(fra europaparlaments- og rådsforordningen)

(1) The return of high-intensity warfare brought about by Russia’s unprovoked and unjustified war of aggression against Ukraine constitutes a threat to the Union, which requires a significant and lasting increase in the capacity of Member States to reinforce their defence capabilities and readiness. The long-term deterioration of regional and global security requires an in-depth transformation of the European Defence Technological and Industrial Base (EDTIB) to ensure its ability to deliver innovative defence products, including technologies, required by Member States’ armed forces in sufficient quantities and within the required timeframe, in particular in times of war.

(2) The Heads of State or Government of the Member States, meeting in Versailles on 11 March 2022, committed to bolstering European defence capabilities, increasing defence expenditure by the Member States, stepping up cooperation through joint projects and common procurement of defence capabilities, closing shortfalls, boosting innovation and strengthening and developing the European defence industry.

(3) Innovation is critical to achieving and supporting Europe’s defence readiness, particularly in today’s era of intensifying threats, systemic competition, and geopolitical rivalries. The proliferation of threats has sparked an international arms race and a global technological competition, with emerging and disruptive technologies in fields such as AI, quantum, robotics, cyber and space playing a decisive role in maintaining strategic advantage and ensuring credible deterrence. Achieving those objectives requires rapid testing, validation and integration of those technologies into defence capabilities, as well as continuous engagement with the technology and innovation ecosystem.

(4) Russia’s war of aggression against Ukraine shows how rapidly defence technologies are evolving. Innovation cycles are becoming faster, which means defence products must adapt rapidly and continuously. Those changes are also reshaping battlefield dynamics and underscore the operational relevance of low-cost and software-based solutions that can be iterated upon quickly and fielded at pace, including but not limited to Unmanned Autonomous Systems (‘UAS’), as well as related software, sensors, communications systems and counter-UAS technologies. Small and medium-sized enterprises (‘SMEs’), including innovative start-ups and scale-ups, often with a civilian background, play a key role in supporting Ukraine’s defence and armed forces. Those new defence actors bring faster innovation, greater flexibility, cost-efficient solutions, and new operational ideas and processes. As a result, they are becoming a driving force in transforming the EDTIB. The Joint White Paper of the Commission and of the High Representative of the Union for Foreign Affairs and Security Policy of 19 March 2025 for European Defence – Readiness 2030 highlights the importance of a strong technological innovation ecosystem. This is essential to ensure that Europe’s defence industry, Member States and associated third countries can keep pace with the rapidly changing nature of modern warfare, where the ability to identify, adapt and field emerging technologies has rapidly become a core operational requirement.

(5) To provide comprehensive support for collaborative research and development of defence products, the Union has established the European Defence Fund (EDF). With a budget of EUR 7,3 billion under the 2021-2027 Multiannual Financial Framework, the EDF aims to promote the competitiveness, cooperation, efficiency and innovation capacity of the EDTIB, as well as reduce fragmentation within the EDTIB. As one of the largest defence research and development programmes in Europe, the EDF supports the collaborative development of the most complex defence systems that no Member State could afford to develop alone. It also supports the development of new European defence supply chains. As part of the EDF, the EU Defence Innovation Scheme (EUDIS) was established in 2022 to provide targeted support to non-traditional defence actors, particularly SMEs, and to lower barriers to market entry. The EUDIS involves several initiatives, such as targeted research and development calls, business acceleration and matchmaking services, hackathons, and equity financing, accounting for around 20 % of the EDF budget committed each year. Those actions have contributed to expanding the EDTIB and fostering defence innovation capacity across the Union. In addition, the EDF BraveTech EU initiative provides further support for defence innovators, offering them gradual access to funding alongside technology testing and iterative development cycles. It focuses on developing solutions based on defence needs identified by Ukraine, giving Ukrainian industry a direct opportunity to collaborate with Union defence innovators.

(6) Regulations (EU) 2021/695 (3) and (EU) 2024/795 (4) of the European Parliament and of the Council enable the European Innovation Council (EIC) Accelerator to support dual-use technologies and stimulate investment in defence technologies under the Strategic Technologies for Europe Platform (STEP). In addition, this Regulation allows for direct support by the EIC for defence technologies in the form of direct equity financing.

(7) Regulation (EU) 2025/2653 of the European Parliament and of the Council (5) introduced defence technologies as a fourth area of investment under STEP, alongside biotechnologies, digital technologies and clean technologies. Regulation (EU) 2024/795 provides for the award of a Sovereignty Seal to projects that comply with the minimum quality requirements set out in the programmes listed in that Regulation. The Sovereignty Seal is to be used as a quality label that offers the possibility of receiving funding under other Union programmes, whether total, cumulative or combined, or from Member States. For projects that comply with minimum quality requirements set out in this Regulation to be eligible for a Sovereignty Seal, Regulation (EU) 2024/795 should be amended to include the programme established by this Regulation on the list of eligible programmes.

(8) Regulation (EU) 2025/2653 has also introduced targeted changes to Regulation (EU) 2021/697 of the European Parliament and of the Council (6), particularly with regard to the actions relating to disruptive technology for defence. Specifically, those changes provide the possibility to define in the work programme the most appropriate selection and award criteria and procedures for each call for project proposals. In addition, Regulation (EU) 2026/2382 of the European Parliament and of the Council (7) has introduced further amendments to Regulation (EU) 2021/697, expanding this possibility to cover all calls launched under the European Defence Fund, particularly those aimed at SMEs.

(9) In addition to the support provided through existing Union instruments, a new programme should be established (the ‘Programme’) to provide rapid, agile and targeted support to SMEs to develop innovative defence solutions and ensure their rapid delivery to Member States and associated third countries, with a focus on cost-efficiency. The Programme should focus on supporting the rapid development of emerging and disruptive defence products, including components necessary for their production, up to a high technology readiness level, including the adaptation of civil technologies for defence applications. The Programme should address the most urgent capability development needs of Member States and associated third countries, taking into consideration the capability priorities identified in the context of the common foreign and security policy (CFSP) and the priority capability areas identified at Union level, as well as NATO standards and other relevant standards, with a particular focus on low-cost defence solutions. The Programme should also accelerate the innovation cycles of emerging and disruptive defence products, aligning their development with the urgent needs of Member States and associated third countries, while leveraging the innovation potential of the Union’s defence industry as a whole. It should also foster the uptake of such products by Member States, associated third countries and prime contractors, supporting the scaling-up of SME-developed solutions across Europe and their integration into cross-border defence supply chains and strengthening security of supply for defence products within the Union, ultimately reducing strategic dependencies and contributing to reinforcing the technological edge and operational capabilities of Member States.

(10) In order to ensure the efficient implementation of the Union budget, the Programme will be fully complementary to existing Union instruments supporting defence innovation. The EUDIS supports non-traditional defence actors within the broader EDF framework, including research and development grants for consortia and other support actions targeting single entities, such as Business Accelerator and Matchmaking. The Hub for EU Defence Innovation (HEDI), managed by the European Defence Agency, fosters cooperation among Member States on defence innovation. HEDI helps to connect innovation support at Union level to commonly identified capability needs by structuring innovation activities around operational requirements and by linking promising solutions to testing, experimentation, user engagement and potential pathways towards the uptake of those solutions. Through this approach, HEDI contributes to ensuring that defence innovation support is not only responding to emerging technological developments, but is also anchored in military relevance and practical uptake. The EIC is a key Union innovation programme to identify, develop and scale up breakthrough technologies and disruptive innovation. Following the adoption of Regulation (EU) 2025/2653, the EIC STEP Scale Up Scheme will provide direct equity financing to help defence and dual-use companies to scale up their innovations. The Programme fills a distinct gap, as it will offer streamlined, direct support to individual SMEs for the development of innovative solutions and the uptake of those solutions by Member States and industry, with very short award timelines and a clear link to the capability needs of Member States. It should therefore enable the Union to pilot new approaches to support defence innovation, while complementing existing Union instruments across various maturity levels, consortium sizes, timeframes and technological domains. The rapid evolution of defence threats requires a shift towards a more flexible approach allowing innovative companies, in particular SMEs, to respond quickly to identified capability challenges. The Programme should therefore prioritise challenge-based innovation activities with rapid iteration cycles, directly linked to Member States’ priority operational requirements.

(11) The Commission should seek to maximise synergies among Union programmes in support of innovation. To this end, it could propose fast-track pathways between the Programme and other relevant Union initiatives, such as the EIC Accelerator, the STEP Scale Up Scheme and the EUDIS Business Accelerator. Where relevant, the Programme should also consider potential synergies with NATO activities in the field of defence innovation, including NATO’s Defence Innovation Accelerator for the North Atlantic (DIANA).

(12) The Programme should seek to significantly accelerate the innovation cycles of defence products and technologies with high disruptive potential, including those not yet available on the market, with a view to ensuring that they are fully exploitable and ready for use by end users within one to three years. The Programme should also ensure, where relevant, that Programme-supported products integrate appropriate cybersecurity and cyber-resilience safeguards. It should offer innovators the greatest possible flexibility to propose novel solutions, including when acting as single legal entities, while allowing for subcontracting of specific tasks or collaboration with other entities during implementation.

(13) A persistent structural challenge faced by European defence SMEs is the gap between successful innovation and operational deployment by the armed forces of Member States and associated third countries. To address that gap, the Programme should align with the genuine and prioritised defence needs of Member States and associated third countries. In doing so, it should support the uptake of innovative solutions by their armed forces and defence industries, particularly prime contractors and first-tier subcontractors. The Programme should establish a fast-track process to enable the Union to support the testing and deployment of innovative support mechanisms that address the most urgent defence readiness requirements, including in support of the priority capability areas identified at Union level and European Defence Projects of Common Interest (EDPCIs), where relevant. The Programme should establish a fast-track process for accessing testing and experimentation facilities in the Union and, where relevant and subject to their agreement, in associated third countries.

(14) The Programme should support activities involving field testing, experimentation and demonstrations, including by drawing on the ongoing work of the European Defence Agency, where appropriate. Those activities should allow entities to validate innovative solutions in realistic operational conditions, generating real-time feedback that can be used to refine and improve the solutions through an iterative process. The active involvement of Member States and relevant industrial actors, such as prime contractors and first-tier subcontractors, is crucial at every stage of that process, from setting up testing requirements to assessing demonstrated capabilities. That involvement can help create credible demand signals and facilitate subsequent procurement decisions. Additionally, the Programme can support the uptake of new technologies and products by aggregating demand and using innovative procurement mechanisms, such as innovation partnerships. Shared platforms and services can also be developed to address the common operational needs of multiple end users.

(15) Space-based capabilities have become indispensable enablers of modern defence and security operations, providing critical functions including intelligence, surveillance and reconnaissance, secure communications, positioning, navigation and timing, and early warning. Moreover, the increasing reliance of armed forces on space-based assets, combined with the growing vulnerability of space infrastructure to threats, makes the resilience and responsiveness of the European space sector a strategic priority. The dual-use nature of space technologies and services means that innovation in the space sector has direct and immediate implications for defence capabilities, and that defence-driven demand can accelerate the development and commercialisation of European space technologies. The Programme should therefore support the development of innovative space-based and space-enabled defence capabilities, by including new entrants and non-traditional actors, to enhance the Union’s strategic autonomy in space and strengthen the EDTIB. This includes contributing to the development of a future Earth Observation Governmental Service with autonomous, resilient and defence-grade earth observation capabilities. The Programme should also support activities in the space domain to accelerate the uptake of space-based defence capabilities by Member States and by the Union, in line with the Space Programme, the Secure Connectivity Programme or as regards the activities of the European Union Satellite Centre, while ensuring consistency with the relevant Union space-related initiatives.

(16) In order to ensure uniform conditions for the implementation of this Regulation, implementing powers should be conferred on the Commission for the adoption of work programmes and award decisions. Those powers should be exercised in accordance with Regulation (EU) No 182/2011 of the European Parliament and of the Council (8).

(17) In accordance with Article 153(3) of Regulation (EU, Euratom) 2024/2509 of the European Parliament and of the Council (9), the evaluation committee can be assisted by external experts, pursuant to a decision of the authorising officer responsible. To protect the confidentiality of the work of the evaluation committee, by way of derogation from Article 242(4) of that Regulation, the list of independent experts should not be made public.

(18) The work programme should set out calls for proposals, which can take the form of challenges that address specific defence needs identified in coordination with Member States through a structured process involving Member States, so that supported projects respond to the genuine and prioritised defence needs of Member States. Those specific defence needs should also be identified on the basis of the EU Capability Priorities, which are derived from the Capability Development Plan and complemented, as appropriate, by the gaps and opportunities identified through the Coordinated Annual Review on Defence. The European Defence Agency, as the body responsible for the Capability Development Plan and as host of the HEDI, and the European External Action Service, including the European Union Military Staff, as well as representatives of associated third countries, should be closely associated with the identification of challenges. The Commission should also be able to draw, on a strictly advisory basis, on input from established defence industry actors and the wider EDTIB, including prime contractors, for the formulation of challenges, with a view to addressing specific, mission-driven capability needs, provided that such input does not influence the design of calls for proposals in a manner detrimental to fair competition or to the participation of new defence actors, in particular SMEs and innovative start-ups and scale-ups. In all cases, priority should be given to challenges that attract the broadest possible support from Member States, reflecting genuine common demand and strategic alignment, and contributing to the defence readiness of the Union as a whole. To cover the full range of innovation, the Programme should also include calls that address broader defence innovation objectives. In the selection of projects under those calls, the Commission should ensure that the Programme contributes to strengthening defence industrial capacity across the Union as a whole and to addressing both urgent and lasting threats.

(19) The Programme aims to support the innovation efforts of non-traditional defence actors and primarily SMEs. By providing targeted support, the Programme seeks to accelerate the maturation and fine-tuning of their disruptive technologies and products and to bring those technologies and products closer to the market, ultimately enhancing the competitiveness and growth of those actors.

(20) Third countries which are members of the European Economic Area should be able to participate in the Programme as associated third countries in the framework of the cooperation established under the Agreement on the European Economic Area (10), which provides for the implementation of the programmes on the basis of a decision adopted under that Agreement. Ukraine should also be able to participate in the Programme as an associated third country, in line with the Association Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and Ukraine, of the other part (11).

(21) Russia’s war of aggression against Ukraine has caused tremendous damage in Ukraine. Moreover, Ukraine has lost access to international financial markets and experienced a significant drop in public revenue, while public expenditure has increased substantially. Against that background, it is likely that Ukraine will have substantive funding needs in the coming years. For that reason, Ukraine will not be required to contribute financially to the Programme in order to be associated to it. The association agreements for participation in the Programme will set out the specific terms and conditions governing the participation of Ukraine in the Programme.

(22) As the Programme aims to support the innovation capacity of the Union’s defence industry, only legal entities that are established in the Union or in associated third countries and are not subject to control by non-associated third countries or by non-associated third-country entities should be eligible for support. Additionally, to protect the essential security and defence interests of the Union and its Member States, the infrastructure, facilities, assets and resources of the recipients of Union funding and subcontractors involved in an action supported by the Programme should be located on the territory of a Member State or of an associated third country for the entire duration of the action, and the recipients should have their executive management structures located in the Union or in an associated third country. To safeguard those essential security and defence interests, those eligibility criteria should also apply to funding provided through procurement.

(23) The interim evaluation of the EDF has shown that the administrative burden and time required to provide guarantees when a recipient of Union funding established in the Union is controlled by a non-associated third country or by a non-associated third-country entity are incompatible with the speed and flexibility necessary for effective programme implementation. To address this challenge and to facilitate the swift implementation of the Programme, derogations from the principle that the recipients must not be controlled by entities established outside the Union or outside the associated third countries should not be permitted. Experience from previous defence industry programmes also indicates that the provision of guarantees results in additional procedural complexity and longer evaluation periods, while removing this exception would be unlikely to significantly affect the number of eligible entities.

(24) To ensure Member States can benefit from cutting-edge technologies and innovation, the Programme should be able to provide incentives to attract SMEs established outside the Union or associated third countries that have the potential to contribute significantly to the achievement of the Programme’s objectives. Any such Union funding should be conditional upon the SME concerned being controlled by a Member State or an associated third country or by an entity established in a Member State or in an associated third country, and upon that SME neither being established nor having its executive management structures located in Russia or in countries supporting Russia’s war of aggression against Ukraine, taking into account the current context and, in particular, Russia’s unprovoked and unjustified war of aggression against Ukraine.

(25) In a limited number of cases, the work programme should be able to identify certain award procedures under which SMEs could participate in the Programme even if they do not yet meet the eligibility criteria relating to their establishment or the establishment of their executive management structures in the Union or an associated third country. The mechanism, referred to in this Regulation as ‘inducement intervention’, consists of granting recipients of Union funding a temporary and conditional suspension of that eligibility criterion, which they would have to comply with within the timeline specified in the legal commitment to receive Union funding. The inducement intervention should remain without prejudice to the Programme’s primary objective of supporting SMEs established in the Union or in associated third countries. Furthermore, Union funding for the costs of relocation of the establishment of those SMEs or of their executive management structures to the Union or to an associated third country can be provided. The financial interests of the Union should be duly protected and payments should only be made once the eligibility criteria have been fulfilled by the end of the period specified in the legal commitment. To preserve the targeted and exceptional nature of that support, it should be possible to provide, in the work programme, ceilings for inducement interventions and the financial support for the cost of relocation, both in terms of overall share of the financial envelope and in terms of total Union funding granted to individual recipients.

(26) To enable the inducement intervention to achieve its intended purpose, it should be possible to derogate from the eligibility criterion that the recipients of Union funding be established and have their executive management structure located in the Union or in an associated third country to receive Union funding, provided that that funding specifically aims to facilitate compliance with those eligibility criteria, including by covering the costs associated with the relocation of the company or the establishment of its executive management structure in the Union or in an associated third country.

(27) In order to ensure that, in the implementation of this Regulation, the international obligations of the Union and its Member States are respected, actions relating to products the use, development or production of which is prohibited by international law should not be supported by the Programme. In that respect, the eligibility of actions relating to emerging and disruptive defence products should also be subject to developments in international law. Moreover, actions for the development of lethal autonomous weapons without the possibility of meaningful human control over selection and engagement decisions when carrying out strikes against humans should not be eligible for support from the Programme, without prejudice to the possibility of providing Union funding for actions for the development of early warning systems and countermeasures for defensive purposes. Given the speed required for the development of innovative and breakthrough defence technologies and the overarching intention of the Programme to attract SMEs, start-ups, scale-ups and non-traditional defence actors, the Commission should ensure that this does not impose an undue administrative burden on applicants. Furthermore, evaluation of this requirement should not cause delays in the implementation of the Programme.

(28) Given the need for the actions supported by the Programme to be implemented within a short timeframe, while minimising the administrative burden on applicants, financing not linked to cost or simplified cost options should be used where the Union funding is provided in the form of a grant. Given the need to ensure swift, accessible and results-oriented support for SMEs, including innovative start-ups and scale-ups, grants under the Programme should take, whenever possible, the form of lump sums in order to reduce the administrative burden, increase predictability for the recipients of Union funding and allow them to focus on the achievement of agreed outputs. Union funding should be provided in the form of reimbursement of actual eligible costs only where the objectives of a specific action cannot be achieved in any other way.

(29) The functioning of the defence industry does not follow the conventional rules and business models that govern more traditional markets. Demand comes almost exclusively from national governments, which also control all acquisition of defence-related products and technologies, including exports. Therefore, the defence industry, in particular small and non-traditional defence innovators, does not engage in substantial self-funded innovation projects, and Member States and associated third countries often fund all related costs. Furthermore, those actors face persistent barriers in accessing finance, including co-financing, in particular private financing for investments, due to the risks market actors associate with such investments. Therefore, leveraging public investment for the Union defence industry is vital, given the compelling need to boost investment in defence innovation. As those measures would not otherwise be undertaken, it appears justified that, without prejudice to Article 193 of Regulation (EU, Euratom) 2024/2509, Union funding can be provided to cover up to 100 % of the eligible costs for actions eligible under the Programme.

(30) To further simplify and accelerate the submission and evaluation process, Union funding should be provided through a dedicated evaluation procedure involving certain checks after the award decision has been made. Applicants should be invited to submit proposals together with a short summary. That summary should be evaluated before the proposals are evaluated in full against the relevant award criteria set out in the work programme. That approach is intended to reduce the administrative burden on applicants and provide financial certainty as quickly as possible, while accepting a reasonable level of financial or legal risk for the Union, proportionate to the objectives pursued. The financial interests of the Union should be duly protected and no financing should be provided before the final evaluation has been completed.

(31) To further simplify and accelerate the submission and evaluation process, it should be possible to derogate from certain other obligations laid down in Regulation (EU, Euratom) 2024/2509. In particular, derogations from Articles 199, 201 and 203 of that Regulation, which concern the content and assessment of grant applications, and from Article 170(1), points (b) and (c), and Article 170(2) of that Regulation, which concern procurement procedures, should be allowed. Those derogations should enable the award decisions to be adopted and the grant agreements to be signed on the basis of a preliminary assessment of eligibility and selection criteria, relying, where appropriate, on applicants’ and tenderers’ declarations on honour, including with regard to the control requirements, without requiring supporting documents at that stage. Furthermore, the timelines for notifying the results of the preliminary evaluation and for the adoption of the award decision should be shortened and specified in the work programme, which would enable the Commission to act without delay. The final evaluation of the relevant criteria should nevertheless be completed within four months of the application deadline. The financial interests of the Union should be duly protected and payments should only be provided once the final evaluation has been completed.

(32) As an alternative to the accelerated evaluation procedure and in order for the Union to support innovative solutions without initial artificial narrowing or limitation resulting from the specific form taken by the Union support, the Programme should allow for a more flexible and accessible approach to identifying, selecting and supporting innovative projects and ideas, including through instrument-neutral award procedures. Under that approach, ideas should be assessed and selected based on their merit with regard to their contribution to the objectives of the Programme. The most appropriate and effective budget implementation instrument under the Programme, whether a grant, procurement or another form of support, should be determined only after the selection procedure, taking into account the specific characteristics, requirements and merits of the individual project.

(33) To remain attractive to a broader range of potential applicants and to address an existing gap in the defence innovation cycle, it is necessary and proportionate to allow costs that were incurred before the submission of the grant application to be eligible for Union funding, as provided for in Article 196(2) of Regulation (EU, Euratom) 2024/2509. The Programme focuses on late-stage development activities that bridge the critical gap between commercialisation and procurement, bringing emerging and disruptive defence products closer to market readiness and operational deployment. Innovative companies, in particular SMEs, often initiate and self-fund development work before formal funding opportunities become available. That approach will enable the Programme to support critical innovation actions that started up to three months before the closing of the call for proposals and to provide Union funding to accelerate their completion, ensuring the timely delivery of results addressing the most urgent challenges faced by the armed forces of Member States and associated third countries.

(34) Directive 2009/81/EC of the European Parliament and of the Council (12) provides for a specific exclusion from the obligations for contracts awarded under certain cooperative programmes involving research and development activities. Following the adoption of Directive (EU) 2026/2383 of the European Parliament and of the Council (13), Directive 2009/81/EC clarifies that a research and development project managed by Union institutions or bodies and implemented in accordance with Union rules and funded from the Union budget constitutes a cooperative programme conducted jointly by at least two Member States and can continue to cover phases following the research and development phase. In such a case, contracts awarded following those phases should also be able to be excluded. That exclusion applies, in particular, to contracts awarded within the framework of projects supported by the Programme.

(35) Regulation (EU) 2026/467 of the European Parliament and of the Council (14) provides for Union assistance to Ukraine in the form of a loan aimed at providing predictable, continuous, flexible and timely financial and economic assistance to help meet financing needs arising from Russia’s war of aggression against Ukraine and its failure to pay reparations. In accordance with Article 13(4), point (f), of that Regulation, manufacturers and subcontractors involved in the production of defence products that have fulfilled eligibility conditions under certain Union defence programmes equivalent to the eligibility conditions laid down in that Regulation can be considered to fulfil the eligibility conditions set out therein. As the Programme had not been established at the time of adoption of that Regulation, it is appropriate to amend that Regulation to provide that the recipients of Union funding under the Programme that have fulfilled equivalent eligibility conditions can be considered to fulfil the eligibility conditions under that Regulation, provided that no subsequent changes have called into question the fulfilment of those conditions.

(36) To ensure the security of classified information at the appropriate level, it is essential to comply with the minimum standards on industrial security when concluding classified funding and financing agreements. To that end, and in accordance with applicable national laws, the Member States and associated third countries on whose territory the recipients of Union funding are established should establish a security framework, comprising Project Security Instructions and a related Security Classification Guide, where the implementation of the Programme would involve or generate information requiring a classification level.

(37) This Regulation should apply without prejudice to Union competition rules, in particular Articles 101 to 109 of the Treaty on the Functioning of the European Union and the legal acts that give effect to those Articles.

(38) It is appropriate to lay down an indicative financial envelope for the Programme.

(39) Regulation (EU, Euratom) 2024/2509 lays down the rules on the establishment and implementation of the general budget of the Union, including the rules on grants, prizes, non-financial donations, procurement, indirect management, financial assistance, financial instruments and budgetary guarantees.

(40) In accordance with Regulation (EU, Euratom) 2024/2509, Regulation (EU, Euratom) No 883/2013 of the European Parliament and of the Council (15), Council Regulation (EC, Euratom) No 2988/95 (16), Council Regulation (Euratom, EC) No 2185/96 (17) and Council Regulation (EU) 2017/1939 (18), the financial interests of the Union are to be protected through proportionate measures, including measures for the prevention, detection, correction and investigation of irregularities and fraud, the recovery of funds lost, wrongly paid or misused and, where appropriate, the imposition of administrative penalties.

(41) In particular, in accordance with Regulations (EU, Euratom) No 883/2013 and (Euratom, EC) No 2185/96, the European Anti-Fraud Office (OLAF) can carry out investigations, including on-the-spot checks and inspections, with a view to establishing whether fraud, corruption or any other illegal activity affecting the financial interests of the Union has occurred. In accordance with Regulation (EU) 2017/1939, the European Public Prosecutor’s Office (EPPO) can investigate and prosecute fraud and other illegal activities affecting the financial interests of the Union as provided for in Directive (EU) 2017/1371 of the European Parliament and of the Council (19).

(42) In accordance with Regulation (EU, Euratom) 2024/2509, any person or entity receiving Union funding is to fully cooperate in the protection of the Union’s financial interests, to grant the necessary rights and access to the Commission, OLAF, EPPO and the European Court of Auditors and to ensure that any third parties involved in implementing Union funds grant equivalent rights.

(43) In view of the urgent need to support crucial investments in defence capabilities, in particular in defence innovation, in the context of pressing geopolitical challenges, it is appropriate that this Regulation enters into force on the day following that of its publication in the Official Journal of the European Union.

(44) Given that the Programme is designed to be limited in duration and scope, it should be without prejudice to any future Union programmes or instruments providing support for defence industry policy.

(45) The Commission should assess the effectiveness of the Programme in achieving the objectives set out in this Regulation. That assessment should also evaluate whether the implementation mechanisms introduced under the Programme, including accelerated award procedures and flexible forms of Union support, should be expanded, adapted or incorporated into future Union programmes. The results of that evaluation should inform future decisions on Union support for SMEs for defence innovation. To that effect, the Commission should draw up a report on the implementation of the Programme, including information on the level of participation of SMEs, the geographical distribution of supported entities across the Union and associated third countries, the thematic distribution of supported activities, the breakdown of expenditure by type of the action supported by the Programme, the effectiveness of simplified award procedures relative to benchmarks in existing instruments, and aggregated data on the uptake of Programme-funded products. The report should be submitted to the European Parliament and the Council. Given the high-risk and high-potential nature of emerging and disruptive defence innovation, the success of the Programme should be assessed at portfolio level.

(46) Since the objective of this Regulation, in particular the strengthening of the competitiveness and the innovation capacity of the EDTIB throughout the Union, cannot be sufficiently achieved by the Member States but can rather, by reason of the scale and effects of the Programme in supporting defence innovation across the Union, be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve that objective,