Article 35 — European Defence Projects of Common Interest

1. European Defence Projects of Common Interest (EDPCIs) shall consist of collaborative industrial projects aimed at reinforcing the competitiveness of the EDTIB throughout the Union while contributing to the development of Member States’ military capabilities critical for the security and defence interests of the Union, and including those capabilities securing access to all operational domains, namely land, maritime, air, space and cyber. 2. EDPCIs shall meet all the following criteria: (a) they significantly strengthen the competitiveness, efficiency and innovation capacity of the EDTIB, in particular by: (i) contributing to the establishment of new or the broadening of existing cross-border cooperation, including with SMEs and mid-caps; (ii) creating positive spill-over effects in the internal market; (iii) significantly contributing to market integration and reduction of market fragmentation; (iv) improving the interoperability and interchangeability of defence products; and (v) aiming to reduce strategic dependencies, including by means of supply diversification and scaling up capacities; (b) they contribute to the development of Member States’ military capabilities critical for the security and defence interests of the Union and are consistent with the objectives of the Strategic Compass for Security and Defence, with the defence capability priorities commonly agreed by Member States within the framework of the CFSP, in particular in the context of the CDP, and with the collaborative opportunities identified in the context of CARD; (c) they take into account Member States’ cooperation in the framework of PESCO and EDA initiatives and projects; (d) they take into account the relevant activities carried out by NATO, such as the NATO Defence Planning Process, where such activities serve the security and defence interests of the Union; (e) they involve at least four Member States, and all Member States and associated countries, as well as Ukraine, are given a genuine opportunity to participate in the EDPCI; (f) their benefits extend to a wider part of the Union; (g) they are particularly significant in size or scope or aim to mitigate a considerable level of technological or financial risk, or both; (h) their potential overall benefits outweigh their costs, including in the longer term. 3. The Council, acting upon a proposal from the Commission, may adopt implementing acts identifying EDPCIs. 4. Member States shall coordinate to prepare project proposals for possible EDPCIs in an inclusive way, with the support of the EDA where necessary. 5. Before proposing the implementing acts as referred to in paragraph 3, the Commission shall verify the compliance of the project proposals referred to in paragraph 4 with all the criteria listed in paragraph 2 and: (a) consult Member States in an inclusive manner and take into account their views and project proposals for possible EDPCIs; (b) invite the High Representative of the Union for Foreign Affairs and Security Policy (the High Representative) and the EDA to provide their expertise with a view to ensuring consistency with the priorities and objectives referred to in paragraph 2, points (b), (c) and (d), in particular the defence capability priorities commonly agreed by Member States within the framework of CFSP, in particular as jointly expressed in the context of the CDP, to complement the information provided by Member States regarding project proposals; and (c) verify that all Member States and associated countries, and, where relevant, Ukraine, were informed of the emergence of a project and were given the opportunity to participate. 6. In the implementing acts referred to in paragraph 3, the Council shall: (a) set out the objectives and characteristics of the EDPCI in relation to the criteria set out in paragraph 2; (b) establish the list of countries participating in the EDPCI at the date of the adoption of the implementing act; and (c) estimate the overall financial size of the EDPCI. 7. The Council shall adopt the implementing acts referred to in paragraph 3 acting by qualified majority. The Council may amend the project proposals referred to in paragraph 4 acting by qualified majority. 8. The deployment of an EDPCI which is eligible for Union funding as referred to in Article 10(1), point (d), shall consist only of one or more activities related to: (a) the common procurement of defence products; (b) accelerating the adjustment to structural changes of the production capacity of defence products, as well as related supporting activities; (c) the industrial development of new defence products or the upgrading of existing ones; (d) the development and procurement of necessary infrastructure. 9. The participating Member States shall ensure that criteria equivalent to those set out in Article 9 are applied in the contracts relating to the EDPCI activities supported by Union funding. For the common procurement of defence products supported by Union funding under EDPCIs, Article 11(6) shall also apply. 10. Member States participating in an EDPCI shall ensure that the EDPCI activities, including those not supported by Union funding, comply with the objectives set out in Article 4 and in paragraph 1 of this Article and do not affect compliance of the EDPCI with the criteria set out in paragraph 2 of this Article. 11. An EDPCI may address the development of dual-use capabilities for the Union. 12. An EDPCI, as well as its specific activities, may be established in the framework of a SEAP. 13. Only Member States and associated countries, as well as SEAPs consisting of Member States or of Member States and associated countries, shall be eligible for funding under EDPCI activities. 14. The Commission shall be able, where relevant, to participate in the project. Participating Member States may decide to involve the High Representative and the EDA as observers to an EDPCI. 15. Member States may, without prejudice to Articles 107 and 108 TFEU, apply support schemes and provide for administrative support to EDPCIs. 16. The planning, construction and operation of production facilities related to an EDPCI may be considered an imperative reason of overriding public interest within the meaning of Article 6(4) and Article 16(1), point (c), of Council Directive 92/43/EEC and Article 4(7) of Directive 2000/60/EC of the European Parliament and of the Council, in the interests of defence within the meaning of Article 2(3) of Regulation (EC) No 1907/2006 of the European Parliament and of the Council and in the interests of public health and safety within the meaning of Article 9(1), point (a), of Directive 2009/147/EC of the European Parliament and of the Council, provided that the other conditions set out in those provisions are fulfilled. 17. Member States participating in an EDPCI shall submit to the Commission, on an annual basis, a joint report on the implementation of the EDPCI activities, including on compliance with the requirements set out in paragraph 10 of this Article. 18. Upon a proposal from the Commission, the Council, acting by qualified majority, may amend the implementing acts adopted pursuant to paragraph 3, including by removing a project as an EDPCI or by reflecting changes to the elements set out in paragraph 6. 19. All Member States and associated countries, and Ukraine, shall have the opportunity to join an EDPCI after its establishment, subject to the approval of all Member States participating in the EDPCI.