Defence Industrial Cooperation

The European Defence Fund (EDF) applicable for the period 2021-2027 aims to foster the competitiveness, efficiency and innovation capacity of the European Defence technological and industrial base, in particular by supporting collaborative R&D actions between companies. Its total budget is close to 8 Billion euros.
Whilst third countries or companies from third countries should normally not control the beneficiaries of the Fund and their subcontractors, derogations remain possible. A company located in the EU and controlled by a third country of by a third country entity can be eligible if guarantees approved by the Member State in which the company is located provide assurances notably that the involvement of this company would not contravene to the security and defence interests of the Union and its Member States or the objectives of the Fund. The control cannot restraint the ability to carry out the action, the access of the third country of third country company to sensitive information must be prevented, and the results of the action cannot be controlled by the third country of third country company. 
A company located in a third country can also cooperate with European companies subject to similar conditions, but cannot be beneficiary of the Fund.
Since one objective of the Fund is to incentivize cooperation between companies, actions must normally be carried out by companies cooperating within a consortium composed of at least three companies from three different Member States.

The support from the Fund can be significant. For research actions, it can cover the totality of the eligible cost, whilst for development actions, the intensity will vary between 20% and 100% of eligible costs, depending on the action and possible bonus.
The experience from the previous Programme implemented in 2019-2020 demonstrates that entities controlled by third countries can actually benefit from the Fund. In 2019/2020, 10 entities controlled by third-countries or third-countries entities from India, Israel, Japan, Oman, Switzerland and United States have been funded.

On 25 May 2022, the Commission has adopted the EDF 2022 work programme which will allocate up to a total of €924 million in funding. The work programme addresses 16 categories, including specific categories for disruptive technologies and SMEs. Calls will be opened in early June and companies will have until the end of 2022 to submit their proposals.

Interested people can also refer to the research paper "European defence fund beneficiaries preliminary lessons learned and open questions" by Alain Alexis, Advisor of the General Director in charge of Defence Industry and Space.



Published: April 2023