SAFE: the 35 % rule on component origin
The Security Action for Europe (SAFE) instrument, Council Regulation (EU) 2025/1106, gives Member States financial assistance and sets rules for the common procurement of defence products (Council Regulation (EU) 2025/1106 (SAFE), Article 1, first paragraphThis Regulation establishes the Security Action For Europe (SAFE) through the Reinforcement of the European Defence Industry Instrument (the ‘SAFE instrument’) providing financial assistance to Member States, enabling them to carry out urgent and major public investments in support of the European defence industry in response to the current crisis situation.). Its Article 16 sets conditions on the companies and the components, among them a 35 % cap on components from outside Europe: at least 65 % of component cost must come from the European set.
- Who it covers
- Contractors and subcontractors involved in a common procurement that SAFE supports: the procurement procedures and contracts must include the requirements of Article 16 (Council Regulation (EU) 2025/1106 (SAFE), Article 16(2)2. Common procurement procedures and contracts of defence products shall include the participation requirements for contractors and subcontractors involved in the common procurement set out in paragraphs 3 to 13 and 15 of this Article, without prejudice to any conditions set out in the agreements referred to in Article 17.). The products fall in two categories, from ammunition and small drones to air defence and larger drones (Council Regulation (EU) 2025/1106 (SAFE), Article 1, second paragraph(a) category one: ammunition and missiles; artillery systems, including deep precision strike capabilities; ground combat capabilities and their support systems, including soldier equipment and infantry weapons; small drones (NATO class 1) and related anti-drone systems; critical infrastructure protection; cyber; and military mobility including counter-mobility; (b) category two: air and missile defence systems; maritime surface and underwater capabilities; drones other than small drones (NATO class 2 and 3) and related anti-drone systems; strategic enablers such as, but not limited to, strategic airlift, air-to-air refuelling, C4ISTAR systems as well as space assets and services; space assets protection; artificial intelligence and electronic warfare.).
- The limit
- The cost of components originating outside the European set may not be higher than 35 % of the estimated cost of the components of the end product. No component may come from a third country that contravenes the security and defence interests of the Union and its Member States (Council Regulation (EU) 2025/1106 (SAFE), Article 16(10)10. The cost of components originating outside the Union, EEA EFTA States and Ukraine shall not be higher than 35 % of the estimated cost of the components of the end product. For the purpose of procurements supported by the SAFE instrument, no component shall be sourced from a third country that contravenes the security and defence interests of the Union and its Member States.).
- European under SAFE
- The EU Member States, the EEA EFTA States and Ukraine. Every other country is outside the set. Agreements made under Article 17, such as the one with Canada, can set other conditions (Council Regulation (EU) 2025/1106 (SAFE), Article 16(2)2. Common procurement procedures and contracts of defence products shall include the participation requirements for contractors and subcontractors involved in the common procurement set out in paragraphs 3 to 13 and 15 of this Article, without prejudice to any conditions set out in the agreements referred to in Article 17.; 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.).
- Evidence
- The regulation does not list the documents. The operational arrangements each Member State agrees with the Commission set out the types of documentary evidence for Article 16 (Council Regulation (EU) 2025/1106 (SAFE), Article 10(3)3. The operational arrangements shall set out the relationship between the implementation of a plan and the corresponding financial assistance, including a tentative schedule of disbursement of the loan instalments, with yearly ceilings as appropriate. In addition, these operational arrangements shall set out types of documentary evidence and control rules related to the fulfilment of the specific eligibility rules applied by the Member States in accordance with Article 16, and the detailed elements referred to in Article 14.), and each request for payment comes with the information they name (Council Regulation (EU) 2025/1106 (SAFE), Article 16(14)14. Member States shall detail, in the plan referred to in Article 7, eligibility conditions in line with paragraphs 3 to 11 and 13 to 15 of this Article, without prejudice to any conditions set out in the agreements referred to in Article 17. Financial assistance shall be conditional upon presentation, alongside the request for payment, of the information indicated in the operational arrangements referred to in Article 10.). A company established in the Union but controlled from a third country takes part after investment screening under Regulation (EU) 2019/452, or with guarantees its Member State verifies (Council Regulation (EU) 2025/1106 (SAFE), Article 16(5)5. By way of derogation from paragraph 3, a legal entity established in the Union and controlled by another third country or by another third-country entity may participate in the common procurement if it has been subject to screening within the meaning of Regulation (EU) 2019/452 and, where necessary, to appropriate mitigation measures, or if it provides guarantees verified by the Member State 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 in the common 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.).
Based on the official text of Council Regulation (EU) 2025/1106, checked 12 October 2026. Not legal advice. Not yet expert reviewed.
Every SAFE condition with its article text: SAFE on the Rules page.