Article 20 — Union financial contribution

1. For actions referred to in Articles 13 and 35 of this Regulation, and by way of derogation from Article 193(1) of the Financial Regulation, where the Union financial contribution takes the form of grants the Programme may finance up to 100 % of the eligible costs. 2. Where the Union grant takes the form of financing not linked to costs, pursuant to Article 183(3) of the Financial Regulation, the level of the Union contribution attributed to each action may be based on factors such as: (a) the degree of complexity of the common procurement, for which a proportion of the estimated value of the common procurement contract and the experience gained in similar actions may serve as an initial proxy; (b) the contribution of the action to improving interoperability outcomes; (c) the characteristics of the action which are likely to give rise to greater long-term investment signals to industry, in particular where the common procurement covers activities that would be eligible for funding from the Union budget, such as research and development, testing and certification, initial production or in-service support activities; (d) the number of participating Member States and associated countries, or the inclusion of additional Member States or associated countries in existing cooperations; (e) the contribution of the action to the ramp-up of necessary manufacturing capacities; (f) the contribution of the action to the reduction of dependencies on non-associated countries; (g) the contribution of the action to enhancing cooperation between Member States or associated countries for the purpose of establishing, managing or maintaining defence industrial readiness pools; (h) the contribution of the action to enhancing cooperation between Member States or associated countries resulting in the common procurement of additional quantities of defence products for Ukraine or Moldova; (i) the complexity of the technological solutions necessary for the integration of the defence product procured within the armed forces of a participating Member State. 3. Actions referred to in Article 11 of this Regulation shall be funded by way of grants in the form of financing not linked to costs, pursuant to Article 183(3) of the Financial Regulation. 4. The Union financial contribution to each action referred to in Article 11 shall not exceed 15 % of the estimated value of the common procurement contract concerned. 5. By way of derogation from paragraph 4 of this Article, the Union financial contribution to each action referred to in Article 11 may be up to 25 % of the estimated value of the common procurement contract concerned, provided that at least one of the following conditions is met: (a) the action is carried out by a SEAP; (b) the action supports the common procurement of restriction-free end products; (c) the action results in the common procurement of additional quantities of defence products for Ukraine or Moldova; (d) the action ensures a wide distribution of suppliers across Member States whereby more than 20 % of the total value of the end product is made by suppliers established in at least one Member State other than the Member State in which the prime contractor is established; (e) the defence investment expenditure of the majority of Member States participating in the action concerned exceeded 30 % of their respective defence spending in the financial year preceding the application. 6. For actions referred to in Article 12, the Union financial contribution shall not exceed 35 % of the eligible costs. 7. By way of derogation from paragraph 6 of this Article, the Union financial contribution to each action referred to in Article 12 may be up to 50 % of the eligible costs where the majority of beneficiaries are SMEs or mid-caps established in Member States or in associated countries or where the action is carried out by a SEAP, and where at least one of the following conditions is met: (a) the beneficiary demonstrates a contribution to the creation of new cross-border cooperation between entities established in Member States or associated countries; (b) the action involves building new infrastructure, facilities or production lines from the ground up or on sites not previously used for such activities, contributing to the development of supply chains and technology transfer throughout the Union; (c) the action contributes to the establishment of new, or the ramping-up of existing, manufacturing capacities of crisis-relevant products. 8. The work programmes referred to in Article 21 shall lay down further details.