### with a view to improve the management of the external borders , to contribute to preventing and combating irregular migration and to contribute to a high level of security within the area of freedom , security and justice of the union , including the maintenance of public security and public policy and safeguarding the security in the territories of the member states , interoperability between eu information systems , namely [ the entry / exit system ] , the visa information system , [ the european travel information and authorisation system ] , eurodac , the schengen information system , and the [ european criminal records information system for third - country nationals ] should be established in order for these eu information systems and their data to supplement each other . to achieve this , a european search portal , a shared biometric matching service , a common identity repository and a multiple - identity detector should be established as interoperability components . ### with a view to improve the management of the external borders , to facilitating regular border crossings , to contribute to preventing and combating irregular migration , and to assist in the prevention , detection and investigation of terrorist offences or other serious criminal offences , interoperability between eu information systems , namely [ the entry / exit system ] , the visa information system , [ the european travel information and authorisation system ] , eurodac , the schengen information system , and the [ european criminal records information system for third - country nationals ] should be established in so far as that is possible while respecting the fundamental rights of the individual , in particular , the right to protection of personal data . to achieve this , a european search portal , a shared biometric matching service and a multiple - identity detector should be established as interoperability components .


### the two - step data consultation approach is particularly valuable in cases where the suspect , perpetrator or suspected victim of a terrorist offence or other serious criminal offence is unknown . in those cases the common identity repository should enable identifying the information system that knows the person in one single search . by creating the obligation to use this new law enforcement access approach in these cases , access to the personal data stored in the ees , the vis , [ the etias ] and eurodac should take place without the requirements of a prior search in national databases and the launch of a prior search in the automated fingerprint identification system of other member states under decision 2008 / 615 / jha . the principle of prior search effectively limits the possibility of member state’ authorities to consult systems for justified law enforcement purposes and could thereby result in missed opportunities to uncover necessary information . the requirements of a prior search in national databases and the launch of a prior search in the automated fingerprint identification system of other member states under decision 2008 / 615 / jha should only cease to apply once the alternative safeguard of the two - step approach to law enforcement access through the cir has become operational . ### the two - step data consultation approach is particularly valuable in cases where the suspect , perpetrator or suspected victim of a terrorist offence or other serious criminal offence is unknown . in those cases , using the european search portal or the shared biometric matching service should enable the relevant authority to identify the information system that knows the suspect , perpetrator or suspected victim in one single search , following the necessary checks in national databases and once a query of the automated fingerprint identification system of other member states under decision 2008 / 615 / jha has been launched . by creating the obligation to use this new law enforcement access approach in these cases , access to the personal data stored in the ees , the vis , [ the etias ] and eurodac should take place without the requirements of a prior search in national databases and the launch of a prior search in the automated fingerprint identification system of other member states under decision 2008 / 615 / jha . the principle of prior search in national databases and afis which were designed specifically for preventing , detecting and investigating terrorist offences or other serious criminal offences before searching in other eu information systems which do not have that as their primary purpose helps to ensure the necessity and proportionality for such a search .


### when querying the interpol databases , the design of the esp shall ensure that the data used by the user of the esp to launch a query is not shared with the owners of interpol data . ### when querying the interpol databases , the design of the esp shall ensure that the data used by the user of the esp to launch a query or any other data , is not shared with the owners of interpol data . as regards to data on individuals registered in eurodac , it must be ensured that the database owner does not receive information on whether their databases have been queried through the esp .


### the logs may be used only for data protection monitoring , including checking the admissibility of a query and the lawfulness of data processing , and for ensuring data security pursuant to article 42 . those logs shall be protected by appropriate measures against unauthorised access and erased one year after their creation , unless they are required for monitoring procedures that have already begun . the logs referred to in paragraph 1 shall be erased once the data is erased . ### the logs may be used only for data protection monitoring , including checking the admissibility of a query and the lawfulness of data processing , and for ensuring data security pursuant to article 42 . those logs shall be protected by appropriate measures against unauthorised access and erased two years after their creation , unless they are required for monitoring procedures that have already begun . the logs referred to in paragraph 1 shall be erased once the data is erased .


### the logs may be used only for data protection monitoring , including checking the admissibility of a request and the lawfulness of data processing , and for ensuring data security pursuant to article 42 . the logs shall be protected by appropriate measures against unauthorised access and erased one year after their creation , unless they are required for monitoring procedures that have already begun . the logs related to the history of the identity confirmation file shall be erased once the data in the identity confirmation file is erased . ### the logs may be used only for data protection monitoring , including checking the admissibility of a request and the lawfulness of data processing , for self - monitoring , and for ensuring the proper functioning and the data integrity and security pursuant to article 42 . the logs shall be protected by appropriate measures against unauthorised access and erased two years after their creation , unless they are required for monitoring procedures that have already begun . the logs related to the history of the identity confirmation file shall be erased once the data in the identity confirmation file is erased .


### the linked data shares the same biometric but different identity data and the authority responsible for the verification of different identities concluded it refers unlawfully to the same person ; ### the linked data shares the same biometric but different identity data and the authority responsible for the verification of different identities concluded it refers to the same person in an unjustified manner ;


### the european search portal should be established to facilitate technically the ability of member state authorities and eu bodies to have fast , seamless , efficient , systematic and controlled access to the eu information systems , the europol data and the interpol databases needed to perform their tasks , in accordance with their access rights , and to support the objectives of the ees , the vis , the [ etias ] , eurodac , the sis , the [ ecris - tcn system ] and the europol data . enabling the simultaneous querying of all relevant eu information systems in parallel , as well as of the europol data and the interpol databases , the esp should act as a single window or ‘ message broker’ to search various central systems and retrieve the necessary information seamlessly and in full respect of the access control and data protection requirements of the underlying systems . ### the european search portal should facilitate technically the ability of the authorised member state authorities and eu bodies to have a controlled yet fast , seamless and efficient access to the relevant eu databases to europol data and to interpol databases in so far as this is necessary for the performance of their tasks and in accordance with their access rights . in that way , the esp should support the objectives of the ees , the vis , the [ etias ] , eurodac , the sis , the [ ecris - tcn system ] and the europol data . enabling the simultaneous querying of all relevant eu databases in parallel , as well as of the europol data and the interpol databases , the esp should act as a single window or ‘ message broker’ to search various central systems and retrieve the necessary information seamlessly and in full respect of the access control and data protection requirements of the underlying systems .


### the commission shall lay down the procedures to determine the cases where identity data can be considered as identical or similar in implementing acts . those implementing acts shall be adopted in accordance with the examination procedure referred to in article 64 . ### the commission shall lay down the procedures to determine the cases where identity data can be considered as identical or similar in delegated acts . those delegated act shall be adopted in accordance with article 63 . such acts must be designed in a manner that ensures the protection of persons with multiple lawful identities against discrimination .


### where the query indicates that data on that person is stored in the cir , the member states authority shall have access to consult the data referred to in article 18 . ### where the query indicates that data on that person is stored in the eu information systems or the sis , the member states police authority shall have access to consult the following data : the data referred to in [ article 16 to and article 17 to of the ees regulation ] ; the data referred to in article 9 to , and of regulation no767 / 2008 ; and [ the data referred to in article 15 to of the etias regulation ] .


### without prejudice to the right of information referred to in articles 11 and 12 of regulation 45 / 2001 and articles 13 and 14 of regulation 2016 / 679 , persons whose data are stored in the shared biometric matching service , the common identity repository or the multiple - identity detector shall be informed by the authority collecting their data , at the time their data are collected , about the processing of personal data for the purposes of this regulation , including about identity and contact details of the respective data controllers , and about the procedures for exercising their rights of access , rectification and erasure , as well as about the contact details of the european data protection supervisor and of the national supervisory authority of the member state responsible for the collection of the data . ### without prejudice to the right to information referred to in articles 11 and 12 of regulation 45 / 2001 , articles 13 and 14 of regulation 2016 / 679 , and article 13 of directive 2016 / 680 , persons whose data are stored in one of the eu information systems , in the sis , or in the multiple - identity detector shall be informed by the authority collecting their data , at the time their data are collected , about the processing of personal data for the purposes of this regulation , including about identity and contact details of the respective data controllers , about the procedures for exercising their rights of access , rectification and erasure as laid down in article 47 , and about the contact details of the european data protection supervisor and of the national supervisory authority of the member state responsible for the collection of the data .


### where , following an examination , it is found that the data stored in the multiple - identity detector are factually inaccurate or have been recorded unlawfully , the member state responsible or , where applicable , the member state to which the request has been made shall correct or delete these data . ### where , following an examination , it is found that the data stored in the multiple - identity detector are factually inaccurate or have been recorded unlawfully , the member state responsible or , where applicable , the member state to which the request has been made shall correct or delete these data . the person concerned shall be informed that his or her data was corrected or deleted .


### member states wishing to avail themselves of the possibility provided for in this article shall adopt national legislative measures . such legislative measures shall specify the precise purposes of identity checks within the purposes referred to in article 2 and . they shall designate the police authorities competent and lay down the procedures , conditions and criteria of such checks . ### member states wishing to avail themselves of the possibility provided for in this article shall adopt national legislative measures . such legislative measures shall specify the precise purposes of identity checks within the purposes referred to in article 2 and lay down the procedures , conditions and criteria for such checks . they shall designate the competent police authorities . member states making use of this possibility shall transmit the text of their national legislative measures to the commission .


### processing of personal data for the purposes of this regulation shall not result in discrimination against persons on any grounds such as sex , racial or ethnic origin , religion or belief , disability , age or sexual orientation . it shall fully respect human dignity and integrity . particular attention shall be paid to children , the elderly and persons with a disability . ### processing of personal data for the purposes of this regulation shall not result in discrimination against persons on the grounds of sex , race , colour , ethnic or social origin , genetic features , language , religion or belief , political or any other opinion , membership of a national minority , property , birth , disability , age or sexual orientation . it shall fully respect human dignity and integrity and fundamental rights , including the right to respect for one’s private life and to the protection of personal data . particular attention shall be paid to children , the elderly and persons with a disability . the best interests of the child shall be a primary consideration .


### the eu bodies shall use the esp to search data related to persons or their travel documents in the central sis . ### where they are so required under union law , eu agencies shall use the esp to search data related to persons or their travel documents in the central sis .


### the possibility to achieve the objectives of the eu information systems is undermined by the current inability for the authorities using these systems to conduct sufficiently reliable verifications of the identities of the third - country nationals whose data are stored in different systems . that inability is determined by the fact that the set of identity data stored in a given individual system may be fraudulent , incorrect , or incomplete , and that there is currently no possibility to detect such fraudulent , incorrect or incomplete identity data by way of comparison with data stored in another system . to remedy this situation it is necessary to have a technical instrument at union level allowing accurate identification of third - country nationals for these purposes . ### to better realise the objectives of eu information systems , the authorities using those systems should be able to conduct sufficiently reliable verifications of the identities of the third - country nationals whose data are stored in different systems . the set of identity data stored in a given individual system may be incorrect , incomplete or fraudulent , and there is currently no way of detecting incorrect , incomplete or fraudulent identity data by way of comparison with data stored in another system . to remedy this situation it is necessary to have a technical instrument at union level allowing accurate identification of third - country nationals for these purposes .


### to improve the management of the external borders ; ### to enhance the effectiveness and efficiency of border checks at the external borders ;


### eu - lisa shall establish common data quality indicators and the minimum quality standards to store data in the ees , the [ etias ] , the vis , the sis , the shared bms , the cir and the mid . ### eu - lisa shall establish common data quality indicators and the minimum quality standards to store data in the ees , the [ etias ] , the vis , the sis and the mid .


### in both scenarios , and until the technical failure is addressed , the obligation referred to in article 7 and shall not apply and member states may access the information systems referred to in article 9 or the cir directly using their respective national uniform interfaces or national communication infrastructures . ### in both scenarios , and until the technical failure is addressed , the obligation referred to in article 7 and shall not apply and member states may access the information systems referred to in article 9 directly using their respective national uniform interfaces or national communication infrastructures .


### a european search portal is established for the purposes of ensuring that member state authorities and eu bodies have fast , seamless , efficient , systematic and controlled access to the eu information systems , the europol data and the interpol databases that they need to perform their tasks in accordance with their access rights and of supporting the objectives of the ees , the vis , [ the etias ] , eurodac , the sis , [ the ecris - tcn system ] and the europol data . ### a european search portal is established for the purposes of ensuring that member state authorities and eu bodies have fast , seamless , efficient and controlled access to the eu information systems , the europol data and the interpol databases that they need to perform their tasks in accordance with the objectives of those eu information systems and of the sis and with their access rights under the relevant legal basis .


### the query of the common identity repository by member state designated authorities and europol in order to obtain a hit - flag type of response indicating the data is recorded in the ees , the vis , [ the etias ] or eurodac requires automated processing of personal data . a hit - flag would not reveal personal data of the concerned individual other than an indication that some of his or her data are stored in one of the systems . no adverse decision for the concerned individual should be made by the authorised end - user solely on the basis of the simple occurrence of a hit - flag . access by the end - user of a hit - flag would therefore realise a very limited interference with the right to protection of personal data of the concerned individual , while it would be necessary to allow the designated authority and europol to address its request for access for personal data more effectively directly to the system that was flagged as containing it . ### the query of the eu information systems by member state designated authorities and europol in order to obtain a hit - flag type of response indicating the data is recorded in the ees , the vis , [ the etias ] or eurodac requires automated processing of personal data . a hit - flag should reveal only an indication that some of his or her data are stored in one of the systems , provided the authority making the search has access to that system . no adverse decision for the concerned individual should be made by the authorised end - user solely on the basis of the simple occurrence of a hit - flag , and the hit - flag should be used by the relevant authorities only for the purpose of deciding which database to query . access by the end - user of a hit - flag would therefore constitute an interference with the right to protection of personal data of the concerned individual and therefore should comply with the principles of necessity and proportionality .


### to ensure fast and systematic use of all eu information systems , the european search portal should be used to query the common identity repository , the ees , the vis , [ the etias ] , eurodac and [ the ecris - tcn system ] . however , the national connection to the different eu information systems should remain in order to provide a technical fall back . the esp should also be used by union bodies to query the central sis in accordance with their access rights and in order to perform their tasks . the esp should be an additional means to query the central sis , the europol data and the interpol systems , complementing the existing dedicated interfaces . ### to ensure fast and systematic use of all eu information systems , the european search portal should be used to query the ees , the vis , [ the etias ] , eurodac and [ the ecris - tcn system ] . however , the national connection to the different eu information systems should remain in order to provide a technical fall back . the esp should also be used by union bodies to query the central sis in accordance with their access rights and in order to perform their tasks . the esp should be an additional means to query the central sis , the europol data and the interpol systems , complementing the existing dedicated interfaces .


### the users of the esp shall launch a query by introducing data in the esp in accordance with their user profile and access rights . where a query has been launched , the esp shall query simultaneously , with the data introduced by the user of the esp , the ees , [ the etias ] , the vis , the sis , eurodac , [ the ecris - tcn system ] and the cir as well as the europol data and the interpol databases . ### the users of the esp shall launch a query by introducing data in the esp in accordance with their user profile and access rights . where a query has been launched , the esp shall query simultaneously , with the data introduced by the user of the esp , the ees , [ the etias ] , the vis , the sis , eurodac , [ the ecris - tcn system ] as well as the europol databases and the interpol databases .


### a central repository for reporting and statistics should be established to generate cross - system statistical data and analytical reporting for policy , operational and data quality purposes . eu - lisa should establish , implement and host the crrs in its technical sites containing anonymous statistical data from the above - mentioned systems , the common identity repository , the multiple - identity detector and the shared biometric matching service . the data contained in the crrs should not enable the identification of individuals . eu - lisa should render the data anonymous and should record such anonymous data in the crrs . the process for rendering the data anonymous should be automated and no direct access by eu - lisa staff should be granted to any personal data stored in the eu information systems or in the interoperability components . ### a central repository for reporting and statistics should be established to generate cross - system statistical data and analytical reporting for policy , operational and data quality purposes in line with the objectives of the underlying systems and inconformity with their respective legal bases . eu - lisa should establish , implement and host the crrs in its technical sites . the crrs should contain only anonymous statistical data from the relevant eu information systems the multiple - identity detector and the shared biometric matching service . the data contained in the crrs should not allow for the identification of individuals . eu - lisa should immediately render the data anonymous and should record only such anonymised data in the crrs . the process for rendering the data anonymous should be automated and no direct access by eu - lisa staff should be granted to any personal data stored in the eu information systems or in the interoperability components .


### eu - lisa shall render the data anonymous and shall record such anonymous data in the crrs . the process for rendering the data anonymous shall be automated . ### eu - lisa shall render the data anonymous , by ensuring that the data is non - identifiable , and shall record such anonymous data in the crrs . the process for rendering the data anonymous shall be automated .


### processing of personal data for the purposes of this regulation shall not result in discrimination against persons on any grounds such as sex , racial or ethnic origin , religion or belief , disability , age or sexual orientation . it shall fully respect human dignity and integrity . particular attention shall be paid to children , the elderly and persons with a disability . ### this regulation respects the fundamental rights and observes the principles recognized in particular by the charter of fundamental rights of the european union and shall be applied in accordance with those rights and principles . processing of personal data for the purposes of this regulation shall not result , either directly or indirectly , in undue interferences with the right to respect for private and family life , and the right to protection of personal data . processing of personal data for the purposes of this regulation shall not result in discrimination against persons on any grounds such as sex , racial , ethnic or social origin , colour , religion or belief , disability , age or sexual orientation . it shall fully respect human dignity and integrity . particular attention shall be paid to children , the elderly , persons with a disability and persons in need of international protection .


### this regulation should also introduces a new possibility for streamlined access to data beyond identity data present in the ees , the vis , [ the etias ] or eurodac by member state designated law enforcement authorities and europol . data , including data other than identity data contained in those systems , may be necessary for the prevention , detection , investigation and prosecution of terrorist offences or serious criminal offences in a specific case . ### this regulation should also introduces a new possibility for streamlined access to data beyond identity data present in the ees , the vis , [ the etias ] or eurodac by member state designated law enforcement authorities and europol . data , including data other than identity data contained in those systems , may be necessary for the prevention , detection , investigation and prosecution of terrorist offences or serious criminal offences in a specific case where there are reasonable grounds to consider that consultation will substantially contribute to the prevention , detection or investigation of the criminal offences in question ; in particular where there is a substantiated suspicion that the suspect , perpetrator or victim of a terrorist offence or other serious criminal offence falls under the category of third country nationals whose data are stored in the ees , the vis , the etias and the eurodac system . such streamlined access will be provided after a prior search in the national databases has been carried out and a query of the automated fingerprint identification system of the other member states under decision 2008 / 615 / jha has been launched .


### the linked data has similar identity data and the authority responsible for the verification of different identities concluded it refers unlawfully to the same person . ### the linked data has similar identity data and the authority responsible for the verification of different identities concluded it refers to the same person in an unjustified manner .


### to support and leverage the cooperation between undertakings , including small and medium - sized enterprises , in the development of technologies or products in line with defence capability priorities commonly agreed by member states within the union ; ### to support , leverage and level the cross - border cooperation between undertakings , including promoting the participation of small and medium - sized enterprises as well as mid - caps and research centres , in the value chains of defence technologies or products while avoiding the duplication of industrial skills and crowding - out effects for national defence investments ; where appropriate , and taking into account that unnecessary duplication should be avoided , regional or international cooperative initiatives , such as those in the nato context , which serve the union security and defence interests , shall also be taken into account ;


### to support greater efficiency and effectiveness of future union policy actions , the commission shall draw up a retrospective evaluation report and send it to the european parliament and to the council . the report - building on relevant consultations of member states and key stakeholders - shall notably assess the progress made towards the achievement of objectives set out in article 2 . it shall also analyse cross border participation of smes in projects implemented under the programme as well as the participation of smes to the global value chain . ### to support greater efficiency and effectiveness of future union policy actions , the commission and the high representative of the union for foreign affairs and security policy / vice - president of the commission shall draw up a retrospective evaluation report and send it to the european parliament and to the council . the report - building on relevant consultations of member states and key stakeholders - shall notably assess the progress made towards the achievement of objectives set out in article 2 . it shall also analyse cross border participation , including that of mid - caps , in projects implemented under the programme as well as the participation of mid - caps to the value chains of defence technologies or products . the report shall also include information on the origin of beneficiaries and , where possible , the distribution of the intellectual property rights that are generated .


### article 10 award criteria actions proposed for funding under the programme shall be evaluated on the basis of the following cumulative criteria : excellence contribution to the innovation and technological development of defence industries and thus to fostering the industrial autonomy of the union in the field of defence technologies ; and , contribution to the security and defence interests of the union by enhancing defence technologies which contribute to implement defence capability priorities commonly agreed by member states within the union ; and , viability notably via a demonstration by the beneficiaries that the remaining costs of the eligible action are covered by other means of financing such as member states’ contributions ; and for actions described in points to of article 6 , the contribution to the competitiveness of the european defence industry through the demonstration by the beneficiaries that member states have committed to jointly produce and procure the final product or technology in a coordinated way , including joint procurement where applicable . ### article 10 award criteria actions proposed for funding under the programme shall be evaluated in a transparent manner , based on objective and measurable parameters , taking into account the overall aim of the programme and in particular to support , leverage and level - up the cross - border cooperation between undertakings on the basis of the following criteria : contribution to the security and defence interests of the union by enhancing defence technologies which contribute to the implementation of defence capability priorities commonly agreed by member states within the union in the context of the capability development plan or the coordinated annual review on defence and , where appropriate , in the context of regional and international cooperative agreements ; and , contribution to excellence , industrial performance and competition by showing that the proposed work achieves measurable enhancements and significant advantages over existing products or technologies , or when the project aims at the development of a critical or a breakthrough technology ; and , viability , notably via a demonstration by the beneficiaries that the remaining costs of the eligible action are covered by other means of financing such as member states’ contributions and private sources of funding ; and , contribution to innovation in particular by showing that the proposed actions include ground - breaking or novel concepts and approaches , new promising future technological improvements or the application of technologies or concepts previously not applied in defence sector and thus to the technological development of defence industries and to fostering the industrial autonomy of the union in relation to the capability requirements under the common security and defence policy ; contribution to the unification of technical specifications ; the proportion of the overall budget for the action that is to be allocated in such a way as to enable participation by smes established in the european union that provide added value , whether as members of the consortium or as subcontractors , and in particular to smes that are not established in the member states in which the undertakings in the consortium are established ; contribution to greater efficiency and lower costs in the european defence industry by reducing duplication and overlaps ; increased or new cross - border cooperation ; for actions described in points to of article 6 , the contribution to a more efficient and further integrated european defence sector through the demonstration by the beneficiaries that member states have declared to jointly produce and procure or intend to jointly use , own or maintain the final product or technology in a coordinated way .


### as the objective of the programme is to support the competitiveness of the union defence industry by de - risking the development phase of cooperative projects , actions related to the development of a defence product or technology , namely definition of common technical specifications , design , prototyping , testing , qualification , certification as well feasibility studies and other supporting measures , should be eligible to benefit from it . this will also apply to the upgrade of existing defence products and technologies . ### as the objective of the programme is to support the integration of the union defence industry by bearing some of the risk at the development phase of cooperative projects , actions related to the development of a defence product or technology , namely definition of common technical specifications , design , prototyping , testing , qualification , certification , feasibility studies and other supporting measures as well as actions aimed at converting military production lines into civilian production lines , should be eligible to benefit from it . this will also apply to the upgrade of existing defence products and technologies .


### in the european defence action plan , adopted on 30 november 2016 , the commission committed to complement , leverage and consolidate collaborative efforts by member states in developing defence capabilities to respond to security challenges , as well as to foster a competitive and innovative european defence industry . it proposed in particular to launch a european defence fund to support investment in joint research and the joint development of defence equipment and technologies . the fund would support cooperation during the whole cycle of defence product and technology development . ### in the european defence action plan , adopted on 30 november 2016 , the commission described many structural problems in the european defence sector , which hamper the efficient use of national resources for providing the defence capabilities needed for an effective common security and defence policy . thus , the commission committed to complement , leverage and consolidate collaborative efforts by member states in developing and acquiring defence capabilities to respond to security challenges , to foster a competitive and innovative european defence industry as well as to contribute to the technological and industrial autonomy of the union . it proposed in particular to launch a european defence fund to support investment in joint research and the joint development of defence equipment and technologies . the fund should complement national defence budgets and provide an incentive for member states to invest more in defence . the fund would support cooperation during the whole cycle of defence product and technology development . to complement national programmes , it should enable the union to introduce a significant leverage effect for national investments to boost cooperation between member states and between their industries . to achieve these objectives it is therefore necessary , at the union level , to enhance the institutional framework for cooperation of member states and undertakings in the defence industrial development sector .


### as the union support aims at enhancing the competitiveness of the sector and concerns only the specific development phase , the commission should not have ownership or intellectual property rights over the products or technologies resulting from the funded actions . the applicable intellectual property rights regime will be defined contractually by the beneficiaries . ### as the union support aims at enhancing the competitiveness of the sector and concerns only the specific development phase , the union should not have ownership or intellectual property rights over the products or technologies resulting from the funded actions . the applicable intellectual property rights regime will be defined contractually by the beneficiaries . the results of actions which receive funding under the programme should not be subject to any control or restriction by a third country or a third country entity .


### the financial assistance of the union provided under the programme may not exceed 20% of the total cost of the action where it relates to prototyping . in all the other cases , the assistance may cover up to the total cost of the action . ### the financial assistance of the union provided under the programme may not exceed 30% of the eligible cost of the action where it relates to prototyping actions as defined in article 6 . in all the other cases , the assistance may cover up to the total cost of the action .


### the commission should draw up an implementation report at the end of the programme , examining the financial activities in terms of financial implementation results and where possible , impact . this report should also analyse the cross border participation of smes in projects under the programme as well as the participation of smes to the global value chain . ### the commission should draw up an interim progress report by the end of the first year of implementation and an implementation report at the end of the programme . these reports should analyse the development of industrial expertise and defence capacity , as well as coherence with the foreign policy objectives of the union and its member states and the financial activities in terms of financial implementation results and where possible , impact . they should also analyse and promote the cross - border participation of smes and mid - caps in projects under the programme as well as their participation to the global value chain . the reports should also include information on the origin of beneficiaries .


### the commission should draw up an implementation report at the end of the programme , examining the financial activities in terms of financial implementation results and where possible , impact . this report should also analyse the cross border participation of smes in projects under the programme as well as the participation of smes to the global value chain . ### the commission should draw up an implementation and evaluation report at the end of each year of the programme , examining and evaluating the financial activities in terms of financial implementation results , impact . this report should also analyse the cross - border participation of smes in projects under the programme as well as the participation of smes to the global value chain . if the participation of smes is considered to be low , the commission should examine the reasons for this situation and should propose , without delay , adequate new measures for allowing smes to increase their participation .


### when it relates to actions defined under point to of the first paragraph , the action must be based on common technical specifications . ### when it relates to actions defined under : point of the first paragraph , the action must be based on a common capability requirement ; point and points to of the first paragraph , the action must be based on common technical specifications , promoting interoperability .


### in the european defence action plan , adopted on 30 november 2016 , the commission committed to complement , leverage and consolidate collaborative efforts by member states in developing defence capabilities to respond to security challenges , as well as to foster a competitive and innovative european defence industry . it proposed in particular to launch a european defence fund to support investment in joint research and the joint development of defence equipment and technologies . the fund would support cooperation during the whole cycle of defence product and technology development . ### in the european defence action plan , adopted on 30 november 2016 , the commission committed to complement , leverage and consolidate collaborative efforts by member states in developing defence capabilities to respond to security challenges , as well as to foster a competitive and innovative european defence industry . it proposed in particular to launch a european defence fund to support investment in joint research and the joint development of defence equipment and technologies . the fund would support cooperation during the whole cycle of defence product and technology development as well as actions in the scope of conversion from military to civil production .


### beneficiaries shall be undertakings established in the union , in which member states and / or nationals of member states own more than 50% of the undertaking and effectively control it within the meaning of article 6 , whether directly or indirectly through one or more intermediate undertakings . in addition , all infrastructure , facilities , assets and resources used by the participants , including subcontractors and other third parties , in actions funded under the programme shall not be located on the territory of non - member states during the entire duration of the action . ### beneficiaries and their subcontractors shall be public or private undertakings established in the union . the infrastructure , facilities , assets and resources used by the beneficiaries , including subcontractors and other third parties , in actions funded under the programme shall not be located on the territory of non - member states during the entire duration of the action or the production . the use of those infrastructures , facilities , assets and resources shall not be subject to control or restrictions by third countries or third - country entities . the beneficiaries ' ultimate controlling company should be headquartered in the union .


### to better exploit economies of scale in the defence industry , the programme should support the cooperation between undertakings in the development of defence products and technologies . ### to better exploit economies of scale in the defence industry , the programme should support the cooperation between undertakings in the development of defence products and technologies , promoting a more integrated market , making investment profitable and avoiding duplication of capacities and spending . according to some studies , the union could save between 25 and 100 billion euros a year through an enhanced cooperation in defence .


### as the programme aims at enhancing the competitiveness of the union ' s defence industry , only entities established in the union and effectively controlled by member states or their nationals should be eligible for support . additionally , in order to ensure the protection of essential security interests of the union and its member states , the infrastructure , facilities , assets and resources used by the beneficiaries and subcontractors in actions funded under the programme , shall not be located on the territory of non - member states . ### as the programme aims at enhancing the competitiveness , the efficiency of the cooperation and the integration of the union ' s defence industry as well as at supporting the union’s strategic and technological defence autonomy , only entities established in the union and effectively controlled by member states or their nationals should be eligible for support , as direct beneficiaries or subcontractors . additionally , in order to ensure the protection of essential security interests of the union and its member states , the infrastructure , facilities , assets and resources used by the beneficiaries and subcontractors in actions funded under the programme , shall not be located on the territory of non - member states and shall not be subject to control or restriction by third - countries , undertakings or public entities in third countries . material , non - material and human resources should be free to use and free of restrictions vis - à - vis third countries . an undertaking controlled by third countries or by third country entities or subsidiaries of third country undertakings located in the union should be eligible if the union’s support fully respects the security and defence interests of the union and its member states and where the member states participating in the programme provide that undertaking with security clearances .


### as the programme aims at enhancing the competitiveness of the union ' s defence industry , only entities established in the union and effectively controlled by member states or their nationals should be eligible for support . additionally , in order to ensure the protection of essential security interests of the union and its member states , the infrastructure , facilities , assets and resources used by the beneficiaries and subcontractors in actions funded under the programme , shall not be located on the territory of non - member states . ### as the programme aims at enhancing the integration of the union ' s defence industry , only entities established in the union and effectively controlled by member states or their nationals should be eligible for support . additionally , in order to ensure the protection of essential security interests of the union and its member states , the infrastructure , facilities , assets and resources used by the beneficiaries and subcontractors in actions funded under the programme , shall not be located on the territory of non - member states .


### the commission should establish a multiannual work programme in line with the objectives of the programme . the commission should be assisted in the establishment of the work programme by a committee of member states . in light of the union policy on small and medium enterprises as key to ensuring economic growth , innovation , job creation , and social integration in the union and the fact that the supported actions will typically require trans - national collaboration , it is of importance that the work programme will reflect and enable such cross - border participation of smes and that therefore a proportion of the overall budget will benefit such action . ### the commission should establish a multiannual work programme in line with the objectives of the programme , especially that of competitiveness . the commission should be assisted in the establishment of the work programme by a committee of member states within the meaning of regulation 182 / 2011 . in light of the union policy on small and medium enterprises as key to ensuring economic growth , innovation , job creation , and social integration in the union and the fact that the supported actions will typically require trans - national collaboration , it is of importance that the work programme will reflect and emphasize the role of small and medium - sized enterprises as well as middle capitalisation companies and their cross - border participation and therefore set aside a share of at least 20% of the overall budget to benefit such action .


### the programme should be implemented in full compliance with regulation no 966 / 2012 of the european parliament and of the council6 . funding may take in particular the form of grants . financial instruments or public procurement may be used where appropriate . _________________ 6 regulation no 966 / 2012 of the european parliament and of the council of 25 october 2012 on the financial rules applicable to the general budget of the union and repealing council regulation no 1605 / 2002 . ### the programme should be implemented in full compliance with regulation no 966 / 2012 of the european parliament and of the council6 . funding may take in particular the form of grants and public procurement for the provision of studies . financial instruments could also be used in the future based on the experience of this programme , notably for the post 2020 european defence fund capability window . for the next mff , the commission should deploy financial resources for the next programme to follow . the commission should start the preparatory work , assessment and relevant proposals as soon as possible . _________________ 6 regulation no 966 / 2012 of the european parliament and of the council of 25 october 2012 on the financial rules applicable to the general budget of the union and repealing council regulation no 1605 / 2002 .


### in view of the specificities of the sector , in practice no collaborative project between undertakings will be launched if the member states have not first agreed to support such projects . after having defined common defence capability priorities at union - level and also taking into account where appropriate collaborative initiatives on a regional basis , member states identify and consolidate military requirements and define the technical specifications of the project . they may also appoint a project manager in charge of leading the work related to the development of a collaborative project . ### in view of the specificities of the sector , in practice no collaborative project between undertakings will be launched if the member states have not first agreed to support such projects . after having defined common defence capability priorities at union - level and also taking into account where appropriate collaborative initiatives on a regional basis , member states identify and consolidate defence - related requirements and define the technical specifications of the project . they may also appoint a project manager in charge of leading the work related to the development of a collaborative project .


### the action shall be undertaken in a cooperation of at least three undertakings which are established in at least two different member states . the undertakings which are beneficiaries shall not effectively be controlled , directly or indirectly , by the same entity or shall not control each other . ### the action shall be undertaken in a cooperation of at least three undertakings which are established in at least three different member states . the undertakings which are beneficiaries , and any of their subcontractors participating in the action , shall not effectively be controlled , directly or indirectly , by the same entity or shall not control each other .


### to foster the competitiveness and innovation capacity of the union defence industry by supporting actions in their development phase ; ### to foster the competitiveness and innovation capacity of the defence industry in the union and to acquire technological and industrial autonomy by supporting actions carried out on union territory in the development phase of defence technologies and products ;


### the proposals submitted following the call for proposals shall be evaluated by the commission assisted by independent experts on the basis of the award criteria of article 10 . ### the proposals submitted following the call for proposals shall be evaluated by the commission assisted by experts on the basis of the award criteria of article 10 . the experts should be members of a committee set up in accordance with regulation no 182 / 2011 .


### to support and leverage the cooperation between undertakings , including small and medium - sized enterprises , in the development of technologies or products in line with defence capability priorities commonly agreed by member states within the union ; ### to support , leverage and level the cross - border cooperation between undertakings , including promoting the participation of small and medium - sized enterprises as well as mid - caps and research centres , in the value chains of defence technologies or products while avoiding the duplication of industrial skills and crowding - out effects for national defence investments ; where appropriate , and taking into account that unnecessary duplication should be avoided , regional or international cooperative initiatives , such as those in the nato context , which serve the union security and defence interests , shall also be taken into account ;


### beneficiaries shall be undertakings established in the union , in which member states and / or nationals of member states own more than 50% of the undertaking and effectively control it within the meaning of article 6 , whether directly or indirectly through one or more intermediate undertakings . in addition , all infrastructure , facilities , assets and resources used by the participants , including subcontractors and other third parties , in actions funded under the programme shall not be located on the territory of non - member states during the entire duration of the action . ### beneficiaries shall be undertakings established in the union . beneficiaries owned by an entity outside europe , shall have a european management , and a license issued by the member state in which it is located .


### eligible actions developed in the context of permanent structured cooperation in the institutional framework of the union would ensure enhanced cooperation between undertakings in the different member states on a continuous basis and thus directly contribute to the aims of the programme . such projects should thus be eligible for an increased funding rate . ### eligible actions developed in the context of permanent structured cooperation in the institutional framework of the union would ensure enhanced cooperation between undertakings in the different member states on a continuous basis and thus directly contribute to the aims of the programme . such projects should thus be eligible for an increased funding rate . all projects will be used to evaluate the possibility of increasing the minimum number of member states in the context of any future programme .


### article 10 award criteria actions proposed for funding under the programme shall be evaluated on the basis of the following cumulative criteria : excellence contribution to the innovation and technological development of defence industries and thus to fostering the industrial autonomy of the union in the field of defence technologies ; and , contribution to the security and defence interests of the union by enhancing defence technologies which contribute to implement defence capability priorities commonly agreed by member states within the union ; and , viability notably via a demonstration by the beneficiaries that the remaining costs of the eligible action are covered by other means of financing such as member states’ contributions ; and for actions described in points to of article 6 , the contribution to the competitiveness of the european defence industry through the demonstration by the beneficiaries that member states have committed to jointly produce and procure the final product or technology in a coordinated way , including joint procurement where applicable . ### article 10 award criteria actions proposed for funding under the programme shall be evaluated in a transparent manner , based on objective and measurable parameters , taking into account the overall aim of the programme and in particular to support , leverage and level - up the cross - border cooperation between undertakings on the basis of the following criteria : contribution to the security and defence interests of the union by enhancing defence technologies which contribute to the implementation of defence capability priorities commonly agreed by member states within the union in the context of the capability development plan or the coordinated annual review on defence and , where appropriate , in the context of regional and international cooperative agreements ; and , contribution to excellence , industrial performance and competition by showing that the proposed work achieves measurable enhancements and significant advantages over existing products or technologies , or when the project aims at the development of a critical or a breakthrough technology ; and , viability , notably via a demonstration by the beneficiaries that the remaining costs of the eligible action are covered by other means of financing such as member states’ contributions and private sources of funding ; and , contribution to innovation in particular by showing that the proposed actions include ground - breaking or novel concepts and approaches , new promising future technological improvements or the application of technologies or concepts previously not applied in defence sector and thus to the technological development of defence industries and to fostering the industrial autonomy of the union in relation to the capability requirements under the common security and defence policy ; contribution to the unification of technical specifications ; the proportion of the overall budget for the action that is to be allocated in such a way as to enable participation by smes established in the european union that provide added value , whether as members of the consortium or as subcontractors , and in particular to smes that are not established in the member states in which the undertakings in the consortium are established ; contribution to greater efficiency and lower costs in the european defence industry by reducing duplication and overlaps ; increased or new cross - border cooperation ; for actions described in points to of article 6 , the contribution to a more efficient and further integrated european defence sector through the demonstration by the beneficiaries that member states have declared to jointly produce and procure or intend to jointly use , own or maintain the final product or technology in a coordinated way .


### the commission should draw up an implementation report at the end of the programme , examining the financial activities in terms of financial implementation results and where possible , impact . this report should also analyse the cross border participation of smes in projects under the programme as well as the participation of smes to the global value chain . ### the commission should draw up an implementation and evaluation report of the programme at the end of each financial year , examining the financial activities in terms of financial implementation results and where possible , impact . this report should also analyse the cross border participation of smes in projects under the programme as well as the participation of smes to the global value chain .


### the financial assistance of the union provided under the programme may not exceed 20% of the total cost of the action where it relates to prototyping . in all the other cases , the assistance may cover up to the total cost of the action . ### the financial assistance of the union provided under the programme may not exceed 30% of the eligible cost of the action where it relates to prototyping actions as defined in article 6 . in all the other cases , the assistance may cover up to the total cost of the action .


### as the objective of the programme is to support the competitiveness of the union defence industry by de - risking the development phase of cooperative projects , actions related to the development of a defence product or technology , namely definition of common technical specifications , design , prototyping , testing , qualification , certification as well feasibility studies and other supporting measures , should be eligible to benefit from it . this will also apply to the upgrade of existing defence products and technologies . ### as the objective of the programme is to support the competitiveness of the union defence industry by de - risking the development phase of cooperative projects , actions related to the development of a defence product or technology , namely definition of common technical specifications , design , prototyping , testing , qualification , certification , protection of intellectual property , as well feasibility studies and other supporting measures , should be eligible to benefit from it . this will also apply to the upgrade of existing defence products and technologies developed in the union by member states .


### where the union ' s financial assistance is provided through a grant , the members of any consortium wishing to participate in an action shall appoint one of them to act as coordinator , which shall be identified in the grant agreement . the coordinator shall be the principal point of contact between the members of the consortium in relations with the commission or the relevant funding body , unless specified otherwise in the grant agreement or in the event of non - compliance with its obligations under the grant agreement . ### where the union ' s financial assistance is provided through a grant , the members of any consortium wishing to participate in an action shall appoint one of them to act as coordinator , which shall be identified in the grant agreement . the coordinator shall be the principal point of contact between the members of the consortium in relations with the commission or the relevant funding body , unless specified otherwise in the grant agreement or in the event of non - compliance with its obligations under the grant agreement . the coordinator shall regularly report back to the union ' s institutions regarding the status of funded actions .


### to foster better exploitation of the results of defence research and contribute to closing the gaps between research and development . ### to foster better exploitation of the results of defence research thus contributing to closing the gaps between research and development by encouraging the production of researched products and technologies and thus to support the competitiveness of the european defence industry on the internal market and the global marketplace , including , where appropriate , by consolidation ;


### in the european defence action plan , adopted on 30 november 2016 , the commission committed to complement , leverage and consolidate collaborative efforts by member states in developing defence capabilities to respond to security challenges , as well as to foster a competitive and innovative european defence industry . it proposed in particular to launch a european defence fund to support investment in joint research and the joint development of defence equipment and technologies . the fund would support cooperation during the whole cycle of defence product and technology development . ### in the european defence action plan , adopted on 30 november 2016 , the commission committed to complement , leverage and consolidate collaborative efforts by member states in developing defence capabilities to respond to security challenges , as well as to foster a competitive , innovative and balanced european defence industry . it proposed in particular to launch a european defence fund to support investment in joint research and the joint development of defence equipment and technologies . the fund would support cooperation during the whole cycle of defence product and technology development .


### the financial assistance of the union under the programme should not exceed 20% of the total eligible cost of the action when it relates to prototyping which is often the most costly action in the development phase . the totality of the eligible costs should however be covered for other actions in the development phase . ### the financial assistance of the union under the programme should not exceed 20% of the total eligible cost of the action when it relates to prototyping which is often the most costly action in the development phase . up to 50% of the total costs could be covered for other actions in the development phase .


### when it relates to actions defined under point to of the first paragraph , the action must be based on common technical specifications . ### when it relates to actions defined under : point of the first paragraph , the action must be based on a common capability requirement ; point and points to of the first paragraph , the action must be based on common technical specifications , promoting interoperability .


### to support greater efficiency and effectiveness of future union policy actions , the commission shall draw up a retrospective evaluation report and send it to the european parliament and to the council . the report - building on relevant consultations of member states and key stakeholders - shall notably assess the progress made towards the achievement of objectives set out in article 2 . it shall also analyse cross border participation of smes in projects implemented under the programme as well as the participation of smes to the global value chain . ### to support greater efficiency and effectiveness of future union policy actions , the commission and the high representative of the union for foreign affairs and security policy / vice - president of the commission shall draw up a retrospective evaluation report and send it to the european parliament and to the council . the report - building on relevant consultations of member states and key stakeholders - shall notably assess the progress made towards the achievement of objectives set out in article 2 . it shall also analyse cross border participation , including that of mid - caps , in projects implemented under the programme as well as the participation of mid - caps to the value chains of defence technologies or products . the report shall also include information on the origin of beneficiaries and , where possible , the distribution of the intellectual property rights that are generated .


### as the objective of the programme is to support the competitiveness of the union defence industry by de - risking the development phase of cooperative projects , actions related to the development of a defence product or technology , namely definition of common technical specifications , design , prototyping , testing , qualification , certification as well feasibility studies and other supporting measures , should be eligible to benefit from it . this will also apply to the upgrade of existing defence products and technologies . ### as the objective of the programme is to support the integration of the union defence industry by bearing some of the risk at the development phase of cooperative projects , actions related to the development of a defence product or technology , namely definition of common technical specifications , design , prototyping , testing , qualification , certification , feasibility studies and other supporting measures as well as actions aimed at converting military production lines into civilian production lines , should be eligible to benefit from it . this will also apply to the upgrade of existing defence products and technologies .


### in the european defence action plan , adopted on 30 november 2016 , the commission committed to complement , leverage and consolidate collaborative efforts by member states in developing defence capabilities to respond to security challenges , as well as to foster a competitive and innovative european defence industry . it proposed in particular to launch a european defence fund to support investment in joint research and the joint development of defence equipment and technologies . the fund would support cooperation during the whole cycle of defence product and technology development . ### in the european defence action plan , adopted on 30 november 2016 , the commission described many structural problems in the european defence sector , which hamper the efficient use of national resources for providing the defence capabilities needed for an effective common security and defence policy . thus , the commission committed to complement , leverage and consolidate collaborative efforts by member states in developing and acquiring defence capabilities to respond to security challenges , to foster a competitive and innovative european defence industry as well as to contribute to the technological and industrial autonomy of the union . it proposed in particular to launch a european defence fund to support investment in joint research and the joint development of defence equipment and technologies . the fund should complement national defence budgets and provide an incentive for member states to invest more in defence . the fund would support cooperation during the whole cycle of defence product and technology development . to complement national programmes , it should enable the union to introduce a significant leverage effect for national investments to boost cooperation between member states and between their industries . to achieve these objectives it is therefore necessary , at the union level , to enhance the institutional framework for cooperation of member states and undertakings in the defence industrial development sector .


### the promotion of innovation and technological development in the union defence industry should take place in a manner coherent with the security interests of the union . accordingly , the action ' s contribution to those interests and to the defence capability priorities commonly agreed by member states should serve as an award criterion . within the union , common defence capability priorities are identified notably through the capability development plan . other union processes such as the coordinated annual review on defence and the permanent structured cooperation will support the implementation of relevant priorities through enhanced cooperation . where appropriate regional or international cooperative initiatives , such as in the nato context , and serving the union security and defence interest , may also be taken into account . ### the promotion of innovation and technological development in the defence industry in the member states should take place in a manner coherent with the security interests of the union as defined within the context of the common foreign and security policy and the common security and defence policy . it should also allow the maintenance and development of the skills and knowhow of the defence industry in the member states and contribute to strengthening the union ' s technological and industrial autonomy . accordingly , the action ' s contribution to those interests and to the defence capability priorities commonly agreed by member states should serve as an award criterion . within the union , common defence capability priorities are identified notably through the capability development plan . other union processes such as the coordinated annual review on defence and the permanent structured cooperation will support the implementation of relevant priorities through enhanced cooperation . member states ' pesco national implementation plans comprising of concrete actions should be coordinated with the programme . where appropriate regional or international cooperative capability initiatives , such as in the nato context , and serving the union security and defence interest , should also be taken into account and should not lead to duplicated efforts .


### the promotion of innovation and technological development in the union defence industry should take place in a manner coherent with the security interests of the union . accordingly , the action ' s contribution to those interests and to the defence capability priorities commonly agreed by member states should serve as an award criterion . within the union , common defence capability priorities are identified notably through the capability development plan . other union processes such as the coordinated annual review on defence and the permanent structured cooperation will support the implementation of relevant priorities through enhanced cooperation . where appropriate regional or international cooperative initiatives , such as in the nato context , and serving the union security and defence interest , may also be taken into account . ### the promotion of innovation and technological development in the union defence industry should allow for the maintenance and development of the skills and know - how of the union ' s defence industry and contribute to strengthening its technological and industrial independence . it should also take place in a manner coherent with the security interests of the union . the european council of 19 and 20 december 2013 stressed the importance of delivering key capabilities and addressing critical shortfalls through tangible projects in areas such as remotely - piloted aircraft , air - to - air refuelling , satellite telecommunications and cyberspace . in addition , in its communication of 30 november 2016 entitled ‘ european defence action plan’ , the commission emphasised the need to maximise civil / military synergies , including in areas such as space policy , cyber security , cyber defence and maritime security . accordingly , the action ' s contribution to those interests and to the defence capability priorities commonly agreed by member states should serve as an award criterion . within the union , common defence capability priorities are identified notably through the capability development plan . other union processes such as the coordinated annual review on defence and the permanent structured cooperation will support the implementation of relevant priorities through enhanced cooperation .


### to support and leverage the cooperation between undertakings , including small and medium - sized enterprises , in the development of technologies or products in line with defence capability priorities commonly agreed by member states within the union ; ### to support , leverage and level the cross - border cooperation between undertakings , including promoting the participation of small and medium - sized enterprises as well as mid - caps and research centres , in the value chains of defence technologies or products while avoiding the duplication of industrial skills and crowding - out effects for national defence investments ; where appropriate , and taking into account that unnecessary duplication should be avoided , regional or international cooperative initiatives , such as those in the nato context , which serve the union security and defence interests , shall also be taken into account ;


### the action shall be undertaken in a cooperation of at least three undertakings which are established in at least two different member states . the undertakings which are beneficiaries shall not effectively be controlled , directly or indirectly , by the same entity or shall not control each other . ### the action shall be undertaken in a cooperation of at least three undertakings which are established in at least three different member states and shall remain open to other undertakings based in other member states . none of those three undertakings which are beneficiaries shall effectively be controlled , directly or indirectly , by the same entity or shall control each other .


### the work programme shall ensure that a credible proportion of the overall budget will benefit actions enabling the cross - border participation of smes . ### the work programme , whose objective is to promote european cooperation , shall ensure that a relevant proportion of at least 20 % of the overall budget is earmarked for specific actions enabling the cross - border participation of smes and / or mid - caps ; a specific category of projects dedicated to smes and / or mid - caps shall be established by the work programme .


### the work programme shall set out in detail the categories of projects to be funded under the programme ; ### the work programme shall set out in detail the categories of projects to be funded under the programme , the type of financing and the allocated budget , including the maximum funding rates , the commitment of the member states for financing their implementation and the desired categories of eligible actions as defined in article 6 , including where appropriate the evaluation methodology including weightings and minimum thresholds for the fulfilment of the award criteria .


### to support greater efficiency and effectiveness of future union policy actions , the commission shall draw up a retrospective evaluation report and send it to the european parliament and to the council . the report - building on relevant consultations of member states and key stakeholders - shall notably assess the progress made towards the achievement of objectives set out in article 2 . it shall also analyse cross border participation of smes in projects implemented under the programme as well as the participation of smes to the global value chain . ### to support greater efficiency and effectiveness of future union policy actions , the commission shall draw up an evaluation report annually and send it to the european parliament and to the council . the report - building on relevant consultations of member states and key stakeholders - shall notably assess the progress made towards the achievement of objectives set out in article 2 .


### to foster the competitiveness and innovation capacity of the union defence industry by supporting actions in their development phase ; ### to foster the competitiveness and innovation capacity of the defence industry in the union and to acquire technological and industrial autonomy by supporting actions carried out on union territory in the development phase of defence technologies and products ;


### beneficiaries shall be undertakings established in the union , in which member states and / or nationals of member states own more than 50% of the undertaking and effectively control it within the meaning of article 6 , whether directly or indirectly through one or more intermediate undertakings . in addition , all infrastructure , facilities , assets and resources used by the participants , including subcontractors and other third parties , in actions funded under the programme shall not be located on the territory of non - member states during the entire duration of the action . ### beneficiaries and their subcontractors shall be public or private undertakings established in the union and their executive management structures shall be located in the union . all infrastructure , facilities , and assets used by the beneficiaries , including subcontractors and other third parties , for the purposes of the actions funded under the programme shall be located on the territory of the member states during the entire duration of the action . the beneficiaries and their subcontractors shall not be subject to control by third countries or by third country entities .


### an action developed by a beneficiary referred to in article 7 paragraph 2 may benefit from a funding rate increased by an additional 10 percentage points . ### an action developed by a beneficiary referred to in the context of the permanent structured cooperation pursuant to article 7 may benefit from a funding rate increased by an additional 10 percentage points .


### studies such as feasibility studies and other accompanying measures . ### the development of technologies or assets increasing efficiency across the life cycle of defence products and technologies .


### the commission shall not own the products or technologies resulting from the action nor shall it have any ipr claim pertaining to the action . ### the union shall not own the products or technologies resulting from the action nor shall it have any ipr claim pertaining to the action .


### the commission shall be assisted by a committee . that committee shall be a committee within the meaning of regulation no 182 / 2011 . the european defence agency shall be invited as observer . ### the commission shall be assisted by a committee . that committee shall be a committee within the meaning of regulation no 182 / 2011 and it shall be composed of representatives of the member states and chaired by a representative of the commission . the european defence agency shall be invited to contribute as observer . the european external action service , through its relevant structures , shall also assist the work of the committee .


### to support greater efficiency and effectiveness of future union policy actions , the commission shall draw up a retrospective evaluation report and send it to the european parliament and to the council . the report - building on relevant consultations of member states and key stakeholders - shall notably assess the progress made towards the achievement of objectives set out in article 2 . it shall also analyse cross border participation of smes in projects implemented under the programme as well as the participation of smes to the global value chain . ### the commission shall draw up an annual monitoring report examining the efficiency and effectiveness of the supported actions in terms of financial implementation , results , costs and , where possible , impact . to support greater efficiency and effectiveness of future union policy actions , the commission shall draw up an evaluation report annually and send it to the european parliament and to the council . the report - building on relevant consultations of member states and key stakeholders - shall notably assess the progress made towards the achievement of objectives set out in article 2 . it shall also analyse cross border participation of smes in projects implemented under the programme as well as the participation of smes to the global value chain .


### the commission shall not own the products or technologies resulting from the action nor shall it have any ipr claim pertaining to the action . ### the union institutions , bodies , offices or agencies enjoy , for the duly justified purpose of developing , implementing and monitoring union policies or programmes , access rights solely to the results of a beneficiary that has received union funding . such access rights are limited to non - commercial and non - competitive use . such access is to be granted on a royalty - free basis . with regard to results which are generated by beneficiaries that have received funding under the programme , the agreement between the commission and the beneficiary shall provide that the commission may object to transfers of ownership or to grants of a licence to third parties established in a third country not associated with the programme , if it considers that the grant or transfer is inconsistent with the ethical principles laid down in the eu common position on arms exports or security considerations . in such cases , the transfer of ownership or grant of licence can not take place unless the commission is satisfied that appropriate safeguards will be put in place . where appropriate , the agreement between the commission and the beneficiary will provide that the commission is to be notified at least six months prior to any such transfer of ownership or grant of a licence . non - compliance with these provisions will be subject to the measures stipulated in regulation no 966 / 2012 and regulation no 1268 / 2012 .


### to better exploit economies of scale in the defence industry , the programme should support the cooperation between undertakings in the development of defence products and technologies . ### the programme should not lead to an armament of the european union . to better exploit economies of scale in the defence industry , the programme should support the cooperation between undertakings in the development of defence products and technologies .


### given that the programme aims particularly at enhancing cooperation between undertakings across member states , an action should be eligible for funding under the programme only if it is undertaken by a cooperation of at least three undertakings based in at least two different member states . ### given that the programme aims particularly at enhancing cooperation between public or private undertakings across member states , an action should be eligible for funding under the programme only if it is undertaken by a cooperation of at least three undertakings based in at least three different member states .


### in the european defence action plan , adopted on 30 november 2016 , the commission committed to complement , leverage and consolidate collaborative efforts by member states in developing defence capabilities to respond to security challenges , as well as to foster a competitive and innovative european defence industry . it proposed in particular to launch a european defence fund to support investment in joint research and the joint development of defence equipment and technologies . the fund would support cooperation during the whole cycle of defence product and technology development . ### in the european defence action plan , adopted on 30 november 2016 , the commission described many structural problems in the european defence sector , which hamper the efficient use of national resources for providing the defence capabilities needed for an effective common security and defence policy . thus , the commission committed to complement , leverage and consolidate collaborative efforts by member states in developing and acquiring defence capabilities to respond to security challenges , to foster a competitive and innovative european defence industry as well as to contribute to the technological and industrial autonomy of the union . it proposed in particular to launch a european defence fund to support investment in joint research and the joint development of defence equipment and technologies . the fund should complement national defence budgets and provide an incentive for member states to invest more in defence . the fund would support cooperation during the whole cycle of defence product and technology development . to complement national programmes , it should enable the union to introduce a significant leverage effect for national investments to boost cooperation between member states and between their industries . to achieve these objectives it is therefore necessary , at the union level , to enhance the institutional framework for cooperation of member states and undertakings in the defence industrial development sector .


### in order to contribute to the enhancement of the competitiveness and innovation capacity of the union ' s defence industry , a european defence industrial development programme should be established . the programme should aim at enhancing the competitiveness of the union ' s defence industry inter alia cyber defence by supporting the cooperation between undertakings in the development phase of defence products and technologies . the development phase , which follows the research and technology phase , entails significant risks and costs that hamper the further exploitation of the results of research and adversely impact the competitiveness of the union ' s defence industry . by supporting the development phase , the programme would contribute to a better exploitation of the results of defence research and it would help to cover the gap between research and production as well as to promote all forms of innovation . the programme should complement activities carried out in accordance with article 182 tfeu and it does not cover the production of defence products and technologies . ### in order to contribute to the enhancement of the competitiveness and innovation capacity of the union ' s defence industry , a european defence industrial development programme should be established . the programme should aim at enhancing the competitiveness of the union ' s defence industry especially cyber defence by supporting the cooperation between undertakings in the development phase of defence products and technologies . the development phase , which follows the research and technology phase , entails significant risks and costs that hamper the further exploitation of the results of research and adversely impact the competitiveness of the union ' s defence industry . the programme should lead to efficiency gains enabling the reduction of the overall defence spending in the union while at the same time ensuring the defence capabilities necessary to perform the essential core tasks of collective defence , crisis management and cooperative security . by supporting the development phase , the programme would contribute to a better exploitation of the results of defence research and it would help to cover the gap between research and production as well as to promote all forms of innovation . the programme should complement activities carried out in accordance with article 182 tfeu and it does not cover the production of defence products and technologies .


### in view of the specificities of the sector , in practice no collaborative project between undertakings will be launched if the member states have not first agreed to support such projects . after having defined common defence capability priorities at union - level and also taking into account where appropriate collaborative initiatives on a regional basis , member states identify and consolidate military requirements and define the technical specifications of the project . they may also appoint a project manager in charge of leading the work related to the development of a collaborative project . ### after having defined common defence capability priorities at union level through the capability development plan , also taking into account the coordinated annual review on defence , and with a view to fulfilling the union ' s level of ambition as agreed by the council in its conclusions of 14 november 2016 and endorsed by the european council on 15 december 2016 , member states identify and consolidate military requirements and define the technical specifications of the project . they may also appoint a project manager in charge of leading the work related to the development of a collaborative project .


### the union financial support should not affect the export of products , equipment or technologies , and it should not affect the discretion of member states regarding policy on the export of defence related products . the union financial support should not affect member states ' export policies on defence related products . ### the union financial support should not affect the export of products , equipment or technologies , and it should not affect the discretion of member states regarding policy on the export of defence related products . the union financial support should not affect member states ' export policies on defence related products which are framed by decision 2008 / 944 / cfsp .


### the commission should establish a multiannual work programme in line with the objectives of the programme . the commission should be assisted in the establishment of the work programme by a committee of member states . in light of the union policy on small and medium enterprises as key to ensuring economic growth , innovation , job creation , and social integration in the union and the fact that the supported actions will typically require trans - national collaboration , it is of importance that the work programme will reflect and enable such cross - border participation of smes and that therefore a proportion of the overall budget will benefit such action . ### the commission should establish a multiannual work programme in line with the objectives of the programme , especially that of competitiveness . the commission should be assisted in the establishment of the work programme by a committee of member states within the meaning of regulation 182 / 2011 . in light of the union policy on small and medium enterprises as key to ensuring economic growth , innovation , job creation , and social integration in the union and the fact that the supported actions will typically require trans - national collaboration , it is of importance that the work programme will reflect and emphasize the role of small and medium - sized enterprises as well as middle capitalisation companies and their cross - border participation and therefore set aside a share of at least 20% of the overall budget to benefit such action .


### in order to contribute to the enhancement of the competitiveness and innovation capacity of the union ' s defence industry , a european defence industrial development programme should be established . the programme should aim at enhancing the competitiveness of the union ' s defence industry inter alia cyber defence by supporting the cooperation between undertakings in the development phase of defence products and technologies . the development phase , which follows the research and technology phase , entails significant risks and costs that hamper the further exploitation of the results of research and adversely impact the competitiveness of the union ' s defence industry . by supporting the development phase , the programme would contribute to a better exploitation of the results of defence research and it would help to cover the gap between research and production as well as to promote all forms of innovation . the programme should complement activities carried out in accordance with article 182 tfeu and it does not cover the production of defence products and technologies . ### in order to contribute to the enhancement of the competitiveness and innovation capacity of the union ' s defence industry with a view to the european union’s strategic and technological autonomy , a european defence industrial development programme should be established . the programme should aim at defining and implementing the progressive framing of a common defence policy in accordance with article 2 tfeu and is intended to develop the modern capabilities needed by the armed forces of the member states and to improve their security . this programme should aim at enhancing the competitiveness of the union ' s defence industry inter alia cyber defence by supporting the cooperation between undertakings , including research centres , in the development phase of defence products and technologies leading to greater efficiency and a reduction of resource wasting and overlaps in the defence market . the development phase , which follows the research and technology phase , entails significant risks and costs that hamper the further exploitation of the results of research and adversely impact the competitiveness of the union ' s defence industry . by supporting the development phase , the programme would contribute to a better exploitation of the results of defence research and it would help to cover the gap between research and production as well as to promote all forms of innovation . the programme , as well as its potential continuation after 2020 , regardless of its form , should complement activities carried out in accordance with article 182 tfeu and it does not cover the production of defence products and technologies .


### as the objective of the programme is to support the competitiveness of the union defence industry by de - risking the development phase of cooperative projects , actions related to the development of a defence product or technology , namely definition of common technical specifications , design , prototyping , testing , qualification , certification as well feasibility studies and other supporting measures , should be eligible to benefit from it . this will also apply to the upgrade of existing defence products and technologies . ### as the objective of the programme is to support the progressive framing of a common defence policy and the competitiveness of the union defence industry by de - risking the development phase of cooperative projects , actions related to the development of a defence product or technology , namely definition of common technical specifications , design , prototyping , testing , qualification , certification as well feasibility studies and other supporting measures , should be eligible to benefit from it . this will also apply to the upgrade of existing defence products and european defence technologies .


### the commission should establish a multiannual work programme in line with the objectives of the programme . the commission should be assisted in the establishment of the work programme by a committee of member states . in light of the union policy on small and medium enterprises as key to ensuring economic growth , innovation , job creation , and social integration in the union and the fact that the supported actions will typically require trans - national collaboration , it is of importance that the work programme will reflect and enable such cross - border participation of smes and that therefore a proportion of the overall budget will benefit such action . ### the commission should establish a multiannual work programme in line with the objectives of the programme . the commission should be assisted in the establishment of the work programme by a committee of member states . in light of the union policy on small and medium enterprises as key to ensuring economic growth , innovation , job creation , and social integration in the union , it is of importance that the work programme will reflect and enable participation of smes and that therefore a proportion of the overall budget will benefit such action .