Article 26 — Eligible legal entities

1. Only legal entities established in the Union or in Ukraine and having their executive management structures in the Union or in Ukraine shall be eligible to be recipients of Union funding under this Regulation. Legal entities established in the non-government controlled areas of Ukraine shall not be eligible for funding under this Regulation. 2. The eligibility criteria set out in paragraphs 3 to 9 of this Article shall apply in addition to the criteria set out in accordance with the Financial Regulation. 3. The infrastructure, facilities, assets and resources of the recipients of Union funding involved in an action which are used for the purposes of that action shall be located on the territory of a Member State or of Ukraine for the entire duration of the action. 4. By way of derogation from paragraph 3 of this Article, where recipients of Union funding involved in an action have no readily available alternatives or relevant infrastructure, facilities, assets and resources in the Union or in Ukraine, they may use their infrastructure, facilities, assets or resources which are located or held outside the territory of the Member States or in a third country other than Ukraine, provided that such use does not contravene the security and defence interests of the Union and its Member States, including respect for the principle of good neighbourly relations, and is consistent with the objectives set out in Article 22. The costs related to activities using such infrastructure, facilities, assets or resources shall not be eligible for support from the Ukraine Support Instrument. 5. For the purposes of an action supported by the Ukraine Support Instrument, the recipients of Union funding shall not be subject to control by a non-associated third country other than Ukraine or by another third-country entity. 6. By way of derogation from paragraph 5 of this Article, a legal entity established in the Union and controlled by a non-associated third country other than Ukraine or by another third-country entity shall be eligible to be a recipient of Union funding if guarantees approved in accordance with the national procedures of a Member State in which it is established, such as adequate measures pursuant to screening, as defined in Article 2, point (3), of Regulation (EU) 2019/452, are made available to the Commission. The guarantees referred to in the first subparagraph of this paragraph shall provide assurances that the involvement in an action of a legal entity as referred to in that subparagraph would not contravene the security and defence interests of the Union and its Member States as established in the framework of the CFSP pursuant to Title V of the TEU, including respect for the principle of good neighbourly relations, or the objectives set out in Article 22 of this Regulation. Those guarantees shall in particular substantiate that, for the purposes of an action, measures are in place to ensure that: (a) control over the legal entity is not exercised in a manner that restrains or restricts its ability to carry out the action and to deliver results, that imposes restrictions concerning its infrastructure, facilities, assets, resources, intellectual property or know-how needed for the purposes of the action, or that undermines its capabilities and standards necessary to carry out the action; (b) access by a non-associated third country other than Ukraine or by another third-country entity to classified or sensitive information relating to the action is prevented and the employees or other persons involved in the action have national security clearance issued by a Member State, an associated country or Ukraine, where appropriate, in accordance with national laws and regulations; (c) the ownership of intellectual property arising from actions referred to in Article 27(1), point (b), relating to industrial reinforcement actions fostering industrialisation and commercialisation of defence products that have been developed in the framework of actions funded by the Union or other cooperative activities conducted with support of Member States, is not subject to restriction by a non-associated third country other than Ukraine or by another third-country entity nor transferred to entities established outside the territory of the Member States, of associated countries or of Ukraine, without the approval of the Member State or the associated country in which the legal entity is established or, where the legal entity is established in Ukraine, the approval of Ukraine. Such approval shall not contravene the objectives set out in Article 22. If considered to be appropriate by the Member State in which the legal entity is established, additional guarantees may be provided. The Commission shall inform the committee referred to in Article 77 of any legal entity considered to be eligible to be a recipient of Union funding in accordance with this paragraph. 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 77, in order to ensure a harmonised approach throughout the Union. 8. When carrying out an eligible action, recipients may also cooperate with legal entities established outside the territory of the Member States or of Ukraine, or controlled by a non-associated third country other than Ukraine or by another third-country entity, including by using the assets, infrastructure, facilities and resources of such legal entities, provided that such use does not contravene the security and defence interests of the Union and its Member States, including respect for the principle of good neighbourly relations, or the objectives set out in Article 22. There shall be no unauthorised access by a non-associated third country other than Ukraine or by another third-country entity to classified information relating to the carrying-out of the action, and potential negative effects on the security of supply of inputs critical to the action shall be avoided. The costs related to cooperation with legal entities established outside the territory of the Member States or of Ukraine, or controlled by a non-associated third country other than Ukraine or by another third-country entity, shall not be eligible for support from the Ukraine Support Instrument. 9. Paragraphs 5 and 6 shall not apply to: (a) contracting authorities of Member States and Ukraine; (b) international organisations; (c) SEAPs; (d) the EDA.