EU-Canada agreement: Canadian content under SAFE
The Agreement between the European Union and Canada on participation in the SAFE instrument (OJ L, 2026/445) sets the conditions for Canadian companies, and for products originating in Canada, in procurements that SAFE supports (Agreement between the European Union and Canada on participation in the SAFE instrument (OJ L, 2026/445), Article 1Article 1
Objective and Scope
The objective of this Agreement is to lay down the conditions for the participation of Canadian legal entities and products originating in Canada in procurements supported by Council Regulation (EU) 2025/1106 establishing the Security Action for Europe (SAFE) through the Reinforcement of the European Defence Industry Instrument (the ‘SAFE Instrument’ or ‘Regulation (EU) 2025/1106’) in accordance with its Article 17.). Canadian components get a group of their own, with three tests instead of SAFE’s single 35 % cap (at least 65 % European): European components need only reach 20 %.
- Who it covers
- Canadian legal entities taking part as contractors or subcontractors (Agreement between the European Union and Canada on participation in the SAFE instrument (OJ L, 2026/445), Article 5(1)1. Canadian legal entities may participate in a procurement supported by the SAFE Instrument, as contractors and subcontractors involved in a procurement supported by the SAFE Instrument, subject to the conditions set out in paragraphs 2 to 7 of this Article.). They must be established in Canada, have their executive management structures in Canada, the Union, an EEA EFTA State or Ukraine, and not be controlled from a third country (Agreement between the European Union and Canada on participation in the SAFE instrument (OJ L, 2026/445), Article 5(2)2. Canadian legal entities must be established in Canada and have their executive management structures in Canada, in the Union, in an EEA EFTA State, or in Ukraine. They must not be subject to control by a third country or by an entity which is established in a third country, or which is established in the Union, in an EEA EFTA State, in Ukraine or in Canada and has its executive management structures in a third country.).
- The limit
- Three tests on the cost of the components of the end product. Components originating in Canada may exceed 35 %. European components must reach at least 20 %. Components from third countries may not cost more than the European ones, and in any case no more than 35 % (Agreement between the European Union and Canada on participation in the SAFE instrument (OJ L, 2026/445), Article 5(8)8. The cost of components originating in Canada may exceed 35 % of the estimated cost of the components of the end product. The cost of components originating either in the Union, an EEA EFTA State or Ukraine must not be lower than 20 % of the estimated cost of the components of the end product. The cost of the components from third countries must not exceed the cost of components originating in the Union, an EEA EFTA State, or Ukraine, and in any case may not exceed 35 % of the cost of the components of the end product.).
- Country groups
- European means the Union, the EEA EFTA States and Ukraine. Canada is counted on its own, as neither European nor third country, and every other country is a third country (Agreement between the European Union and Canada on participation in the SAFE instrument (OJ L, 2026/445), Article 5(8)8. The cost of components originating in Canada may exceed 35 % of the estimated cost of the components of the end product. The cost of components originating either in the Union, an EEA EFTA State or Ukraine must not be lower than 20 % of the estimated cost of the components of the end product. The cost of the components from third countries must not exceed the cost of components originating in the Union, an EEA EFTA State, or Ukraine, and in any case may not exceed 35 % of the cost of the components of the end product.).
- Evidence
- A Canadian entity controlled from a third country takes part only with a guarantee on the Commission’s standardised template, verified by a Member State in the procurement (Agreement between the European Union and Canada on participation in the SAFE instrument (OJ L, 2026/445), Article 5(3)3. By way of derogation from paragraph 2 of this Article, a Canadian legal entity controlled by a third country or by an entity which is established in a third country, or which is established in the Union, in an EEA EFTA State, in Ukraine, or in Canada and has its executive management structures in a third country may participate in a procurement supported by the SAFE Instrument if it provides a guarantee to be verified by at least one Member State participating in that procurement. The guarantee must provide assurances that the involvement of the contractor or subcontractor in that procurement does not contravene the security and defence interests of the Union and its Member States as established in the framework of the common foreign and security policy pursuant to Title V of the Treaty on European Union., Agreement between the European Union and Canada on participation in the SAFE instrument (OJ L, 2026/445), Article 5(4)4. The guarantees referred to in paragraph 3 of this Article must be based on a standardised template provided by the European Commission (the ‘Commission’) which must form part of the tender specifications. The guarantees must in particular substantiate that, for the purposes of the procurement supported by the SAFE Instrument, measures are in place to ensure that: (a) control over the contractor or subcontractor involved in the procurement supported by the SAFE Instrument is not exercised in a manner that restrains or restricts its ability to fulfil the order and to deliver results; and (b) a third country or an entity which is established in a third country, or which is established in the Union, in an EEA EFTA State, in Ukraine or in Canada and has its executive management structures in a third country is prevented from accessing classified information relating to the procurement supported by the SAFE Instrument and the employees, or other persons, involved in the common procurement have a national security clearance issued by a Member State or Canada in accordance with their respective domestic laws and regulations.). The contracting authority gives the participating Member States a justified declaration that no component comes from a third country that contravenes the security and defence interests of the Union and its Member States (Agreement between the European Union and Canada on participation in the SAFE instrument (OJ L, 2026/445), Article 5(9)9. No components may be sourced from a third country that contravenes the security and defence interests of the Union and its Member States as established in the framework of the common foreign and security policy pursuant to Title V of the Treaty on European Union. The contracting authority conducting the procurement supported by the SAFE Instrument shall provide a justified declaration of compliance to the Member States participating in the procurement establishing that no component is sourced from a third country that contravenes these interests. This declaration shall be made available to the Commission.).
Based on the official text of the EU-Canada agreement (OJ L, 2026/445), checked 12 October 2026. Not legal advice. Not yet expert reviewed.
Every condition of the agreement with its article text: EU-Canada on the Rules page.