Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulations (EC) No 1907/2006, (EC) No 1272/2008, (EU) No 528/2012, (EU) 2019/1021 and (EU) 2021/697 as regards defence readiness and facilitating defence investments and conditions for defence industry
Date: 2025-06-17
Institutions: Directorate-General for Defence Industry and Space, European Commission
Subjects: EU financing arrangements, European arms policy, European defence policy, arms industry, chemical product, chemicals legislation, defence expenditure, derogation from EU law, fund (EU), investment

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   EUROPEAN COMMISSION  Strasbourg, 17.6.2025  COM(2025) 822 final 2025/0176 (COD)  Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulations (EC) No 1907/2006, (EC) No 1272/2008, (EU) No 528/2012, (EU) 2019/1021 and (EU) 2021/697 as regards defence readiness and facilitating defence investments and conditions for defence industry  
 
EXPLANATORY MEMORANDUM 

1. 

• 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

The Russian invasion of Ukraine has underscored the urgent need to strengthen the capacity 
of  the  European  Defence  Technological  and  Industrial  Base  (EDTIB)  of  supporting  the 
defence  readiness  of  Member  States  in  the  face  of  emerging  security  threats.  The  ongoing 
conflict  has  exposed  vulnerabilities  in  the  European  defence  landscape,  highlighting  the 
importance  of  ramping-up  without  delay  the  EDTIB’s  production  capacities  and  of  tapping 
into its full innovation potential in particular by accelerating innovation cycles.  

As  stressed  in  the  Joint  White  Paper  for  European  Defence  Readiness  20301,  “rebuilding 
European defence requires, as a starting point, a massive investment over a sustained period. 
Together  we  must  accelerate  work  on  all  strands  to  urgently  ramp  up  European  defence 
readiness  to  ensure  that  Europe  has  a  strong  and  sufficient  European  defence  posture  by 
2030 at the latest”. 

Considering  the  above,  and  further  to  the  Council  call  on  the  European  Commission  to 
accelerate the work on all strands to decisively ramp up Europe’s defence readiness 2030, the 
present proposal aims to make the Union legislative framework conducive to the swift scaling 
up  of  defence  industrial  capacities  and  the  strengthening  of  innovation  in  order  to  reach 
defence readiness levels that can credibly deter and counter any risk of armed aggression. 

The  proposal  considers  the  significant  defence  investment  gaps  that  have  accumulated  over 
past decades, which require extraordinary efforts to restore defence readiness by 2030. It also 
considers  the  fact  that  the  current  regulatory  framework  is  not  adapted  to  this  need  and 
requires to be adapted to achieve the defence readiness 2030 objective. 

More specifically, the Commission’s current proposal involves extending existing provisions 
in  defence-specific  legislation  and  the  European  Defence  Fund,  as  well  as  in  non-defence-
specific  legislation,  to  remove  regulatory  barriers  and  facilitate  EU  defence  readiness  and 
industrial buildup. 

• 

Consistency with existing policy provisions in the policy area 

All  legislation  affected  by  this  proposal  contain  provisions  that  are  intended  to  reduce  the 
burden  for  Member  States  and  industry  or  provide  them  with  assistance  to  carry  out  the 
obligations  imposed  on  them  through  the  relevant  acts,  with  the  aim  of  making  such 
legislation  easier  to  apply  and  less  burdensome.  It  is  considered  necessary  to  extend  the 
provisions to the EU-wide defence market to support the defence readiness of Member States 
and foster the development of a competitive and innovative European defence industry.  

• 

Consistency with other Union policies 

The proposed measures to strengthen the European defence market are designed to build upon 
and  complement  existing  policy  provisions,  with  the  aim  of  enhancing  Europe's  defence 
capabilities and supporting the defence readiness of Member States.  

1 

Joint White Paper for European Defence Readiness 2030 : JOIN/2025/120 final, 19.03.2025. 

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Under the Regulatory Fitness and Performance Programme (REFIT), the Commission ensures 
that  its  legislation  is  fit  for  purpose,  targeted  to  the  needs  of  stakeholders,  and  minimises 
burdens  while  achieving  its  objectives.  This  proposal  is  therefore  part  of  the  REFIT 
programme, reducing unnecessary burdens for the defence sector, by aligning them with the 
rules currently applicable to the different procedures and schemes. 

The  current  proposal  focuses  on  the  defence  readiness  actual  situation  needs,  making  the 
achievement  of  the  objectives  of  legislation  more  efficient  and  less  burdensome  for 
enterprises and public authorities. 

2. 

• 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

The proposal amends existing EU Regulations. Therefore, the legal basis for the proposal is 
the  same  as  the  legal  basis  of  the  amended  regulations.  To  the  extent  that  this  Regulation 
amends  Regulation  (EC)  1907/2006,  Regulation  (EC)  1272/2008  and  Regulation  (EU)  No 
528/2012 the appropriate legal basis, in so far as those amendments are concerned, is Article 
114  TFEU.  To  the  extent  that  this  Regulation  amends  Regulation  (EU)  2019/1021  the 
appropriate legal basis, in so far as those amendments are concerned, is Article 192(1) TFEU. 
To  the  extent  that  this  Regulation  amends  Regulation  (EU)  2021/697  the  appropriate  legal 
basis, in so far as those amendments are concerned, is Article 173(3), Article 182(4), Article 
183 and the second paragraph of Article 188. 

• 

Subsidiarity (for non-exclusive competence)  

The obligations, exemptions or derogations that are imposed directly and indirectly by Union 
law  can  therefore  only  be  amended  at  Union  level.  Member  States,  industry  and  the 
Commission  will  be  benefiting  from  the  proposed  changes  with  the  objective  of  ensuring 
defence preparedness and simplification.  

• 

Proportionality 

The  extension  of  provisions  or  the  introduction  of  specific  exemptions  across  different  EU 
legislation  to  the  defence  area  simplifies  the  legal  framework  by  introducing  minimum 
changes  to  existing  obligations  to  clarify  and  specify  the  needs  for  defence  readiness  for 
Member States  and which should hereinafter confer upon the same treatment  as other areas 
targeted in those provisions, always with the appropriate safeguards. The proposal is therefore 
limited to those changes that are necessary to ensure defence readiness benefits from the same 
legal framework in the various EU areas. 

The measures do not go beyond what is necessary to achieve these goals. 

• 

Choice of the instrument 

These  pieces  of  legislation  contain  provisions  that  take  into  account  the  situation  and  the 
growing  needs  of  the  defence  sector  and  ensure  that  requirements  avoid  imposing  an 
unnecessary  burden  on  the  defence  readiness,  production  and  supply  chain  processes.  This 
proposal aims at ultimately making such legislation easier to apply and less burdensome. 

Therefore,  in  the  interest  of  efficiency,  a  joint  proposal  for  the  various  relevant  provisions 
applicable to defence in the form of the Defence Readiness Omnibus proposal appears to be 

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the  most  suitable  solution.  In  particular,  the  choice  of  a  Regulation  for  this  proposal  is 
justified by the need to use the same legal instrument as the legal acts that are to be amended. 

The  targeted  amendments  only  concern  applicable  elements  that  will  now  be  extended  to 
defence purposes and therefore are suitable to be included in a single proposal. 

3. 

• 

N/A  

• 

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EX-POST 

EVALUATIONS, 

OF 

STAKEHOLDER 

Ex-post evaluations/fitness checks of existing legislation 

Stakeholder consultations 

The stakeholder consultation process was comprehensive, including a public survey that was 
open  until  22  April  2025,  as  well  as  a  series  of  targeted  meetings  with  Member  States, 
relevant  business  representatives  from  the  Union,  and  other  key  stakeholders.  More 
specifically, further to open public consultation in April 2025 and the extensive consultations 
in  the  context  of  the  interim  evaluation  of  the  European  Defence  Fund2,  the  Commission 
services  collected  data,  evidence  and  suggestions  from  Member  States,  industry  and  other 
stakeholders  on  legal,  regulatory  and  administrative  obstacles  restricting  the  ability  of  the 
European defence industry to scale up production with enhanced agility and achieve defence 
readiness by 2030. The Defence Readiness Omnibus presents both immediate and corrective 
measures and long-term strategic solutions to address these impediments. 

Many  stakeholders,  Member  States  as  well  as  industrial  actors,  commented  on  chemical 
regulations,  in  particular  the  Regulation  on  Registration,  Evaluation,  Authorisation  and 
Restriction  of  Chemicals  (REACH)3.  Their  main  concern  was  that  defence  and  security 
considerations were not taken into account at early stages in the different processes, citing for 
example  the  ongoing  discussion  on  per-  and  polyfluoroalkyl  substances  (PFAS).  Several 
stakeholders also  saw  the possibility for Member States  to  allow for  national  exemptions  in 
the interest of defence (Article 2(3) of REACH) as being too narrow. In addition, it was also 
mentioned  that  the  defence  exemptions  were  worded  differently  in  different  acts  of 
legislation, which brought a lack of legal clarity. 

• 

Collection and use of expertise 

The proposed measures have been identified through an internal review of existing legislation 
and based on experience gained from the implementation of the related legislation. Since this 
is a step in the process of continuous assessment of the needs of defence readiness capabilities 
arising from Union legislation, the scrutiny of such burden and of its impact on stakeholders 
will continue. 

2 

3 

Regulation (EU) 2021/697 of the European Parliament and of the Council of 29 April 2021 establishing 
the  European Defence Fund and repealing Regulation (EU) 2018/1092: OJ L 170, 12.5.2021, p. 149-
177. 
Regulation (EC) No 1907/2006 of the European Parliament and of the Council of 18 December 2006 
concerning  the  Registration,  Evaluation,  Authorisation  and  Restriction  of  Chemicals  (REACH), 
establishing  a  European  Chemicals  Agency,  amending  Directive  1999/45/EC  and  repealing  Council 
Regulation  (EEC)  No  793/93  and  Commission  Regulation  (EC)  No  1488/94  as  well  as  Council 
Directive  76/769/EEC  and  Commission  Directives  91/155/EEC,  93/67/EEC,  93/105/EC  and 
2000/21/EC: OJ L 396, 30.12.2006. 

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• 

Impact assessment 

Due  to  the  nature  of  the  proposal,  which  is  designed  to  support  the  rapid  adaptation  of  the 
European  defence  industry  to  the  new  unstable  geopolitical  environment,  no  impact 
assessment could be carried out.  

In  addition,  the  European  Council  in  its  Conclusions  of  6  March  2025  called  on  the 
Commission  to  accelerate  the  “work  on  all  strands  to  decisively  ramp  up  Europe’s  defence 
readiness  within  the  next  five  years”.  Furthermore,  in  the  same  conclusions  the  European 
Council has expressly called on the Commission to rapidly follow up with simplification on 
security and defence. 

Hence, it was not possible to deliver an impact assessment in the timeframe available to table 
the Defence Simplification Readiness. Within 3 months after the adoption of this proposal the 
Commission  will  present  a  Staff  Working  to  justify  in  detail  this  legislative  EU  action  and 
explain its appropriateness to achieve the identified policy objectives in accordance with the 
relevant Better Regulation rules. 

The  proposal  concerns  targeted  changes  to  legislation.  They  are  based  on  experience  from 
implementing 
legislation.  The  changes  provide  for  a  more  efficient  and  effective 
implementation. Their targeted nature and the lack of relevant policy options make an impact 
assessment  not  necessary.  The  attached  Communication  looks  at  elements  on  the  impact  of 
such measures, including the results of an EU public survey undertaken in this context.   

• 

Regulatory fitness and simplification 

This  is  a  REFIT  proposal,  aiming  to  simplify  legislation  and  reduce  administrative  burdens 
for stakeholders. 

• 

N/A 

4. 

N/A  

5. 

• 

N/A 

• 

Fundamental rights 

BUDGETARY IMPLICATIONS 

OTHER ELEMENTS 

Implementation plans and monitoring, evaluation and reporting arrangements 

Detailed explanation of the specific provisions of the proposal 

Regarding Regulation (EU) No 1907/2006 (REACH): 

The Commission notes that the existing possibility for Member States to allow for exemptions 
in  specific  cases  for  certain  substances  where  necessary  in  the  interests  of  defence  (Article 
2.3) has been used in a restrictive way, that does not correspond to the needs of the defence 
industry to develop, produce and maintain defence material. The Commission concludes that 
this  is  due  to  the  exemption  being  limited  to  specific  cases,  as  well  as  to  a  restrictive 
interpretation  by  the  Member  States,  following  the  Code  of  Conduct  on  REACH  Defence 
exemptions agreed by the Member States within the context of the European Defence Agency 
(EDA).  

The Commission therefore proposes to amend Article 2(3) of the REACH Regulation so that 
it should not only be applicable to specific cases for certain substances.  

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Regarding  Regulation  (EU)  No  1272/2008  on  classification,  labelling  and  packaging  of 
chemical substances (CLP) 

To ensure a coherent exemption across chemicals legislations, the Commission proposes that 
the  same  exemption  for  defence  as  proposed  for  the  REACH  amendment  should  also  be 
introduced in Regulation (EU) No 1272/2008.  

Regarding Regulation (EU) No 528/2012 on Biocidal Products 

To  ensure  a  coherent  exemption  across  relevant  legislations,  the  Commission  proposes  that 
the similar wording as proposed for the REACH amendment should also be introduced in the 
Biocidal Products Regulation. 

Regarding Regulation (EU) No 2019/1021 on Persistent Organic Pollutants: 

Regulation  (EU)  2019/1021  implements    the  Stockholm    Convention  on  Persistent  Organic 
Pollutants  and  the  Protocol  to  the  1979  Convention  on  Long-Range  Transboundary  Air 
Pollution on Persistent Organic Pollutants. A party cannot grant  exemptions once a decision 
has  been  adopted  under  the  Convention  to  list  a  chemical  in  Annex  A,  B  or  C  to  the 
Convention beyond those granted under the Convention, unless the Party does not accept that 
listing;; thus, defence  readiness needs,  should be  addressed in the EU’s preparatory stages 
before  prohibitions or restrictions are established at the international level in the Convention; 
for this reason, it is important that relevant information is collected, assessed and submitted 
for  the  purpose  of  the  risk  management  evaluation  stage  within  the  process  of  listing  a 
substance within the Convention, as it is at that stage where the Persistent Organic Pollutants 
Review  Committee  may  consider  potential  exemptions  from  possible  control  measures  for 
that substance.    

It  cannot  be  excluded  that  information  on  the  use  of  chemical  substances  can  contain 
information that could be sensitive. The Commission therefore proposes that Member States 
may make exemptions from the reporting requirements embedded in art 13(1) of Regulation 
(EU) 2019/1021 on grounds of protection of national or EU security interests. 

Regarding Regulation (EU) 2021/697 establishing the European Defence Fund 

The proposed changes to Regulation (EU) 2021/697 aim to: 

– 

– 

– 

– 

– 

clarify  and  simplify  award  criteria,  introducing  the  possibility  of  selecting  only  the 
most  relevant  award  criteria,  and  implementing  the  EDF  through  annual  or  multi-
annual work programmes; 

clarify the rules applicable to direct awards; 

facilitate the use of indirect management; 

simplify  pre-commercial  procurement  and  access  rights  of  co-financing  Member 
States to the results of development projects; 

make  costs  for  testing  activities  conducted  outside  of  the  Union  territory  (e.g. 
Ukraine) eligible for funding. 

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2025/0176 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

amending Regulations (EC) No 1907/2006, (EC) No 1272/2008, (EU) No 528/2012, (EU) 
2019/1021 and (EU) 2021/697 as regards defence readiness and facilitating defence 
investments and conditions for defence industry 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article  114,  Article  173(3),  Article  182(4),  Article  183,  Article  188,  second  paragraph,  and 
Article 192(1) thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national parliaments, 

Acting in accordance with the ordinary legislative procedure, 

Whereas: 

(1) 

In  order  to  facilitate  investments  by  Member  States  in  defence,  it  is  necessary  to 
remove  regulatory  burdens  for  defence  readiness.  This  facilitation  will  support  the 
defence industry’s growth over time and contribute to support the defence readiness of 
Member States. 

(2)  While  several  instruments  of  Union  legislation  provide  the  necessary  flexibility  for 
Member States to take actions to facilitate the ramp-up of the defence industry, often 
national legislation and implementation hamper defence readiness. This is for example 
the  case  with  the  possibility  for  Member  States  to  use  exemptions  from  Regulation 
(EC) No 1907/2006 of the European Parliament and of the Council4 where necessary 
in the interest of defence, including for defence readiness.  

(3) 

4 

The legal framework established by Regulation (EC) No 1907/2006 should be adapted 
to the objective of defence readiness. Flexibility and agility are required to safeguard 
national and Union security interests, reflecting the worsened geopolitical situation. At 
the  same  time,  it  is  fundamental  to  maintain  a  high  level  of  protection  for  human 
health  and  the  environment.  There  are  indications  that  national  implementations  of 
Regulation (EC) No 1907/2006 in some Member States do not fully take into account 
the  flexibility  provided  by  that  Regulation.  The  current  defence  exemption  can  be 
improved  to  ensure  legal  certainty  and  allow  for  swifter  actions.  It  is  therefore 
appropriate  to  broaden  the  scope  of  existing  national  defence  exemptions  within 
Regulation  (EC)  No  1907/2006,  providing  Member  States  with  the  possibility  to 

Regulation (EC) No 1907/2006 of the European Parliament and of the Council of 18 December 2006 
concerning  the  Registration,  Evaluation,  Authorisation  and  Restriction  of  Chemicals  (REACH), 
establishing  a  European  Chemicals  Agency,  amending  Directive  1999/45/EC  and  repealing  Council 
Regulation  (EEC)  No  793/93  and  Commission  Regulation  (EC)  No  1488/94  as  well  as  Council 
Directive  76/769/EEC  and  Commission  Directives  91/155/EEC,  93/67/EEC,  93/105/EC  and 
2000/21/EC (OJ L 396, 30.12.2006, p. 1–849, ELI: http://data.europa.eu/eli/reg/2006/1907/oj). 

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authorise  broader  exemptions  as  necessary,  while  maintaining  the  fundamental 
responsibility  to  balance  defence  and  security  needs  with  health  and  environmental 
protection.  

Similar changes should be made to other legal acts related to chemicals providing for 
an  equivalent  national  exemption,  namely  Regulation  (EC)  No  1272/2008  of  the 
European  Parliament  and  of  the  Council5  and  Regulation  (EU)  No  528/2012  of  the 
European Parliament and of the Council6 to ensure a coherent regulatory environment 
for defence readiness.  
Regulation  (EU)  2019/1021  of  the  European  Parliament  and  of  the  Council7 
implements  the  Stockholm  Convention  on  Persistent  Organic  Pollutants  and  the 
Protocol  to  the  1979  Convention  on  Long-Range  Transboundary  Air  Pollution  on 
Persistent  Organic  Pollutants.  A  party  cannot  grant  exemptions  once  a  decision  has 
been  adopted  under  the  Convention  to  list  a  chemical  in  Annex  A,  B  or C  to  the 
Convention  beyond  those  granted  under  the  Convention,  unless  the  Party  does  not 
accept  that  listing;  thus,  defence  readiness  needs  should  be  addressed  in  preparatory 
stages  in  the  Union  before  prohibitions  or  restrictions  are  established  at  the 
international  level  in  the  Convention.  For  this  reason,  it  is  important  that  relevant 
information  is  collected,  assessed  and  submitted  for  the  purpose  of  the  risk 
management  evaluation  stage  within  the  process  of  listing  a  substance  within  the 
Convention,  as  it  is  at  that  stage  where  the  Persistent  Organic  Pollutants  Review 
Committee may consider potential exemptions from possible control measures for that 
substance.   

It  cannot  be  excluded  that  information  on  the  use  of  chemical  substances  contains 
sensitive information that needs to be protected. Member States should therefore, with 
due  regard  to  international  law,  be  allowed  to  make  exemptions  from  the  reporting 
requirements provided for in article 13(1) of Regulation (EU) 2019/1021 on grounds 
of  protection  of  national  or  Union  defence  and  security  interests,  for  the  purpose  of 
protecting sensitive information. 

The report on the interim evaluation of the European Defence Fund (EDF), established 
by  Regulation  (EU)  2021/697  of  the  European  Parliament  and  of  the  Council8,  has 
confirmed  its  overall  effectiveness  and  relevance,  while  highlighting  the  need  to 
further  streamline  procedures  and  reduce  administrative  burdens  where  possible  and 
introduce  clarification,  simplification  and  flexibility  in  that  Regulation  in  order  to 
facilitate the implementation of the EDF. Regulation (EU) 2021/697 should therefore 
be  amended,  taking  into  account  the  experience  gained  since  2021  and  the  feedback 

Regulation (EC) No 1272/2008 of the European Parliament and of the Council of 16 December 2008 on 
classification, labelling and packaging of substances and mixtures, amending and repealing Directives 
67/548/EEC and 1999/45/EC, and amending Regulation (EC) No 1907/2006 (OJ L 353, 31.12.2008, p. 
1, ELI: http://data.europa.eu/eli/reg/2008/1272/oj). 
Regulation  (EU)  No  528/2012  of  the  European  Parliament  and  of  the  Council  of  22  May  2012 
concerning the making available on the market and use of biocidal products (OJ L 167, 27.6.2012, p. 1, 
ELI: http://data.europa.eu/eli/reg/2012/528/oj). 
Regulation  (EU)  2019/1021  of  the  European  Parliament  and  of  the  Council  of  20  June  2019  on 
ELI: 
L 
persistent 
http://data.europa.eu/eli/reg/2019/1021/oj). 

25.6.2019, 

pollutants 

organic 

169, 

(OJ 

45 

p. 

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

(4) 

(5) 

(6) 

(7) 

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(8) 

(9) 

received during the consultations carried out in the context of the interim evaluation of 
the EDF. 

The  current  legal  framework  for  the  EDF  implementation  limits  the  use  of  indirect 
management to exceptional cases.  However, to facilitate faster and leaner innovation 
cycles, enabling the EDF to respond more effectively to emerging defence needs and 
technological advancements and for a more cost-efficient implementation of the EDF, 
a  more  flexible  use  of  indirect  management  may  be  necessary.  Therefore,  it  is 
necessary  to  introduce  the  possibility  to  use  indirect  management  in  a  more  flexible 
manner,  while  ensuring  that  the  principles  of  sound  financial  management, 
transparency  and  accountability  are  maintained,  and  that  the  use  of  indirect 
management is subject to rigorous monitoring and evaluation to guarantee the optimal 
use of Union funds. 

The  requirement  that  all  infrastructure,  facilities,  assets  and  resources  used  for  the 
implementation  of  EDF  funded  projects  be  located  within  the  Union  and  associated 
countries  territory  to  be  eligible  for  funding  limits  the  potential  for  the  European 
Defence  Technological  and  Industrial  Base  to  benefit  from  testing  opportunities  that 
offer  unique  advantages.  To  address  this  limitation,  it  is  necessary  to  allow  for  the 
costs of carrying out testing activities in third countries, such as Ukraine, to be eligible 
for  EDF  funding.  Testing  in  Ukraine  provides  possibilities  that  are  not  readily 
available  within  the  Union,  such  as  rapidly  available  results,  24-hour  testing  and 
testing  on  the  battlefield,  which  can  significantly  enhance  the  development  and 
validation  of  defence  technologies  and  products.  In  addition,  testing  in  Ukraine  can 
facilitate  the  incorporation  of  live  experience  on  modern  warfare  into  the  further 
development  of  defence  technologies  and  products,  thereby  ensuring  a  technical  and 
strategic advantage for the  European  Defence Technological  and  Industrial  Base. By 
allowing costs of testing activities carried outside the Union territory to be eligible for 
funding,  the  EDF  would  be  able  to  support  the  development  of  more  effective  and 
innovative  defence  solutions,  ultimately  contributing  to  the  enhancement  of  the 
Union's defence capabilities. 

(10)  The  interim  evaluation  of  the  EDF  has  shown  that  the  current  award  criteria  for  the 
evaluation of proposals  under that Fund  are overly complex, unclear, and difficult to 
apply  in  practice.  This  has  resulted  in  unnecessary  administrative  burdens  and 
uncertainties for the Commission and the applicants, ultimately hindering the efficient 
implementation of the EDF. It is necessary to simplify the award criteria and introduce 
more  flexibility  in  their  application  in  order  to  make  the  evaluation  more  efficient, 
transparent, and effective. The possibility to select a relevant subset of award criteria 
according  to  specific  objectives  of  the  calls  for  proposals  would  allow  for  a  tailored 
and focused evaluation thus for a better alignment with the priorities and objectives of 
the EDF.  

(11)  The implementation of the EDF has been hindered by the requirement to adopt annual 
work  programmes,  resulting  in  complex  procedures,  making  it  challenging  to  ensure 
predictability  and  continuity  of  the  actions  supported  by  the  EDF.  To  address  that 
issue  and  provide  more  flexibility  in  the  management  of  the  EDF,  it  is  necessary  to 
introduce the possibility to implement the  EDF through annual or multi-annual work 
programmes.  This  would  enable  the  Commission  to  better  plan  and  coordinate  the 
support for defence research and development activities, while also allowing for more 
efficient  use  of  resources  and  improved  synergies  between  different  projects  and 
initiatives.  By  allowing  multi-annual  work  programmes,  the  Fund  would  be  able  to 
better  support  long-term  research  and  development  projects,  foster  collaboration 

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(12) 

among  stakeholders,  and  ultimately  contribute  to  the  enhancement  of  the  Union's 
defence capabilities. 

In order to further improve the efficiency and effectiveness of the EDF, it is essential 
to provide the Commission with the necessary flexibility to manage the programme in 
a  way  that  optimises  the  use  of  resources  and  minimises  administrative  burdens.  To 
that  end,  the  conditions  under  which  the  Commission  may  have  recourse  to  direct 
awards should be clarified, allowing for a more streamlined and expedited procedure 
in certain circumstances. Continuity of efforts and efficient implementation of defence 
research  and  development  projects  should  be  facilitated,  while  respecting  the 
principles of transparency, fairness,  and equal  treatment.  The Commission  should be 
enabled to better respond to the evolving needs of the defence sector, the cooperation 
between  stakeholders  should  be  fostered  and  the  development  of  innovative  and 
effective defence solutions should be improved, thereby enhancing the security of the 
Union and defence capabilities of the Member States. 

(13)  The  EDF  has  the  potential  to  boost  the  development  of  innovative  defence 
technologies and solutions through pre-commercial procurement. However, the current 
legal  framework  is  overly  complex  and  lacks  clarity  on  the  conditions  for  pre-
commercial  procurement  under  the  EDF,  thus  hindering  its  effective  use.  The 
conditions for pre-commercial procurement need to be simplified and clarified, as the 
current provisions promote the award of multiple contracts within the same procedure 
(multiple sourcing), which is not always suitable for the defence sector. Removing this 
restriction will provide for a  clearer  and more effective  pre-commercial procurement 
framework,  enabling  the  EDF  to  better  support  the  development  of  innovative 
solutions,  bridge  the  gap  between  research  and  market  deployment,  and  provide  a 
strong incentive for Member States to invest in defence research and development. 

(14)  The current legal framework for the EDF has not provided sufficient access rights to 
the  results  of  development  projects  to  Member  States,  in  particular  for  those  co-
financing  such  projects.  To  ease  that  concern  and  promote  a  more  collaborative  and 
cooperative approach to defence research and development, it is necessary to grant to 
the co-financing Member States the right to access the results of development projects 
on fair terms. The conditions for the exercise of such access rights should be defined 
in  the contractual  relationship between the recipients  and the national  authorities  co-
financing  the action. This  will  simplify the negotiation  process between  the Member 
States  and  industry  and  reduce  time  to  grant,  thereby  promoting  more  streamlined 
collaboration in defence research and development. 

(15)  To  maximise  the  benefits  of  the  changes  to  Regulation  (EU)  2021/697,  the 
amendments  to  that  Regulation  should  apply  retroactively.  While  some  provisions, 
such as those relating to the award criteria cannot be applied retroactively due to their 
very  nature,  others,  such  as  those  relating  to  funding  rates  or  testing  outside  of  the 
territory of the Union, can improve the efficiency and efficacy of the projects funded 
under  the  EDF.  To  ensure  that  Union  funds  are  spent  in  the  most  effective  way 
possible, these provisions should be applicable as of 1 January 2025. 

(16)  Regulations  (EC)  No  1907/2006,  (EC)  No  1272/2008,  (EU)  No  528/2012,  (EU) 

2019/1021 and (EU) 2021/697 should therefore be amended accordingly, 

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HAVE ADOPTED THIS REGULATION: 

Article 1 
Amendments to Regulation (EC) No 1907/2006 

In Article 2 of Regulation (EC) No 1907/2006, paragraph 3 is replaced by the following: 

‘3.  Member  States  may  allow  for  exemptions  from  this  Regulation  for  substances,  on 
their own, in a mixture or in an article, where necessary in the interests of defence.’. 

Article 2 
Amendments to Regulation (EC) No 1272/2008 

In Article 1 of Regulation (EC) No 1272/2008, paragraph 4 is replaced by the following: 

‘4.  Member  States  may  allow  for  exemptions  from  this  Regulation  for  substances 
mixtures,  and  articles  referred  to  in  section  2.1  of  Annex  I,  where  necessary  in  the 
interests of defence.’; 

Article 3 
Amendments to Regulation (EU) No 528/2012 

In Article 2 of Regulation (EU) No 528/2012, paragraph 8 is replaced by the following: 

‘8. Member States may allow for exemptions from this Regulation for biocidal products, 
on their own or in a treated article, where necessary in the interests of defence.’; 

Article 4 
Amendments to Regulation (EU) No 2019/1021 

Regulation (EU) 2019/1021 is amended as follows: 

(1) 

in Article 2, the following point (14) is added: 

‘(14) ‘defence readiness’ means the state of preparedness  of a Member State  or several 
Member  States  to  respond  to  a  crisis  defined  in  Article  1,  point  (10),  of  Directive 
2009/81/EC of the European Parliament and of the Council*, which relates to defence’; 

_________ 

* Directive 2009/81/EC of the European Parliament and of the Council of 13 July 2009 on the coordination 
of  procedures  for  the  award  of  certain  works  contracts,  supply  contracts  and  service  contracts  by 
contracting  authorities  or  entities  in  the  fields  of  defence  and  security,  and  amending  Directives 
2004/17/EC and 2004/18/EC (OJ L 216, 20.8.2009, p. 76, ELI: http://data.europa.eu/eli/dir/2009/81/oj).’; 

(2) 

in Article 3, the following paragraph (4a) is inserted: 

‘4a.  When  collecting,  assessing  and  submitting  information  for  the  purpose  of  the  risk 
management evaluation referred to in Article 8(7)  and Article 8(8) of the Convention, the 
Commission  and  Member  States  shall  duly  take  into  account  defence  readiness  and 
specificities  of  the  defence  sector,  including  impacts  on  defence  production  supply 
chains; 

(3) 

in Article 13(1) the following second subparagraph is added: 

‘Where necessary, Member States may make exemptions from this article on grounds of 
protection  of  national  and  defence  interests,  for  the  purpose  of  protecting  sensitive 
information  provided  that  such  exemptions  do  not  undermine  the  Union  or  Member 

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States compliance, where relevant, with their reporting obligations under the Convention 
’. 

Article 5 
Amendments to Regulation (EU) 2021/697 

Regulation (EU) 2021/697 is amended as follows: 

(1) 

Article 2 is amended as follows: 

(a) 

the following point (6a) is inserted:  

‘(6a)  ‘cross-border  SMEs’  means  SMEs  which  are  established  in  Member 
States  or  associated  countries  other  than  those  where  the  legal  entities 
cooperating  within  a  consortium  which  are  not  SMEs  or  mid-caps  are 
established;’; 

(b) 

point (17) is replaced by the following: 

‘(17)  ‘pre-commercial  procurement’  means  the  procurement  of  research  and 
development  services  involving  risk-benefit  sharing  under  market  conditions 
where  there  is  a  clear  separation  of  the  research  and  development  services 
procured from the deployment of commercial volumes of end-products;’; 

(2) 

in Article 4 the following paragraph 6 is added: 

‘6.  The  budgetary  commitments  relating  to  the  Programme  and  which  cover 
activities  extending  over  more  than  one  financial  year  may  be  broken  down  over 
several years into annual instalments.’; 

(3) 

(4) 

in Article 8(2) the second sentence is deleted. 

in Article 9(2) the following second sub-paragraph is inserted: 

‘By way of derogation  from the first  subparagraph,  infrastructures, facilities, assets 
and resources used by recipients and subcontractors involved in the action for testing 
of a defence product, tangible or intangible component or technology, as referred to 
in Article 10(3), point (f) may be located or held outside the territory of the Member 
States  or  of  the  associated  countries,  as  established  by  the  work  programme.  This 
shall not contravene the security and defence interests of the Union and its Member 
States  and,  shall  be  consistent  with  the  objectives  set  out  in  Article  3  and  shall 
comply with Articles 20 and 23.’; 

(5) 

in Article 11(1) the second sub-paragraph is replaced by the following: 

‘In  certain  duly  substantiated  circumstances,  Union  funding  may  also  be  granted 
without  a  call  for  proposals  in  accordance  with  Article  198  of  Regulation  (EU, 
Euratom)  2024/2509  of  the  European  Parliament  and  of  the  Council*,  including  in 
cases provided for in the first subparagraph, point (e), of that Article.’; 

________ 

*  Regulation  (EU,  Euratom)  2024/2509  of  the  European  Parliament  and  of  the  Council  of  23 
September 2024 on the financial rules applicable to the general budget of the Union (OJ L, 2024/2509, 
26.9.2024, ELI: http://data.europa.eu/eli/reg/2024/2509/oj).’; 

(6) 

Article 12 is replaced by the following: 

‘Article 12 

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Award criteria 

1. 

In accordance with Article 203 of Regulation (EU, Euratom) 2024/2509, each proposal 
shall be  assessed on the basis of one or more of the following criteria as set out in the 
work programme: 

(a) 

(b) 

(c) 

(d) 

(e) 

(f) 

(g) 

(h) 

its contribution to excellence in the defence domain, in particular by showing 
that the expected results of the proposed action present significant  advantages 
over existing defence products or technologies; 

its  contribution  to  the  innovation  or  potential  of  disruption  of  the  European 
defence  industry,  in  particular  by  showing  that  the  proposed  action  includes 
ground-breaking  or  novel  concepts  and  approaches  previously  not  applied  in 
defence sector; 

its contribution to the competitiveness of the European Defence Technological 
and Industrial Base by creating new market opportunities across the Union and 
beyond and accelerating the growth of companies throughout the Union; 

its  contribution 
strengthening security of supply; 

to  reducing  dependency  on  non-Union  sources  and 

its  contribution  to  cross-border  cooperation  between  legal  entities  established 
in  Member  States  or  associated  countries,  in  particular  with  SMEs  and  mid-
caps 
the  action,  as  recipients, 
subcontractors  involved  in  the  action  or  as  other  legal  entities  in  the  supply 
chain; 

that  bring  substantial  added-value 

to 

its quality and efficiency of the implementation of the action; 

its  contribution  to  increasing  efficiency  across  the  life  cycle  of  defence 
products  and  technologies,  including  cost-effectiveness  and  the  potential  for 
synergies in the procurement, maintenance and disposal processes; 

its  contribution  to  the  further  integration  of  the  European  defence  industry 
throughout  the  Union,  in  particular  regarding  joint  use,  ownership  or 
maintenance of the final product or technology. 

2.  The work programme shall lay down details concerning the selection procedures, and the 
application of the award criteria listed in paragraph 1. This shall include any weighting 
of  the  criteria,  scoring  thresholds  and,  where  relevant,  rules  for  dealing  with  ex  aequo 
proposals, taking into consideration the objectives of the call for proposals.’; 

(7) 

Article 13 is amended as follows: 

(a) 

paragraph 2 is replaced by the following: 

‘2.  By  way  of  derogation  from  paragraph  1  of  this  Article,  support  from  the 
Fund  shall  not  exceed  20 %  of  the  eligible  costs  for  activities  referred  to  in 
Article  10(3),  point  (e),  without  prejudice  to  higher  funding  rates  which  may 
apply in accordance with paragraph 3 of this Article.’; 

(b) 

in paragraph 3, point (b) is replaced by the following: 

‘(b)  an  activity  may  benefit  from  an  increased  funding  rate,  as  referred  to  in 
this  point,  where  at  least  10 %  of  the  total  eligible  costs  of  the  activity  are 
allocated to SMEs established in Member States or in associated countries and 
which  participate  in  the  activity  as  recipients,  subcontractors  or  other  legal 
entities in the supply chain. 

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The  funding  rate  may  be  increased  by  percentage  points  equivalent  to  the 
percentage  of  the  total  eligible  costs  of  the  activity  allocated  to  SMEs 
established in Member States or in associated countries in which recipients that 
are not SMEs or mid-caps are established and which participate in the activity 
as recipients, subcontractors or other legal entities in the supply chain, up to an 
additional 5 percentage points. 

The funding rate may be increased by percentage points equivalent to twice the 
percentage  of  the  total  eligible  costs  of  the  activity  allocated  to  cross-border 
SMEs  as  defined  in  Article  2,  point  (6a),  which  participate  in  the  activity  as 
recipients, subcontractors or other legal entities in the supply chain;’; 

(8) 

in Article 14, paragraph 1 is replaced by the following: 

‘1.  Notwithstanding  Article  201  of  Regulation  (EU,  Euratom)  2024/2509,  only  the 
financial capacity of a coordinator shall be verified.’; 

(9) 

in Article 17(2), point (b) is replaced by the following: 

‘(b) may authorise, in specific cases, the award of multiple contracts within the same 
procedure (multiple sourcing)’; 

(10) 

(11) 

Article 22 is deleted; 

Article 23 is amended as follows:  

(a) 

paragraphs 3 and 4 are replaced by the following: 

‘3.  This  Regulation  shall  not  affect  the  Member  States’  discretion  as  regards 
their policy on the transfer and export of defence-related products. As regards 
transfers,  Member  States  shall  endeavour  to  use  general  transfer  licences  as 
referred to in Article 5 of Directive (EC) 2009/43 of the European Parliament 
and  of  the  Council*  and  avoid  disproportionate  administrative  pre-conditions 
to ensure the smooth implementation of the actions. 

4. With regard to results generated by recipients through development  actions 
supported by the Fund, and without prejudice to paragraph 3 of this Article, the 
Commission  shall  be  notified  prior  to  any  transfer  of  ownership  to  a  non-
associated third country or to a non-associated third-country entity, which takes 
place within 3 years after the final payment of the action. If such a transfer of 
ownership contravenes the security and defence interests of the Union and its 
Member States or the objectives set out in Article 3, the support provided from 
the Fund shall be reimbursed.’; 

_________________ 

*  Directive  2009/43/EC  of  the  European  Parliament  and  of  the  Council  of  6 
May  2009  simplifying  terms  and  conditions  of  transfers  of  defence-related 
the  Community  (OJ  L  146,  10.6.2009,  p.  1,  ELI: 
products  within 
http://data.europa.eu/eli/dir/2009/43/oj).’; 

(b) 

the following paragraph 6 is added: 

‘6. Access rights to the results of development actions shall be granted to the 
national  authorities  co-financing  the  action  under  fair  and  reasonable 
conditions to be agreed upon with the recipients generating those results. 

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Terms and conditions for the exercise of such access rights shall be defined in 
the contractual relationship between the recipients and the national authorities 
co-financing the action.’; 

(12) 

in Article 24, paragraph 1 is replaced by the following: 

‘1.  The  Fund  shall  be  implemented  by  means  of  annual  or  multiannual  work 
programmes  as  referred  to  in  Article  110(2)  of  the  Regulation  (EU,  Euratom) 
2024/2509.  Work  programmes  shall  set  out,  where  applicable,  the  overall  amount 
reserved for blending operations.’. 

Article 6 

This Regulation shall enter into force on the twentieth day following that of its publication in 
the Official Journal of the European Union. 

Article  9(2)  second  subparagraph  and  Article  13  of  the  Regulation  (EU)  2021/697,  as 
amended by the present Regulation, shall apply from 1 January 2025. 

This Regulation shall be binding in its entirety and directly applicable in all Member States. 

Done at Strasbourg, 

For the European Parliament 
The President 

For the Council 
The President 

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