The active involvement of Member States and relevant industrial actors, such as prime contractors and first-tier subcontractors, is crucial at every stage of that process, from setting up testing requirements to assessing demonstrated capabilities. That involvement can help create credible demand signals and facilitate subsequent procurement decisions. Additionally, the Programme can support the uptake of new technologies and products by aggregating demand and using innovative procurement mechanisms, such as innovation partnerships. Shared platforms and services can also be developed to address the common operational needs of multiple end users.

(13)(15) Space-based capabilities have become indispensable enablers of modern defence and security operations, providing critical functions including intelligence, surveillance and reconnaissance, secure communications, positioning, navigation and timing, and early warning. Moreover, the increasing reliance of armed forces on space-based assets, combined with the growing vulnerability of space infrastructure to threats, makemakes the resilience and responsiveness of the European space sector a strategic priority. Space is identified in the White Paper for European Defence – Readiness 2030 as a key strategic enabler within the priority capability areas established by the EU and its Member States, and the Defence Readiness Roadmap proposes a European Space Shield as a potential flagship▌ initiative.. The dual-use nature of space technologies and services means that innovation in the space sector has direct and immediate implications for defence capabilities, and that defence-driven demand can accelerate the development and commercialisation of European space technologies. The Programme should therefore support the development of innovative space-based and space-enabled defence capabilities, by including new entrants and non-traditional actors, to enhance the Union's strategic autonomy in space and strengthen the EDTIB. This includes contributing to the development of a future Earth Observation Governmental Service (EOGS) with autonomous, resilient and defence-grade earth observation capabilities. The Programme should also support activities in the space domain to accelerate the uptake of space-based defence capabilities by Member States,States and,and by the EU,Union, in line with the Space Programme, the Secure Connectivity Programme or as regards the activities of the EUEuropean SatelliteUnion CentreSatellite (SatCen),Centre, while ensuring consistency with the relevant Union space-related initiatives.

(14)(16) ToIn order to ensure uniform conditions for implementingthe implementation of this Regulation, implementing powers should be conferred on the Commission for the adoption of work programmes.programmes and award decisions. Those powers should be exercised in accordance with Regulation (EU) No 182/2011. To ensure the swift adoption of these work programmes and, ultimately, the implementation of the Programme for the182/2011 benefit▌ of the European defence SME ecosystem, the Commission should be able to use the advisory procedure set out in ArticleParliament 4and of the aforementioned Regulation.Council.

(15) The work programme should establish challenges, defined as calls for proposals addressing specific defence needs identified in coordination with Member States, based on a structured process involving Member States so that supported projects respond to genuine and prioritised defence needs of Member States, and on the basis of the EU Capability Priorities derived from the Capability Development Plan and, as appropriate, complemented by the gaps and opportunities identified through the Coordinated Annual Review on Defence (CARD). ▌The European Defence Agency, as the body responsible for the Capability Development Plan and as host of the Hub for EU Defence Innovation (HEDI), and the European External Action Service, including the EU Military Staff, as well as representatives of associated countries, should be closely associated with the identification of challenges. The work programme could, on a strictly advisory basis, draw on input from established defence industry actors, provided that such input does not influence the design of calls for proposals in a manner detrimental to fair competition or to the participation of new defence players, in particular SMEs and innovative start-ups and scale-ups. In all cases, priority should be given to challenges that attract the broadest possible support from Member States, reflecting genuine common demand and strategic alignment, and contributing to the defence readiness of the EU as a whole. To cover the full range of innovation, the Programme should also include calls that address broader defence innovation objectives. In the selection of projects under such calls and challenges, the Commission should ensure that the Programme contributes to strengthening defence industrial capacity across the Union as a whole and to addressing urgent and lasting threats.

(17) In accordance with Article 153(3) of Regulation (EU, Euratom) 2024/2509 of the European Parliament and of the Council, the evaluation committee can be assisted by external experts, pursuant to a decision of the authorising officer responsible. To protect the confidentiality of the work of the evaluation committee, by way of derogation from Article 242(4) of the that Regulation, the list of independent experts should not be made public.

(16) The Programme aims to support the innovation efforts of non-traditional defence players, and primarily SMEs, including innovative start-ups and scaleups. By providing targeted support, the Programme seeks to accelerate the maturation and fine-tuning of their disruptive technologies and products, and bring them closer to the market, ultimately enhancing their competitiveness and growth.

(18) The work programme should set out calls for proposals, which can take the form of challenges that address specific defence needs identified in coordination with Member States through a structured process involving Member States, so that supported projects respond to the genuine and prioritised defence needs of Member States. Those specific defence needs should also be identified on the basis of the EU Capability Priorities, which are derived from the Capability Development Plan and complemented, as appropriate, by the gaps and opportunities identified through the Coordinated Annual Review on Defence. The European Defence Agency, as the body responsible for the Capability Development Plan and as host of the HEDI, and the European External Action Service, including the European Union Military Staff, as well as representatives of associated third countries, should be closely associated with the identification of challenges. The Commission should also be able to draw, on a strictly advisory basis, on input from established defence industry actors and the wider EDTIB, including prime contractors, for the formulation of challenges, with a view to addressing specific, mission-driven capability needs, provided that such input does not influence the design of calls for proposals in a manner detrimental to fair competition or to the participation of new defence actors, in particular SMEs and innovative start-ups and scale-ups. In all cases, priority should be given to challenges that attract the broadest possible support from Member States, reflecting genuine common demand and strategic alignment, and contributing to the defence readiness of the Union as a whole. To cover the full range of innovation, the Programme should also include calls that address broader defence innovation objectives. In the selection of projects under those calls, the Commission should ensure that the Programme contributes to strengthening defence industrial capacity across the Union as a whole and to addressing both urgent and lasting threats.

(16a) Russia’s war of aggression against Ukraine has caused tremendous damage in Ukraine, with estimated recovery and reconstruction costs of EUR 506 000 000 000 as of 31 December 2024. Moreover, Ukraine has lost access to international financial markets and experienced a significant drop in public revenue, while public expenditure has increased substantially. Against that background, it can be envisaged that Ukraine will have substantive funding needs in the coming years. For that reason, Ukraine should not be required to contribute financially to the Programme in order to be associated to it.

(19) The Programme aims to support the innovation efforts of non-traditional defence actors and primarily SMEs ▌ . By providing targeted support, the Programme seeks to accelerate the maturation and fine-tuning of their disruptive technologies and products and to bring those technologies and products closer to the market, ultimately enhancing the competitiveness and growth of those actors.

(17) As the AGILE Programme aims to support the innovation capacity of the Union’s defence industry, only legal entities which are established in the EU or in associated third countries and are not subject to control by non-associated third countries or by non-associated third-country entities should be eligible for support. Additionally, to protect the essential security and defence interests of the Union and its Member States, the infrastructure, facilities, assets and resources of the recipients and subcontractors involved in an action supported by the Programme should be located on the territory of a Member State or of an associated third country for the entire duration of an action, and the recipients should have their executive management structures in the EU or in an associated third country. To safeguard these essential security and defence interests, those eligibility criteria should also apply to funding provided through procurement.

(20) Third countries which are members of the European Economic Area should be able to participate in the Programme as associated third countries in the framework of the cooperation established under the Agreement on the European Economic Area, which provides for the implementation of the programmes on the basis of a decision adopted under that Agreement. Ukraine should also be able to participate in the Programme as an associated third country, in line with the Association Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and Ukraine, of the other part.

(18) The interim evaluation of the European Defence Fund (EDF) has shown that the administrative burden and time required to provide guarantees when an EU-established recipient is controlled by a non-associated third country or entity are incompatible with the speed and flexibility necessary for effective programme implementation. To address this challenge and facilitate the swift implementation of the Programme, derogations from the principle that recipients must not be controlled by entities established outside the EU or associated countries should not be permitted. Practice from previous defence industry programmes also indicates that the provision of guarantees results in additional procedural complexity and longer evaluation periods, while removing this exception is unlikely to significantly affect the number of eligible entities.

(21) Russia’s war of aggression against Ukraine has caused tremendous damage in Ukraine. Moreover, Ukraine has lost access to international financial markets and experienced a significant drop in public revenue, while public expenditure has increased substantially. Against that background, it is likely that Ukraine will have substantive funding needs in the coming years. For that reason, Ukraine will not be required to contribute financially to the Programme in order to be associated to it. The association agreements for participation in the Programme will set out the specific terms and conditions governing the participation of Ukraine in the Programme.

(19) To ensure Member States’ armed forces can benefit from cutting-edge technologies and innovation, the Programme should be able to provide incentives to attract SMEs, including innovative start-ups and scaleups, established outside the EU or associated third countries but have the potential to contribute significantly to the achievement of the Programme’s objectives. To this end, the work programme should be able to identify certain award procedures under which such SMEs may participate in the AGILE programme even if they do not yet meet the eligibility requirements relating to their establishment or the establishment of their executive management structure in the EU or an associated third country (inducement intervention). Under this approach, recipients would be granted a temporary and conditional waiver of such eligibility requirements, which they would have to comply with within the timeline specified in the legal commitment to receive Union support. The financial interests of the Union should be duly protected, and payments should only be made once the eligibility requirements have been fulfilled by the end of the waiver period.

(22) As the ▌ Programme aims to support the innovation capacity of the Union’s defence industry, only legal entities that are established in the Union or in associated third countries and are not subject to control by non-associated third countries or by non-associated third-country entities should be eligible for support. Additionally, to protect the essential security and defence interests of the Union and its Member States, the infrastructure, facilities, assets and resources of the recipients of Union funding and subcontractors involved in an action supported by the Programme should be located on the territory of a Member State or of an associated third country for the entire duration of the action, and the recipients should have their executive management structures located in the Union or in an associated third country. To safeguard those essential security and defence interests, those eligibility criteria should also apply to funding provided through procurement.

(20) To enable the inducement intervention to achieve its intended purpose, it should be possible to derogate from the eligibility requirement that recipients be established and have their executive management structure in the EU or an associated third country to receive Union support, provided such support specifically aims to facilitate compliance with those eligibility requirements, including by covering the costs associated with the relocation of the company or the establishment of its executive management structure within the EU or an associated third country. However, in order to safeguard the security and defence interests of the Union and its Member States and to ensure consistency with Union foreign policy objectives, recipients seeking to benefit from inducement interventions that are established in, or subject to control by entities or individuals from third countries whose policies or actions are incompatible with the principles and objectives of the Union's common foreign and security policy, including respect for good neighbourly relations, should not be eligible.

(23) The interim evaluation of the EDF has shown that the administrative burden and time required to provide guarantees when a recipient of Union funding established in the Union is controlled by a non-associated third country or by a non-associated third-country entity are incompatible with the speed and flexibility necessary for effective programme implementation. To address this challenge and to facilitate the swift implementation of the Programme, derogations from the principle that the recipients must not be controlled by entities established outside the Union or outside the associated third countries should not be permitted. Experience from previous defence industry programmes also indicates that the provision of guarantees results in additional procedural complexity and longer evaluation periods, while removing this exception would be unlikely to significantly affect the number of eligible entities.

(21) Given the need for the actions supported under the ▌Programme to be implemented within a short timeframe, while minimising the administrative burden on applicants, financing not linked to cost, or simplified cost options, ▌should be used where the Union support is provided in the form of a grant. Given the need to ensure swift, accessible and results-oriented support for SMEs, including innovative start-ups and scale-ups, grants under the Programme should take, whenever possible, the form of lump sums of financing in order to reduce administrative burden, increase predictability for recipients and allow them to focus on the achievement of agreed outputs. Union support should only be provided in the form of reimbursement of actual eligible costs where the objectives of a specific action cannot be achieved in any other way.

(24) To ensure Member States ▌ can benefit from cutting-edge technologies and innovation, the Programme should be able to provide incentives to attract SMEs ▌ established outside the Union or associated third countries that have the potential to contribute significantly to the achievement of the Programme’s objectives. Any such Union funding should be conditional upon the SME concerned being controlled by a Member State or an associated third country or by an entity established in a Member State or in an associated third country, and upon that SME neither being established nor having its executive management structures located in Russia or in countries supporting Russia’s war of aggression against Ukraine, taking into account the current context and, in particular, Russia's unprovoked and unjustified war of aggression against Ukraine.

(22) The functioning of the defence industry ▌does not follow the conventional rules and business models that govern more traditional markets. Demand comes almost exclusively from national governments, which also control all acquisition of defence-related products and technologies, including exports. Therefore, the defence industry, in particular small and non-traditional defence innovators, does not engage in substantial self-funded innovation projects, and Member States and associated third countries often fully fund all related costs. Furthermore, these actors face persistent barriers in accessing finance, including co-financing, in particular private finance for investments, due to the risks market actors associate with such investments. Therefore, leveraging public investment for the Union defence industry is vital, given the compelling need to boost investment in defence innovation. As these measures would not otherwise be undertaken, it appears justified that Union financial support can cover up to 100 % of the eligible costs for actions eligible under the ▌Programme.

(25) In a limited number of cases, the work programme should be able to identify certain award procedures under which SMEs could participate in the Programme even if they do not yet meet the eligibility criteria relating to their establishment or the establishment of their executive management structures in the Union or an associated third country. The mechanism, referred to in this Regulation as ‘inducement intervention’, consists of granting recipients of Union funding a temporary and conditional suspension of that eligibility criterion, which they would have to comply with within the timeline specified in the legal commitment to receive Union funding. The inducement intervention should remain without prejudice to the Programme's primary objective of supporting SMEs established in the Union or in associated third countries. Furthermore, Union funding for the costs of relocation of the establishment of those SMEs or of their executive management structures to the Union or to an associated third country can be provided. The financial interests of the Union should be duly protected and payments should only be made once the eligibility criteria have been fulfilled by the end of the period specified in the legal commitment. To preserve the targeted and exceptional nature of that support, it should be possible to provide, in the work programme, ceilings for inducement interventions and the financial support for the cost of relocation, both in terms of overall share of the financial envelope and in terms of total Union funding granted to individual recipients.

(23) To further simplify and accelerate the submission and evaluation process, the Union support should be provided through a dedicated evaluation procedure, involving certain checks after the award decision has been made. Applicants should be invited to submit proposals together with a short summary. That summary should be evaluated before the proposals are evaluated in full against the relevant award criteria set out in the work programme. This approach is intended to reduce the administrative burden on applicants and provide financial certainty as quickly as possible, while accepting a reasonable level of financial or legal risk to the Union, proportionate to the objectives pursued. The financial interest of the Union should be duly protected, and no financing should be provided until the final evaluation has been completed.

(26) To enable the inducement intervention to achieve its intended purpose, it should be possible to derogate from the eligibility criterion that the recipients of Union funding be established and have their executive management structure located in the Union or in an associated third country to receive Union funding, provided that that funding specifically aims to facilitate compliance with those eligibility criteria, including by covering ▌ the costs associated with the relocation of the company or the establishment of its executive management structure in the Union or in an associated third country.

(24) For the same purpose, it should be possible to derogate from certain obligations under Regulation (EU, Euratom) 2024/2509 concerning the content of grant applications, the selection criteria, and the evaluation procedure. This would allow the award decision to be adopted and the grant agreement to be signed on the basis of a preliminary assessment of eligibility and selection criteria, relying in particular on applicants’ declarations on honour, including with regard to control requirements. The Commission should adopt award decisions without delay and complete the final evaluation of the relevant criteria within four months of the application deadline. The financial interests of the Union should be duly protected, and payments should only be provided once the final evaluation has been completed.

(27) In order to ensure that, in the implementation of this Regulation, the international obligations of the Union and its Member States are respected, actions relating to products the use, development or production of which is prohibited by international law should not be supported by the Programme. In that respect, the eligibility of actions relating to emerging and disruptive defence products should also be subject to developments in international law. Moreover, actions for the development of lethal autonomous weapons without the possibility of meaningful human control over selection and engagement decisions when carrying out strikes against humans should not be eligible for support from the Programme, without prejudice to the possibility of providing Union funding for actions for the development of early warning systems and countermeasures for defensive purposes. Given the speed required for the development of innovative and breakthrough defence technologies and the overarching intention of the Programme to attract SMEs, start-ups, scale-ups and non-traditional defence actors, the Commission should ensure that this does not impose an undue administrative burden on applicants. Furthermore, evaluation of this requirement should not cause delays in the implementation of the Programme.

(26) To remain attractive to a broader range of potential applicants and to address an existing gap in the defence innovation cycle, it is necessary and proportionate to allow for costs incurred before the grant application is submitted to be eligible for funding, as provided for in Article 196(2) of Regulation (EU, Euratom) 2024/2509. The ▌Programme focuses on late-stage development activities that bridge the critical gap between commercialisation and procurement, bringing emerging and disruptive products and technologies for defence closer to market readiness and operational deployment. Innovative companies, in particular SMEs, often initiate and self-fund development work before formal funding opportunities become available. This will enable the Programme to support critical innovation actions that started up to three months before the closing of the call for proposals to receive Union support and accelerate their completion, ensuring the timely delivery of results addressing the most urgent challenges faced by the armed forces of Members States and associated third countries.

(29) The functioning of the defence industry ▌ does not follow the conventional rules and business models that govern more traditional markets. Demand comes almost exclusively from national governments, which also control all acquisition of defence-related products and technologies, including exports. Therefore, the defence industry, in particular small and non-traditional defence innovators, does not engage in substantial self-funded innovation projects, and Member States and associated third countries often fund all related costs. Furthermore, those actors face persistent barriers in accessing finance, including co-financing, in particular private financing for investments, due to the risks market actors associate with such investments. Therefore, leveraging public investment for the Union defence industry is vital, given the compelling need to boost investment in defence innovation. As those measures would not otherwise be undertaken, it appears justified that, without prejudice to Article 193 of Regulation (EU, Euratom) 2024/2509, Union funding can be provided to cover up to 100 % of the eligible costs for actions eligible under the ▌ Programme.

(27) Directive 2009/81/EC of the European Parliament and of the Councilprovides for a specific exclusion from the obligations ▌for contracts awarded under certain cooperative programmes based on research and development. Following the adoption of Directive XXX [Omnibus directive 2025/0177 (COD)] ▌directive 2009/81/EC makes clear that a research and development project managed by Union institutions or bodies and implemented in accordance with Union rules and funded from the Union budget, constitutes a cooperative programme conducted jointly by at least two Member States and can be continued for the phases after the research and development phase. In this case, contracts awarded under the follow-up programme should also be able to be excluded. This exemption applies, in particular, to contracts awarded within the framework of projects supported by the ▌Programme.

(30) To further simplify and accelerate the submission and evaluation process, ▌ Union funding should be provided through a dedicated evaluation procedure involving certain checks after the award decision has been made. Applicants should be invited to submit proposals together with a short summary. That summary should be evaluated before the ▌ proposals are evaluated in full against the relevant award criteria set out in the work programme. ▌ That approach is intended to reduce the administrative burden on applicants and provide financial certainty as quickly as possible, while accepting a reasonable level of financial or legal risk for the Union, proportionate to the objectives pursued. The financial interests of the Union should be duly protected and no financing should be provided before the final evaluation has been completed.

(27a) Due to the urgent need to support Ukraine with the most innovative and disruptive products from the EDTIB, any product supported by this Programme should be considered eligible for procurement by Ukraine through Regulation (EU) 2026/467 of the European Parliament and of the Council[Ukraine Support Loan].

(31) To further simplify and accelerate the submission and evaluation process, it should be possible to derogate from certain other obligations laid down in Regulation (EU, Euratom) 2024/2509. In particular, derogations from Articles 199, 201 and 203 of that Regulation, which concern the content and assessment of grant applications, and from Article 170(1), points (b) and (c), and Article 170(2) of that Regulation, which concern procurement procedures, should be allowed. Those derogations should enable the award decisions to be adopted and the grant agreements to be signed on the basis of a preliminary assessment of eligibility and selection criteria, relying, where appropriate, on applicants’ and tenderers’ declarations on honour, including with regard to the control requirements, without requiring supporting documents at that stage. Furthermore, the timelines for notifying the results of the preliminary evaluation and for the adoption of the award decision should be shortened and specified in the work programme, which would enable the Commission to act without delay. The final evaluation of the relevant criteria should nevertheless be completed within four months of the application deadline. The financial interests of the Union should be duly protected ▌ and payments should only be provided once the final evaluation has been completed.

(28) To ensure the security of classified information at the required level, it is essential to comply with the minimum standards on industrial security when signing classified funding and financing agreements. To that end, and in accordance with applicable national laws, the Member States and associated third countries on the territory of which the recipients are established, should establish a security framework - comprising Project Security Instructions and a related Security Classification Guide – in cases where the implementation of the ▌Programme would involve or generate information that warrant a classification level.

(32) As an alternative to the accelerated evaluation procedure and in order for the Union to support innovative solutions without initial artificial narrowing or limitation resulting from the specific form taken by the Union support, the Programme should allow for a more flexible and accessible approach to identifying, selecting and supporting innovative projects and ideas, including through instrument-neutral award procedures. Under that approach, ideas should be assessed and selected based on their merit with regard to their contribution to the objectives of the ▌ Programme. The most appropriate and effective budget implementation instrument under the Programme, whether a grant, procurement or another form of support, should be determined only after the selection procedure, taking into account the specific characteristics, requirements and merits of the individual project.

(29) This Regulation should apply without prejudice to Union competition rules, in particular Articles 101 to 109 of the Treaty on the Functioning of the European Union (TFEU) and the legal acts that give effect to those Articles.

(33) To remain attractive to a broader range of potential applicants and to address an existing gap in the defence innovation cycle, it is necessary and proportionate to allow costs that were incurred before the submission of the grant application to be eligible for Union funding, as provided for in Article 196(2) of Regulation (EU, Euratom) 2024/2509. The ▌ Programme focuses on late-stage development activities that bridge the critical gap between commercialisation and procurement, bringing emerging and disruptive defence products ▌ closer to market readiness and operational deployment. Innovative companies, in particular SMEs, often initiate and self-fund development work before formal funding opportunities become available. That approach will enable the Programme to support critical innovation actions that started up to three months before the closing of the call for proposals and to provide Union funding to accelerate their completion, ensuring the timely delivery of results addressing the most urgent challenges faced by the armed forces of Member States and associated third countries.

(30) In view of the urgent need to support crucial investments in defence capabilities, in particular in defence innovation in the context of pressing geopolitical challenges it is considered appropriate ▌that this Regulation should enter into force on the day following that of its publication in the Official Journal of the European Union.

(34) Directive 2009/81/EC of the European Parliament and of the Council provides for a specific exclusion from the obligations ▌ for contracts awarded under certain cooperative programmes involving research and development activities. Following the adoption of Directive (EU) …/… of the European Parliament and of the Council+, ▌Directive 2009/81/EC clarifies that a research and development project managed by Union institutions or bodies and implemented in accordance with Union rules and funded from the Union budget constitutes a cooperative programme conducted jointly by at least two Member States and can continue to cover phases following the research and development phase. In such a case, contracts awarded following those phases should also be able to be excluded. That exclusion applies, in particular, to contracts awarded within the framework of projects supported by the ▌ Programme.

(31) It is appropriate to lay down an indicative financial envelope for the ▌Programme.

(35) Regulation (EU) 2026/467 of the European Parliament and of the Council provides for Union assistance to Ukraine in the form of a loan aimed at providing predictable, continuous, flexible and timely financial and economic assistance to help meet financing needs arising from Russia's war of aggression against Ukraine and its failure to pay reparations. In accordance with Article 13(4), point (f), of that Regulation, manufacturers and subcontractors involved in the production of defence products that have fulfilled eligibility conditions under certain Union defence programmes equivalent to the eligibility conditions laid down in that Regulation can be considered to fulfil the eligibility conditions set out therein. As the Programme had not been established at the time of adoption of that Regulation, it is appropriate to amend that Regulation to provide that the recipients of Union funding under the Programme that have fulfilled equivalent eligibility conditions can be considered to fulfil the eligibility conditions under that Regulation, provided that no subsequent changes have called into question the fulfilment of those conditions.

(32) Regulation (EU, Euratom) 2024/2509 ▌ lays down the rules on the establishment and the implementation of the general budget of the Union, including the rules on grants, prizes, non-financial donations, procurement, indirect management, financial assistance, financial instruments and budgetary guarantees.

(36) To ensure the security of classified information at the appropriate level, it is essential to comply with the minimum standards on industrial security when concluding classified funding and financing agreements. ▌ To that end, and in accordance with applicable national laws, the Member States and associated third countries on whose territory the recipients of Union funding are established should establish a security framework, comprising Project Security Instructions and a related Security Classification Guide, where the implementation of the ▌ Programme would involve or generate information requiring a classification level.

(33) In accordance with Regulation (EU, Euratom) 2024/2509, Regulation (EU, Euratom) No 883/2013 of the European Parliament and of the Council, Council Regulation (EC, Euratom) No 2988/95, Council Regulation (Euratom, EC) No 2185/96 and Council Regulation (EU) 2017/1939, the financial interests of the Union are to be protected through proportionate measures, including the prevention, detection, correction and investigation of irregularities and fraud, the recovery of funds lost, wrongly paid or incorrectly used and, where appropriate, the imposition of administrative penalties.

(37) This Regulation should apply without prejudice to Union competition rules, in particular Articles 101 to 109 of the Treaty on the Functioning of the European Union and the legal acts that give effect to those Articles.

(34) In particular, in accordance with Regulations (EU, Euratom) No 883/2013 and (Euratom, EC) No 2185/96, the European Anti-Fraud Office (OLAF) can carry out investigations, including on-the-spot checks and inspections, with a view to establishing whether there has been fraud, corruption or any other illegal activity affecting the financial interests of the Union. In accordance with Regulation (EU) 2017/1939, the European Public Prosecutor's Office (EPPO) can investigate and prosecute fraud and other illegal activities affecting the financial interests of the Union as provided for in Directive (EU) 2017/1371 of the European Parliament and of the Council.

▌

(35) In accordance with Regulation (EU, Euratom) 2024/2509, any person or entity receiving Union funds is to fully cooperate in the protection of the Union’s financial interests, to grant the necessary rights and access to the Commission, OLAF, EPPO and the European Court of Auditors and to ensure that any third parties involved in implementing Union funds grant equivalent rights.

(38) It is appropriate to lay down an indicative financial envelope for the ▌ Programme.

(35a) The Commission should assess the effectiveness of the Programme with regard to its contribution to strengthening the European defence innovation ecosystem, attracting innovative companies and investment to the Union, accelerating the operational uptake of new technologies and enhancing cooperation between defence actors and the wider deep-tech ecosystem. That assessment should also evaluate whether the implementation mechanisms introduced under the Programme, including accelerated award procedures and flexible forms of Union support, should be expanded, adapted or integrated into future Union defence funding instruments. The results of the evaluation should inform future decisions on the continuation, scaling-up or long-term integration of support for disruptive defence innovation at Union level. To that effect, the Commission should publish an interim report on the implementation of the Programme, including information on the distribution of support among SMEs and the types of SMEs supported, the geographic distribution of supported entities across the Union and associated countries, the thematic distribution of supported activities, and any significant concentrations of funding among recipients or sectors, the effectiveness of simplified award procedures relative to existing EDF benchmarks, and the degree to which funded actions reduced identifiable strategic dependencies. In addition to the interim report, the Commission should publish a final report at the end of the implementation of all the actions carried out by the Programme. The reports should be made publicly available and their findings should be presented to the Parliament and the Council. Given the high-risk and high-potential nature of emerging and disruptive defence innovation, the success of the Programme should be assessed at portfolio level. The failure of individual actions to achieve all their expected results should not, in itself, be considered as a failure of the Programme, provided that the portfolio of supported actions generates valuable technological, operational, industrial or investment outcomes, including through testing, validation, integration, market uptake, follow-on investment, lessons learned or the identification of technologies not suitable for further development. The evaluation of the Programme should therefore take into account both successful outcomes and evidence-based learning resulting from unsuccessful or discontinued actions. In light of the evaluation, the Commission should assess whether the Programme, if successful, should be continued, adapted and reinforced under the 2028–2034 Multiannual Financial Framework,

(39) Regulation (EU, Euratom) 2024/2509 ▌ lays down the rules on the establishment and implementation of the general budget of the Union, including the rules on grants, prizes, non-financial donations, procurement, indirect management, financial assistance, financial instruments and budgetary guarantees.

(40) In accordance with Regulation (EU, Euratom) 2024/2509, Regulation (EU, Euratom) No 883/2013 of the European Parliament and of the Council, Council Regulation (EC, Euratom) No 2988/95 ▌ Council Regulation (Euratom, EC) No 2185/96 and Council Regulation (EU) 2017/1939, the financial interests of the Union are to be protected through proportionate measures, including measures for the prevention, detection, correction and investigation of irregularities and fraud, the recovery of funds lost, wrongly paid or misused and, where appropriate, the imposition of administrative penalties.

(41) In particular, in accordance with Regulations (EU, Euratom) No 883/2013 and (Euratom, EC) No 2185/96, the European Anti-Fraud Office (OLAF) can carry out investigations, including on-the-spot checks and inspections, with a view to establishing whether fraud, corruption or any other illegal activity affecting the financial interests of the Union has occurred. In accordance with Regulation (EU) 2017/1939, the European Public Prosecutor's Office (EPPO) can investigate and prosecute fraud and other illegal activities affecting the financial interests of the Union as provided for in Directive (EU) 2017/1371 of the European Parliament and of the Council.

(42) In accordance with Regulation (EU, Euratom) 2024/2509, any person or entity receiving Union funding is to fully cooperate in the protection of the Union’s financial interests, to grant the necessary rights and access to the Commission, OLAF, EPPO and the European Court of Auditors and to ensure that any third parties involved in implementing Union funds grant equivalent rights.

(43) In view of the urgent need to support crucial investments in defence capabilities, in particular in defence innovation, in the context of pressing geopolitical challenges, it is appropriate that this Regulation enter into force on the day following that of its publication in the Official Journal of the European Union.

(44) Given that the Programme is designed to be limited in duration and scope, it should be without prejudice to any future Union programmes or instruments providing support for defence industry policy.

(45) The Commission should assess the effectiveness of the Programme in achieving the objectives set out in this Regulation. That assessment should also evaluate whether the implementation mechanisms introduced under the Programme, including accelerated award procedures and flexible forms of Union support, should be expanded, adapted or incorporated into future Union programmes. The results of that evaluation should inform future decisions on Union support for SMEs for defence innovation. To that effect, the Commission should draw up a report on the implementation of the Programme, including information on the level of participation of SMEs, the geographical distribution of supported entities across the Union and associated third countries, the thematic distribution of supported activities, the breakdown of expenditure by type of the action supported by the Programme, the effectiveness of simplified award procedures relative to benchmarks in existing instruments, and aggregated data on the uptake of Programme-funded products. The report should be submitted to the European Parliament and the Council. Given the high-risk and high-potential nature of emerging and disruptive defence innovation, the success of the Programme should be assessed at portfolio level.

(46) Since the objective of this Regulation, in particular the strengthening of the competitiveness and the innovation capacity of the EDTIB throughout the Union, cannot be sufficiently achieved by the Member States but can rather, by reason of the scale and effects of the Programme in supporting defence innovation across the Union, be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve that objective,

(3) ‘defence product’ means goods, services and works that fall within the scope of Article 2 of Directive 2009/81/EC;

(3) ‘defence product’ means any defence-related product as referred to in the Annex to Directive 2009/43/EC of the European Parliament and of the Council, as well as works, supplies and services directly related to those products for any and all elements of their life cycle within the meaning of Article 2, point (c), of Directive 2009/81/EC;

(4) 'emerging and disruptive product or technology for defence’ means a defence product or technology that▌: (a) radically transforms the concept or conduct of defence affairs, including by replacing or rendering less effective or obsolete existing products or technologies or by making their use or integration more effective, faster, resilient or cost-efficient; and (b) is expected to be fully exploitable at the end of the action;

(4) 'emerging and disruptive defence product’ ▌ means an enhanced or completely new defence product ▌ that:

(5) ‘small and medium-sized enterprises’ or ‘SMEs’ means small and medium-sized enterprises as defined in Article 2 of the Annex to Commission Recommendation 2003/361/EC.

(a) brings about a radical transformation, including a paradigm shift in the concept and conduct of defence affairs, including by replacing existing defence technologies ▌or rendering them less effective or obsolete; and

(6) ‘background information’ means any information necessary for, or useful to the implementation of the Programme, generated before or outside the framework of the Action and provided to and used for the purposes of the Action.

(b) is expected to be fully exploitable by the end of an action supported by the Programme;

(7) ‘foreground information’ means data, know-how or information generated in the operation of the Programme, whatever its form or nature.

(5) ‘executive management structure’ means a body of a legal entity, appointed in accordance with national law and, where applicable, reporting to the chief executive officer of that entity, which is empowered to establish the legal entity’s strategy, objectives and overall direction, and which oversees and monitors the legal entity’s management decision-making;

1. The general objective of the Programme is to support the rapid innovation capacity of SMEs, including innovative start-ups and scaleups, with a view to increasing the rapid and cost-efficient delivery of emerging and disruptive products and technologies for defence that address the most recent and fast evolving challenges faced by Member States’ armed forces, in particular those stemming from Russia’s war of aggression against Ukraine▌. The Programme shall thereby foster the competitiveness of the European Defence Technological and Industrial Base (EDTIB) and contribute to strengthening the Union’s defence readiness, while reducing strategic dependencies on non-associated third countries across the full defence technology stack. The Programme shall also contribute to closing the capability gaps in operational capabilities of armed forces of Member States and associated countries.

(6) ‘results’ means any tangible or intangible effect of an action supported by the Programme, such as data, know-how or information, whatever its form or nature and whether or not it can be protected, as well as any rights attached to that effect, including intellectual property rights;

(7) ‘small and medium-sized enterprises’ (‘SMEs’) means small and medium-sized enterprises as defined in Article 2 of the Annex to Commission Recommendation 2003/361/EC;

(8) ‘background information’ means any information necessary for, or useful to, the implementation of the Programme, generated before or outside the framework of an action supported by the Programme and provided to and used for the purposes of that action;

(9) ‘foreground information’ means data, know-how or information generated in the implementation of the Programme, whatever its form or nature;

(10) ‘non-associated third-country entity’ means:

(a) a legal entity established in a non-associated third country; or

(b) a legal entity established in the Union or in an associated third country, which has its executive management structures located in a non-associated third country.

Article 3 Objectives

1. The general objective of the Programme is to support the capacity of ▌ SMEs, including innovative start-ups and scale-ups, to innovate rapidly to ensure the rapid delivery of emerging and disruptive defence products, with a focus on cost-efficiency, in order to address the most recent and fast evolving challenges faced by Member States’ and associated third countries’ armed forces, in particular those stemming from Russia’s war of aggression against Ukraine ▌ . The Programme shall thereby foster the competitiveness of the European Defence Technological and Industrial Base (EDTIB) and contribute to strengthening the Union’s defence industrial readiness, while reducing strategic dependencies on non-associated third countries across the full spectrum of defence technologies.

(aa)(b) to supportincrease the scalinguptake upby ofMember start-upsStates and scale-upsassociated developingthird countries, as well as by defence industrial prime contractors, system integrators and first-tier subcontractors, of emerging and disruptive defence products and▌ technologiesdeveloped forby defenceSMEs, acrossincluding through dedicated matchmaking, thereby supporting the Unionscaling-up andof theirsuch integrationSMEs withacross theEurope, supplypromoting chainstheir ofintegration theinto EDTIB,cross-border therebydefence supply chains, enhancing the resilience and security of supply for such products, contributing to the development of defence productsinnovation capacity across the Union and technologiesultimately acrossreinforcing the Union.technological edge of Member States.

(ab) to facilitate the matchmaking between non-defence and New Defence SMEs and established undertakings of defence supply chains, such as European defence industrial prime contractors, including in regions with less developed defence innovation ecosystems, thereby creating new cross-border supply chains and supporting a more balanced development of defence innovation capacities across the Union.

Article 4 Budget

(b) to significantly increase the uptake by Member States' and associated countries’ armed forces ▌of emerging and disruptive products and technologies for defence developed by SMEs, including innovative start-ups and scaleups, ▌thereby reinforcing the technological edge of Member States’ armed forces▌.

1.2. TheResources Programmeallocated shallto beMember implementedStates inunder synergyshared withmanagement othermay, Unionat programmes.the Anrequest actionof thatthe hasMember receivedState aconcerned, Unionbe contributiontransferred fromto anotherthe programmeProgramme maysubject alsoto receivethe aconditions contributionset underout thein Programmethe providedrelevant thatprovisions thoseof contributionsRegulation do(EU) not2021/1060 coverof the same costs.European TheParliament rulesand of the relevantCouncil. UnionThe programmeCommission shall applyimplement tothose theresources correspondingdirectly contribution,in oraccordance awith singleArticle set62(1), offirst rulessubparagraph, ofpoint any(a), of theRegulation contributing(EU, UnionEuratom) programmes2024/2509 mayor beindirectly appliedin toaccordance allwith contributions,Article and62(1), afirst singlesubparagraph, legalpoint commitment(c), mayof that Regulation. Those resources shall be concluded.used Iffor the Unionbenefit contributionof isthe basedMember onState eligibleconcerned. costs,Where the cumulativeCommission supporthas fromnot theentered Unioninto budgeta shalllegal notcommitment exceedunder direct or indirect management for additional amounts made available to the totalProgramme, eligiblethe costscorresponding uncommitted amounts may, at the request of the actionMember andState mayconcerned, be calculatedtransferred onback ato pro-ratathe basissource programmes ▌ in accordance with the documentsconditions settingset out thein conditionsRegulation for(EU) support.2021/1060.

2. Award procedures under the Programme may be jointly conducted under direct or indirect management with Member States, Union institutions, bodies and agencies, third countries, international organisations, international financial institutions, or other third parties, provided the financial interests of the Union are protected. Those procedures shall be subject to a single set of rules and lead to the conclusion of a single legal commitment. For that purpose, the partners to the joint award procedure may make resources available to the Programme in accordance with Article 5 of this Regulation. The partners may also be entrusted with the implementation of the award procedure, where applicable in accordance with Article 62(1), point (c), of Regulation (EU, Euratom) 2024/2509. For the purposes of Article 153(3) of Regulation (EU, Euratom) 2024/2509, for joint award procedures the evaluation committee may be partially composed of members that are representatives of the partners in that procedure.

Article 6 Alternative, combined and cumulative funding

1. The Programme may be opened to the participation of the following third countries through full or partial association to the Programme, in accordance with the objectives laid down in Article 3 and in accordance with the relevant international agreements or any decisions adopted under those agreements and applicable to:

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. If the Union contribution is based on eligible costs, 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.

(a) members of the European Free Trade Association, who are members of the European Economic Area;

2. Award procedures under the Programme may be jointly conducted under direct or indirect management with Member States, Union institutions, bodies and agencies, third countries, international organisations, international financial institutions ▌ or other third parties, provided that the financial interests of the Union are protected. Those procedures shall be subject to a single set of rules and lead to the conclusion of a single legal commitment. For that purpose, the partners in the joint award procedure may make resources available to the Programme in accordance with Article 5 of this Regulation. The partners may also be entrusted with the implementation of the award procedure, where applicable, in accordance with Article 62(1), point (c), of Regulation (EU, Euratom) 2024/2509. For the purposes of Article 153(3) of that Regulation, for joint award procedures the evaluation committee may be partially composed of members that are representatives of the partners in those procedures.

Article 7 Third countries associated with the Programme

1. The Programme or specific actions referred to in Article 10 may be opened to the participation of the following third countries through full or partial association with the Programme, in accordance with the objectives laid down in Article 3 and the applicable international agreements or any decisions adopted under those agreements ▌ :

(a) members of the European Free Trade Association that are members of the European Economic Area;

3. For the purposes of paragraph 2, point (d), the associated third country shall grant the necessary rights and access required under Regulations (EU, Euratom) 2024/2509 and (EU, Euratom) No 883/2013, ▌guarantee that enforcement decisions imposing a pecuniary obligation on the basis of Article 299 TFEU, and judgements and orders of the Court of Justice of the European Union, are enforceable and ensure that its competent authorities cooperate with the European Public Prosecutor’s Office (EPPO) in the investigations and prosecutions of criminal offences affecting the Union’s financial interests in accordance with applicable international agreements or other applicable rules.

3. For the purposes of paragraph 2, point (d), the associated third country shall:

1. The Programme shall be implemented in accordance with Regulation (EU, Euratom) 2024/2509 under direct management or under indirect management with entities referred to in Article 62(1), point (c), of that Regulation.

(a) grant the necessary rights and access required under Regulations (EU, Euratom) 2024/2509 and (EU, Euratom) No 883/2013; ▌

(b) guarantee that enforcement decisions imposing a pecuniary obligation on the basis of Article 299 of the Treaty on the Functioning of the European Union (TFEU) and judgments and orders of the Court of Justice of the European Union are enforceable; and

(c) ensure that its competent authorities cooperate with the European Public Prosecutor’s Office (EPPO) in the investigations and prosecutions of criminal offences affecting the Union’s financial interests in accordance with the applicable international agreements or other applicable rules.

Article 8 Implementation and forms of Union funding

1. The Programme shall be implemented in accordance with Regulation (EU, Euratom) 2024/2509 ▌ under direct management or under indirect management with entities referred to in Article 62(1), point (c), of that Regulation.

5. In accordance with Article 153(3) of Regulation (EU, Euratom) 2024/2509, the evaluation committee may be composedassisted partiallyby orexternal fullyexperts holding a valid personnel security clearance, if required by the work programme. By way of derogation from Article 242 of that Regulation, the list of independent externalexperts experts.shall not be made public.

5. Recipients shall not be subject to control by a non-associated third country or by a non-associated third-country entity.

(a) be established in the Union or in an associated third country; and

6. The infrastructure, facilities, assets and resources of the recipients of Union funding which are used for the purposes of the funded action shall be located on the territory of a Member State or of an associated third country for the entire duration of the action.

(b) have their executive management structures located in the Union or in an associated third country.

7. 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 third 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 third countries, provided that this 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 3. The costs related to activities using such infrastructure, facilities, assets or resources shall not be eligible for support from the Programme.

5. The recipients shall not be subject to control by a non-associated third country or by a non-associated third-country entity.

8. Legal entities may be deemed to fulfil the eligibility conditions referred to in this paragraph where they have fulfilled equivalent conditions under Regulations (EU) 2018/1092, (EU) 2021/697, (EU) 2023/1525, (EU) 2023/2418 or (EU) 2025/2643 of the European Parliament and of the Council or under Regulation (EU) 2025/1106 and provided that no subsequent changes call into question the fulfilment of those conditions.

6. The infrastructure, facilities, assets and resources of the recipients used for the purposes of the action supported by the Programme shall be located on the territory of a Member State or of an associated third country for the entire duration of the action.

9. ▌The following actions shall not be eligible for funding:

7. Where the recipients involved in the action supported by the Programme have no readily available alternatives or relevant infrastructure, facilities, assets and resources in the Union or in an associated third country, they may use their infrastructure, facilities, assets or resources located or held outside the territory of the Member States or of the associated third countries, provided that this 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 3. The costs related to activities using such infrastructure, facilities, assets or resources shall not be eligible for support from the Programme.

(a) actions or parts of actions, that are already fully financed from other public or private sources. ▌

8. Legal entities may be considered to have fulfilled the eligibility criteria referred to in this Article where they have fulfilled equivalent conditions under Regulation (EU) 2018/1092, (EU) 2021/697 ▌ , (EU) 2023/1525 ▌, (EU) 2023/2418 or (EU) 2025/2643 of the European Parliament and of the Council, or under Council Regulation (EU) 2025/1106, provided that no subsequent changes call into question the fulfilment of those conditions.

(b) actions for the development of products and technologies the use, development or production of which is prohibited by applicable international law.

9. ▌The following actions shall not be eligible for Union funding:

(ba) actions without appropriate cybersecurity and cyber resilience safeguards, including secure-by-design approaches, supply chain security measures, vulnerability management procedures and resilience testing, where relevant to the supported technology or product.

(a) actions or parts of actions that are already fully financed from other public or private sources ▌ ;

1. Actions eligible for funding under the Programme shall implement the objectives set out in Article 3 ▌and may take one or more of the following forms: ▌

(b) actions for the development of products and technologies the use, development or production of which is prohibited by applicable international law;

(a) support for the fast development of emerging and disruptive products and technologies for defence, including where it is based on integration and adaptation of civilian technologies with dual use potential for defence purposes;

(c) actions for the development of lethal autonomous weapons without the possibility for meaningful human control over selection and engagement decisions when carrying out strikes against humans, without prejudice to the possibility of providing Union funding for actions for the development of early warning systems and countermeasures for defensive purposes;

(aa) support for the fast development of components necessary for the production of emerging and disruptive products and technologies for defence in the context of localization of supply chains in the Union and associated countries;

(d) actions related to cluster munitions.

(b) support for the market uptake of emerging and disruptive products and technologies for defence, including through dedicated and iterative field testing and demonstrations and including through support to aggregation of demand;

Article 10 Eligible actions

(ba) support cooperation between SMEs, including innovative start-ups and scale-ups, and European defence industrial prime contractors, system integrators and first-tier subcontractors, with a view to facilitating integration into defence supply chains and operational deployment;

1. Actions eligible for funding under the Programme shall implement the objectives set out in Article 3 ▌ and may take one or more of the following forms ▌ :

(c) support for the relocation of the establishment of an entity or of its executive management structure into the Union or to an associated third country for the effective implementation of actions referred to in points (a), (aa) and (b), where an entity was previously established or its executive management structure was located in a non-associated third country;

(a) support for the rapid development of emerging and disruptive defence products and, where relevant, components necessary for their production, including where those products are based on the integration and adaptation of civilian technologies with dual-use potential for defence purposes;

(d) supporting action necessary for the effective implementation of actions referred to in points (a), (aa) and (b), including but not limited to qualification, certification, access to infrastructure, access to innovative manufacturing capacities and processes, skills development, testing and post-testing matchmaking, investment-readiness support and integration support between beneficiaries and Member States’ armed forces or between beneficiaries and other European defence industrial actors such as prime contractors, system integrators and first-tier subcontractors, procurement of studies and ecosystem building and strengthening activities.

(b) support for the market uptake of emerging and disruptive defence products ▌ , including through support for the aggregation of demand and dedicated and iterative field testing and demonstrations with the involvement and feedback of end users, in particular through matchmaking;

2. The Programme may provide support for actions covering the swift upgrade of existing products and technologies provided that the use of pre-existing information, intellectual property, or other rights necessary to carry out the action are not subject to a restriction by a non-associated third country or a non-associated third-country entity directly, or indirectly through one or more intermediary legal entities, which would prevent the effective implementation of the action.

(c) support for the relocation of the establishment of an entity or of its executive management structure to the Union or to an associated third country for the effective implementation of actions referred to in points (a) and (b), where an entity was previously established or its executive management structure was located in a non-associated third country;

3. Recipients of the Programme shall benefit, where possible and appropriate, from fast-track access to Union and associated countries’ testing and experimentation facilities and to the EUDIS Business Accelerator, and products supported by AGILE shall be included by the Commission in the Military Sales Catalogue established under Regulation (EU) 2025/2643 [EDIP].

(d) support necessary for the effective implementation of actions referred to in points (a) and (b), including, but not limited to:

3a. The Commission shall prioritise the mapping of supply chains linked to emerging and disruptive products and technologies for defence in the context of Article 56 of Regulation (EU) 2025/2643 [EDIP].

(i) qualification;

1. Where relevant and appropriate depending on the nature of the award procedure, and in accordance with Regulation (EU, Euratom) 2024/2509, the award criteria shall be set out in the work programmes referred to in Article 16 and shall take into account the following principles:

(ii) certification;

(a) disruptiveness potential, including the potential to bring about a radical change through a new technology or technological solution or through the novel integration, adaptation or more effective, faster or more cost-efficient use of existing technologies, products, processes or operational concepts;

(iii) access to infrastructure;

(b) the quality of the proposal and the ability to implement the action;

(iv) access to innovative manufacturing capacities and processes;

(c) the impact in the defence domain, considering the needs of Member States and associated third countries, including with regard to cost-efficiency, speed of delivery, and readiness for operational use.

(v) investment readiness support;

1a. In addition to the principles listed in paragraph 1, the work programmes referred to in Article 16 may also take into account:

(vi) skills development;

(a) the increase in security of supply for supply chains of emerging and disruptive products and technologies for defence;

(vii) procurement of studies; and

(b) the potential for market uptake and integration within industrial value chains and the existence of credible procurement pathways.

(viii) ecosystem-building and strengthening activities, including support for cooperation between SMEs and European defence industrial prime contractors, system integrators and first-tier subcontractors.

2. The work programme referred to in Article 16 shall lay down additional details concerning the application of the award criteria referred to in paragraph 1, taking into account the objectives of the call for proposals and the selection and evaluation procedures.

2. The Programme may provide support for actions covering the swift upgrade of existing products and technologies, provided that the use of pre-existing information, intellectual property rights or other rights necessary for carrying out the action is not subject, directly ▌ or indirectly through one or more intermediate legal entities, to a restriction by a non-associated third country or by a non-associated third-country entity, where that restriction would prevent the effective implementation of the action.

1. In order to ensure that actions listed in Article 10 can be effectively implemented without undue delay, the work programme may identify award procedures, under direct or indirect management, that are subject to an accelerated and simplified award procedure.

3. The recipients shall benefit, where possible and appropriate, from fast-track access to Union testing and experimentation facilities and to the EU Defence Innovation Scheme (EUDIS) Business Accelerator.

2. By way of derogation from Articles 199, 201 and 203 of Regulation (EU, Euratom) 2024/2509 regarding grants, and Article 170(1), points (b) and (c), and Article 170(2) of that Regulation regarding procurement, the work programme may provide that, for award procedures identified therein, the following conditions ▌apply:

4. Actions supported by the Programme shall not contravene the security and defence interests of the Union and its Member States, as established in the framework of the common foreign and security policy (CFSP) pursuant to Title V of the Treaty on European Union, including respect for the principle of good neighbourly relations.

(a) Limitation of the requirements for the award decision and signature of legal commitments to a preliminary evaluation of award and exclusion criteria; the award decision may be taken based solely on a self-declaration of applicants and tenderers on selection and eligibility criteria, especially regarding control, without request for corresponding supporting documents during the preliminary evaluation. The Commission shall finalise the final evaluation without undue delay.

Article 11 Award criteria

(b) Notification of the results of the preliminary evaluation to the applicants and tenderers shall be completed within a period specified in the work programme; the award decision shall be taken within a period specified in the work programme.

1. Where relevant and appropriate, depending on the nature of the award procedure, and in accordance with Regulation (EU, Euratom) 2024/2509, the award criteria shall be set out in the work programme referred to in Article 16 of this Regulation and shall take into account the following elements:

3. Where the final evaluation referred to in paragraph 2 point (a) concludes that the recipient does not meet all the eligibility and selection criteria, the legal commitment shall be terminated.

(a) the potential for disruption in the defence domain, assessed in light of the extent to which a proposed solution departs from current technological baselines;

(b) the quality of the proposal and the ability of the applicant to implement the action referred to in Article 10;

(c) the impact in the defence domain, considering the needs of Member States and associated third countries, in particular with regard to cost-efficiency, speed of delivery and readiness for operational use, including, where relevant, cybersecurity resilience.

2. In addition to the elements referred to in paragraph 1 of this Article, the work programme referred to in Article 16 may also take into account the increase in security of supply for supply chains of emerging and disruptive defence products and technologies.

3. The work programme referred to in Article 16 shall lay down additional details concerning the application of the award criteria referred to in paragraph 1 of this Article, taking into account the objectives of the call for proposals and the selection and evaluation procedures.

Article 12 Selection and award procedure

1. In order to ensure that actions referred to in Article 10 can be effectively implemented without undue delay, the work programme may identify award procedures, under direct or indirect management, that are subject to an accelerated and simplified procedure.

2. By way of derogation from Articles 199, 201 and 203 of Regulation (EU, Euratom) 2024/2509 regarding grants and from Article 170(1), points (b) and (c), and Article 170(2) of that Regulation regarding procurement, the work programme may provide that, for award procedures identified therein, the following conditions ▌ apply:

(a) the requirements for the award decision and the signature of legal commitments shall be limited to a preliminary evaluation of the award and exclusion criteria;

(b) the award decision may be taken based solely on a self-declaration of the applicants and tenderers concerning the eligibility and selection criteria, especially regarding control, without requesting corresponding supporting documents during the preliminary evaluation;

(c) the Commission shall complete the final evaluation without undue delay;

(d) the results of the preliminary evaluation shall be notified to the applicants and tenderers within a period specified in the work programme; and

(e) the award decision shall be taken within a period specified in the work programme.

3. Where the final evaluation referred to in paragraph 2, point (c), concludes that the recipient does not meet all the eligibility and selection criteria, the legal commitment shall be terminated. Payments shall only be made once the final evaluation has been completed.

The award procedure shall otherwise proceed in accordance with the rules as set out in Regulation (EU, Euratom) 2024/2509 applicable to the respective instrument of budget implementation.

(iii) the evaluation committee shall determine the most appropriate instrument of budget implementation under direct or indirect management and propose the maximum amount and form of the Union contribution;

1. By way of derogation from Article 9 of this Regulation, the work programme may specify that an award procedure takes the form of an inducement intervention allowing for a temporary and conditional suspension of compliance with the eligibility criteria relating to the place of establishment of legal entities participating in the Programme or the location of their executive management.

(b) during the second stage, the applicants and tenderers whose projects or offers have been successfully evaluated shall be invited to adjust and complete their proposals or offers, within the available budget, in accordance with the conclusions of the evaluation committee.

1a. Award procedures designated as inducement interventions pursuant to paragraph 1 shall 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 of associated third countries, and shall be consistent with the objectives set out in Article 3. A waiver of the eligibility criteria pursuant to paragraph 1 shall not apply to legal entities that are established or whose executive management structures are located in third countries that contravene the security and defence interests of the Union and its Member States or of associated third countries.

5. For matters not covered by paragraph 4, the award procedure shall proceed in accordance with the rules ▌ set out in Regulation (EU, Euratom) 2024/2509 applicable to the respective instrument of budget implementation.

2. Compliance with the eligibility criteria that have been temporarily suspended in accordance with paragraph 1▌shall be complied with and evaluated within a timeframe specified in the legal commitment within the meaning of Article 2, point 39, of the Regulation (EU, Euratom) 2024/2509. The Union support shall be provided once all the eligibility criteria have been met.

6. The Commission shall award the funding under the Programme by means of implementing acts. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 17(4).

2a Applicants seeking to benefit from an inducement intervention shall provide, together with their application, a declaration confirming that neither the applicant nor any entity exercising control over the applicant, directly or indirectly, is established in or controlled by persons from a third country referred to in paragraph 1a of this Article. The Commission shall verify the accuracy of such declarations as part of the final evaluation referred to in Article 12(2), point (a). Where a declaration is found to be inaccurate, the legal commitment shall be terminated and any Union funding fully recovered.

Article 13 Inducement intervention

3. If the eligibility criteria suspended in accordance with paragraph 1 ▌are not complied with the timeframe specified in the legal commitment referred to in paragraph 2, the action shall be deemed ineligible and any Union funding shall be fully recovered.

1. By way of derogation from Article 9 ▌ , the work programme may provide that an award procedure takes the form of an inducement intervention under which the eligibility criteria relating to the place of establishment of legal entities participating in the Programme or the location of their executive management may be temporarily and conditionally suspended.

4. For the purpose of this article, no pre-financing shall be paid.

2. The eligibility criteria that have been suspended in accordance with paragraph 1 of this Article shall be complied with and compliance with those eligibility criteria shall be evaluated within the timeframe specified in the legal commitment within the meaning of Article 2, point 39, of Regulation (EU, Euratom) 2024/2509. Union funding shall be provided once all the eligibility criteria have been met.

4a. The total Union funding committed under award procedures designated as inducement interventions pursuant to paragraph 1 shall not exceed 20 % of the total financial envelope referred to in Article 4(1). The Commission shall report to the European Parliament and to the Council on the use of inducement interventions as part of its monitoring obligations under Article 21a of this Regulation.

3. If the eligibility criteria that have been suspended in accordance with paragraph 1 are not complied with within the ▌ timeframe specified in the legal commitment referred to in paragraph 2, the action supported by the Programme shall be considered ineligible and any Union funding shall be fully recovered.

4. Where an award procedure takes the form of an inducement intervention, no pre-financing shall be paid.

5. The work programme shall set out the specific budget allocated to award procedures taking the form of an inducement intervention pursuant to paragraph 1. That budget shall represent a limited share of the Programme budget, so as to preserve the targeted and exceptional nature of that support.

Article 14 Union funding rates

1. The results of actions supported by the Programme shall not be subject, directly or indirectly through one or more intermediate legal entities, to any control or restriction by non-associated third countries or by non-associated third-country entities, ▌including with regard to technology transfer.

Article 15 Ownership of results

2. This Regulation shall not affect the Member States’ discretion as regards their policy on the export of military technology and equipment.

1. The results of actions supported by the Programme shall not be subject, directly or indirectly through one or more intermediate legal entities, to any control or restriction by non-associated third countries or by non-associated third-country entities, ▌ including with regard to technology transfer.

3. Technology transfers shall be carried out in full compliance with the provisions set out in Directive 2009/43/EC of the European Parliament and of the Council and, where relevant, in Regulation (EU) 2021/821.▌

2. This Regulation shall not affect Member States’ discretion as regards their policies on the export of military technology and equipment.

4. Without prejudice to paragraph 2 of this article, any transfer of ownership or granting of exclusive licences to a non-associated third country or to a non-associated third-country entity for results generated through the Programme, which takes place within 3 years after the final payment of the action, shall be subject to prior notification and approval by the Commission or the relevant Member State or associated third country authorities under conditions ensuring the protection of the Union’s security and defence interests. Where such a transfer of ownership contravenes the security and defence interests of the EU and its Member States or the objectives set out in Article 3, the support provided from the Programme shall be reimbursed.

3. Technology transfers shall be carried out in full compliance with Directive 2009/43/EC ▌ and, where relevant, Regulation (EU) 2021/821 of the European Parliament and of the Council.

5. Where Union support is provided in the form of the public procurement of a study, results shall be owned by the EU and all Member States or associated third countries shall have the right, free of charge, to a non-exclusive licence for the use of the study upon written request.

4. Without prejudice to paragraph 2 ▌ , any transfer of ownership or grant of an exclusive licence to a non-associated third country or to a non-associated third-country entity for results generated through the Programme, which takes place within three years of the final payment under the action, shall be subject to prior notification to the Commission and approval by the relevant Member State or associated third country authorities under conditions ensuring the protection of the ▌ security and defence interests of the Union and its Member States. Where such a transfer of ownership or grant of an exclusive licence contravenes the security and defence interests of the Union and its Member States or the objectives set out in Article 3, the support provided under the Programme shall be reimbursed.

6. Where Union support is provided in the form of a grant, EU institutions, bodies, offices or agencies as well as granting authorities shall enjoy upon request royalty-free access rights to results, without impacting the ownership of results, including IPRs on background information, for the only purpose of developing, implementing and monitoring existing Union policies or programmes in the fields of its competence and the right to grant.

5. Where the Union procures a study, ▌ all Member States and associated third countries shall have the right, free of charge, to a non-exclusive licence for the use of the study upon written request.

1. The Programme shall be implemented by a work programme as referred to in Article 110(2) of Regulation (EU, Euratom) 2024/2509.

6. Where Union funding is provided in the form of a grant, Union institutions, bodies, offices or agencies, as well as granting authorities, shall enjoy, upon request, royalty-free access rights to results, without affecting the ownership of results or intellectual property rights in background information, for the sole purpose of developing, implementing and monitoring existing Union policies or programmes in the fields of their competence. Such access rights shall be limited to non-commercial and non-competitive use.

2. The work programme shall set out in detail the categories of actions and the topics to be supported by the Programme. Those categories shall be in line with the objectives set out in Article 3.

Article 16 Work programme

2a. The work programme and the challenges therein shall take into account, where relevant, the capability priorities identified in the context of the Common Security and Defence Policy, including the Capability Development Plan and the findings and collaborative opportunities identified through the Coordinated Annual Review on Defence, as well as the views and expertise provided by the European Defence Agency. The Commission shall also take into account, where relevant, lessons learned, project pipelines and results from relevant Union defence innovation initiatives, including EUDIS, in order to ensure complementarity, avoid duplication and facilitate follow-on support for promising technologies. The work programme shall prioritise challenges that respond to urgent and prioritised capability needs shared by several Member States, while preserving the ability of the Programme to support bottom-up emerging and disruptive innovation.

1. The Programme shall be implemented by means of a work programme as referred to in Article 110(2) of Regulation (EU, Euratom) 2024/2509.

3. With the exception of the award procedure defined in Article 12(4), the work programme shall, where appropriate, contain functional requirements ▌and ▌ specify the form of Union funding under Article 8, without restricting competition across calls for proposals.

2. The work programme shall set out in detail the categories of actions and topics to be supported by the Programme. Those categories shall be in line with the objectives set out in Article 3.

4. The Commission shall adopt the work programme by means of an implementing act. This implementing act shall be adopted in accordance with the advisory procedure referred to in Article 17(3).

3. Challenges in the work programme shall be prioritised based on urgent and prioritised capability needs shared by several Member States.

4. With the exception of the award procedure provided for in Article 12(4), the work programme shall, where appropriate, contain functional requirements and specify the form of Union funding under Article 8, without restricting competition across calls for proposals.

5. The Commission shall adopt the work programme by means of an implementing act. That implementing act shall be adopted in accordance with the examination procedure referred to in Article 17(4).

Article 17 Committee procedure

The procurement contract of a Member State concerning any defence product resulting from an action supported under the Programme shall be considered as a contract awarded in the framework of a cooperative programme based on research and development as referred to in Article 13 (c) of Directive 2009/81/EC [following the adoption of Omnibus directive 2025/0177 (COD)].

5. Where the committee delivers no opinion, the Commission shall not adopt the draft implementing act and Article 5(4), third subparagraph, of Regulation (EU) No 182/2011 shall apply.

1. By way of derogation from the eligibility conditions and product schedules laid down in Articles 13 and 14 of Regulation (EU) 2026/467, defence products resulting from actions supported under the AGILE programme shall be eligible for immediate support under the Ukraine Support Loan established by Regulation (EU) 2026/467.

Article 18 Relationship with Directive 2009/81/EC

2.A Forprocurement thecontract purposesawarded ofby thisa Article,Member State for a defence product shallresulting befrom consideredan toaction resultsupported fromby the AGILEProgramme, programmeor wherefrom ita project that has beenreceived developeda orSovereignty produced,Seal in wholeaccordance orwith Article 4(1) of Regulation (EU) 2024/795 and has subsequently received funding from a Member State in part,accordance withinwith theArticle framework6 of anthis actionRegulation, thatshall hasbe receivedconsidered financialto supportbe undera contract awarded in the AGILEframework of a cooperative programme based on research and hasdevelopment beenwithin certifiedthe asmeaning suchof byArticle the13, Commission.point (c), of Directive 2009/81/EC.

3. The derogation provided for in paragraph 1 shall apply only to the extent necessary to enable the support or financing referred to therein and shall not affect the application of any other conditions or obligations under Regulation (EU) 2026/467.

Article 19 Amendment to Regulation (EU) 2024/795

1. Within the scope of this Regulation:

In Article 4 of Regulation (EU) 2024/795, paragraph 1 is replaced by the following:

(a) Member States and associated third countries on whose territory recipients are established shall assess the sensitive nature of the background and foreground information handled during the implementation of the funded actions.

‘1. The Commission shall award a Sovereignty Seal to any project contributing to any of the STEP objectives, provided that the project has been assessed and complies with minimum quality requirements, in particular the eligibility, exclusion and award criteria, provided for in a call for proposals under Regulation (EU) 2021/522, (EU) 2021/694 , (EU) 2021/695, (EU) 2021/697 or (EU) …/…* of the European Parliament and of the Council, or under Commission Delegated Regulation (EU) 2019/856**.

(b) Where that information is subject to a national classification level, the Member States and associated third countries referred to in point (a) shall establish an adequate security framework in accordance with their national laws and regulations.

_______________

(c) Each Member State shall ensure a level of protection of EU classified information equivalent to that provided for in the security rules ▌set out in Council Decision 2013/488/EU;

* Regulation (EU) 2026/… of the European Parliament and of the Council of … 2026 on establishing the Programme for agile and rapid defence innovation (AGILE) and amending Regulations (EU) 2024/795 and (EU) 2026/467 (OJ L …, ELI: …).

(d) The Commission shall protect classified information received in relation to the Programme in accordance with the security rules set out in Commission Decision (EU, Euratom) 2015/444.

** Commission Delegated Regulation (EU) 2019/856 of 26 February 2019 supplementing Directive 2003/87/EC of the European Parliament and of the Council with regard to the operation of the Innovation Fund (OJ L 140, 28.5.2019, p. 6, ELI: http://data.europa.eu/eli/reg_del/2019/856/oj).’

2. The Commission shall make available an accredited secured exchange system in order to facilitate the exchange of classified and sensitive information between the Commission and the Member States and associated third countries and, where appropriate, with▌ applicants and ▌ recipients. That system shall take into account Member States’ national security regulations.

Article 20 Amendment to Regulation (EU) 2026/467

Audits on the use of the Union contribution carried out by persons or entities, including by persons or entities other than those mandated by the Union institutions, bodies, offices or agencies, shall form the basis of the overall assurance pursuant to Article 127 of Regulation (EU, Euratom) 2024/2509. The European Court of Auditors shall examine the accounts of all revenue and expenditure of the Union in accordance with Article 287 TFEU.

In Article 13(4) of Regulation (EU) 2026/467, point (f) is replaced by the following:

1. Recipients of Union funding shall acknowledge the origin of the funds and ensure the visibility of that funding, including when promoting the actions and their results, by providing coherent, effective and proportionate targeted information to multiple audiences, including the media and the public.

‘(f) manufacturers and subcontractors involved in the production of defence products may be considered to fulfil the eligibility conditions referred to in this paragraph where they have fulfilled equivalent conditions under Regulation (EU) 2018/1092*, (EU) 2021/697**, (EU) 2023/1525***, (EU) 2023/2418**** or (EU) …/…***** of the European Parliament and of the Council, or under Council Regulation (EU) 2025/1106 and provided that no subsequent changes call into question the fulfilment of those conditions;

2. The Commission shall implement information and communication actions relating to this Regulation, to actions taken under it, and to the results achieved.

_______________

3. Financial resources allocated to the Programme may contribute to the organisation of dissemination activities, match-making events and awareness-raising activities, including to open supply chains to foster the cross-border participation of SMEs. Such activities shall include measures aimed at ensuring broad awareness of the Programme and facilitating participation across the Union, in particular among SMEs, start-ups and non-traditional defence actors with limited prior participation in Union programmes, as well as measures increasing awareness of match-making opportunities between those and prime contractors.

* Regulation (EU) 2018/1092 of the European Parliament and of the Council of 18 July 2018 establishing the European Defence Industrial Development Programme aiming at supporting the competitiveness and innovation capacity of the Union’s defence industry (OJ L 200, 7.8.2018, p. 30, ELI: http://data.europa.eu/eli/reg/2018/1092/oj).

** Regulation (EU) 2021/697 of the European Parliament and of the Council of 29 April 2021 establishing the European Defence Fund and repealing Regulation (EU) 2018/1092 (OJ L 170, 12.5.2021, p. 149, ELI: http://data.europa.eu/eli/reg/2021/697/oj).

*** Regulation (EU) 2023/1525 of the European Parliament and of the Council of 20 July 2023 on supporting ammunition production (ASAP) (OJ L 185, 24.7.2023, p. 7, ELI: http://data.europa.eu/eli/reg/2023/1525/oj).

**** Regulation (EU) 2023/2418 of the European Parliament and of the Council of 18 October 2023 on establishing an instrument for the reinforcement of the European defence industry through common procurement (EDIRPA) (OJ L, 2023/2418, 26.10.2023, ELI: http://data.europa.eu/eli/reg/2023/2418/oj).

***** Regulation (EU) 2026/… of the European Parliament and of the Council of … 2026 on establishing the Programme for agile and rapid defence innovation (AGILE) and amending Regulations (EU) 2024/795 and (EU) 2026/467 (OJ L …, ELI: …).’

Article 21 Application of the rules on classified information

1. For the implementation of this Regulation:

(a) Member States and associated third countries on whose territory the recipients are established shall assess the sensitive nature of the background and foreground information handled during the implementation of the actions supported by the Programme;

(b) where that information is subject to a national classification level, the Member States and associated third countries referred to in point (a) shall establish an adequate security framework ▌ in accordance with their national laws and regulations;

(c) each Member State shall ensure a level of protection of EU classified information equivalent to that provided for in the security rules ▌ set out in Council Decision 2013/488/EU;

(d) the Commission shall protect classified information received in relation to the Programme in accordance with the security rules set out in Commission Decision (EU, Euratom) 2015/444.

2. The Commission shall make available an accredited secure exchange system in order to facilitate the exchange of classified and sensitive information between the Commission and the Member States and associated third countries and, where appropriate, with ▌ the applicants and ▌ recipients. That system shall take into account Member States’ national security regulations.

Article 22 Audits

Audits of the use of the Union contribution carried out by persons or entities, including persons or entities other than those mandated by the Union institutions, bodies, offices or agencies, shall form the basis of the overall assurance pursuant to Article 127 of Regulation (EU, Euratom) 2024/2509. The European Court of Auditors shall examine the accounts of all revenue and expenditure of the Union in accordance with Article 287 TFEU.

Article 23 Information, communication and publicity

1. The recipients shall acknowledge the origin of the Union funding and ensure the visibility of that funding, including when promoting the actions supported by the Programme and their results, by providing coherent, effective and proportionate targeted information to multiple audiences, including the media and the public.

2. The Commission shall implement information and communication actions relating to this Regulation, to actions supported by the Programme and to the results achieved.

3. Financial resources allocated to the Programme may contribute to the organisation of dissemination, matchmaking and awareness-raising activities, including for the purpose of opening supply chains to foster the cross-border participation of SMEs. Such activities shall include measures aimed at ensuring broad awareness of the Programme and facilitating participation across the Union, in particular among SMEs, start-ups and non-traditional defence actors with limited prior participation in Union programmes. Dissemination activities shall include measures to inform potential applicants of the possibility of including their products in the Military Sales Catalogue as established under Regulation (EU) 2025/2643.

Article 24 Monitoring, evaluation and review

2.3. By 1st of1 July 2028, the Commission shall publishdraw anup interima report onevaluating the implementationimpact and effectiveness of the Programme.actions supported by the Programme and shall submit it to the European Parliament and the Council. That report,report shall include:include information on:

(f) the degree to which funded actions reduced identifiable strategic dependencies;

(f) aggregated data on the uptake of Programme-funded products.

2a. A final report shall be published at the end of the implementation of all the actions carried out by the Programme. That report shall also assess the uptake of AGILE-funded solutions by Member States' armed forces. Member States shall provide the Commission with the necessary data for such assessment.

Article 25 Entry into force ▌

3. The Commission shall present the findings of the interim and final reports referred to in paragraphs 2 and 2a to the Parliament and the Council and make those reports publicly available.