Additional eligibility conditions

1. Member States and associated countries participating in a common procurement shall appoint, by unanimity, a procurement agent to act on their behalf for the purposes of that common procurement. The procurement agent shall carry out the procurement procedures and conclude the resulting contracts with contractors on behalf of the participating countries. The procurement agent may participate in the action as a beneficiary and may act as the coordinator of the consortium, and may therefore be able to manage and combine funds from the Instrument and funds from the participating Member States and associated countries.

This Regulation is without prejudice to the rules 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 laid down in Directive 2009/81/EC.

2. The procurement procedures referred to in paragraph 1 shall be based on an agreement to be signed by the participating Member States and associated countries with the procurement agent under the conditions set out in the work programme. The agreement shall, in particular, determine the practical arrangements governing the common procurement and the decision-making process on the choice of the procedure, the assessment of the tenders and the award of the contract.

3. The agreement referred to in paragraph 2 may authorise the procurement agent to procure additional quantities of the concerned defence product for Ukraine or Moldova. Such an authorisation shall be unanimously approved by the Member States participating in the common procurement.

Such additional procurement arrangements shall be without prejudice to applicable Union law and be in line with Member States’ national laws and regulations relating to the export of defence-related products.

4. Common procurement procedures and contracts shall include the participation requirements for contractors and subcontractors involved in the common procurement set out in paragraphs 5 to 12.

5. Contractors and subcontractors involved in the common procurement shall be established and have their executive management structures in the Union or in an associated country. They shall not be subject to control by a non-associated third country or by a non-associated third-country entity or, alternatively, they shall have been subject to screening within the meaning of Regulation (EU) 2019/452 of the European Parliament and of the Council ( 22 ) and, where necessary, to mitigation measures, taking into account the objectives set out in Article 3 of this Regulation.

6. By way of derogation from paragraph 5 of this Article, a legal entity established in the Union or in an associated country and controlled by a non-associated third country or by a non-associated third-country entity may participate in the common procurement if it provides guarantees verified by the Member State or associated country in which the contractor or subcontractor involved in the common procurement is established. The guarantees shall provide assurances that the involvement of the contractor or subcontractor involved in the common procurement does not contravene the security and defence interests of the Union and the Member States as established in the framework of the common foreign and security policy pursuant to Title V of the TEU, or the objectives set out in Article 3 of this Regulation.

7. The guarantees referred to in paragraph 6 of this Article may be based on a standardised template provided by the Commission, assisted by the committee referred to in Article 16, and shall be part of the tender specifications, in order to ensure a harmonised approach throughout the Union. The guarantees shall, in particular, substantiate that, for the purposes of the common procurement, measures are in place to ensure that:

control over the contractor or subcontractor involved in the common procurement is not exercised in a manner that restrains or restricts its ability to fulfil the order and to deliver results; and

access by a non-associated third country or by a non-associated third-country entity to classified information relating to the common procurement is prevented and the employees or other persons involved in the common procurement have a national security clearance issued by a Member State or an associated country in accordance with national laws and regulations.

8. Procurement agents shall provide the Commission with a notification on the mitigation measures applied within the meaning of Regulation (EU) 2019/452 referred to in paragraph 5 of this Article or the guarantees referred to in paragraph 6 of this Article. Further information on the mitigation measures applied or the guarantees shall be made available to the Commission upon request. The Commission shall inform the committee referred to in Article 16 of this Regulation of any notification provided in accordance with this paragraph.

9. The infrastructure, facilities, assets and resources of the contractors and subcontractors involved in the common procurement which are used for the purposes of the common procurement shall be located on the territory of a Member State or of an associated country. Where contractors or subcontractors involved in the common procurement have no readily available alternatives or relevant infrastructure, facilities, assets and resources in the Union or in an associated country, they may use their infrastructure, facilities, assets and resources which are located or held outside the territory of the Member States or of the associated countries, provided that such use does not contravene the security and defence interests of the Union and the Member States and is consistent with the objectives set out in Article 3.

10. Common procurement procedures and contracts shall also include a requirement that the defence product not be subject to a restriction by a non-associated third country or a non-associated third-country entity directly, or indirectly through one or more intermediary legal entities, which limits the ability of a Member State to use that defence product.

11. By way of derogation from paragraph 10 and in light of the geopolitical situation and the urgent need to procure defence products with the support of the Instrument, the requirement referred to in that paragraph shall not apply to urgent and critical defence products, provided that both of the following conditions are met:

Member States or associated countries participating in the common procurement commit to studying the feasibility of replacing the components that cause the restriction with an alternative, restriction-free, component Union origin;

the procured defence products were in use prior to 24 February 2022 within the armed forces of a majority of the Member States participating in the common procurement.

12. The cost of components originating in the Union or associated countries shall not be lower than 65 % of the estimated value of the end product. No components shall be sourced from non-associated third countries that contravene the security and defence interests of the Union and the Member States, including respect for the principle of good neighbourly relations.

13. For the purposes of this Article, ‘subcontractors involved in the common procurement’ means any legal entity which provides critical inputs that possess unique attributes essential for the functioning of a product and which is allocated at least 15 % of the value of the contract.

REGULATION (EU) 2023/2418 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 18 October 2023 on establishing an instrument for the reinforcement of the European defence industry through common procurement (EDIRPA)