The SAFE 35% Clause: Restricting Foreign Content in EU Defence Procurement
How EU Regulation 2025/1106 reshapes supply chains, funding access, and design strategies in common military acquisitions
Council Regulation (EU) 2025/1106 (SAFE) imposes a formal ceiling on the share of non-European components in defence procurement contracts funded by the Union. Article 16(10) requires that components originating outside the EU, EEA EFTA states, and Ukraine account for no more than 35% of the estimated cost of the end product’s components. This clause defines a mandatory eligibility condition—not a general origin rule—for accessing SAFE loans in support of joint military procurement. The rule operates within a defined geographic perimeter and serves as an instrument to reinforce European supply chains while limiting strategic dependencies. It is applied contractually and monitored through procurement plans reviewed by the European Commission. The clause also aligns with broader EU initiatives such as EDIP and the European Defence Fund, forming part of a coherent industrial policy framework aimed at strengthening the EDTIB and mitigating exposure to third-country supply and regulatory risk.
The full report reserved for subscribers offers a detailed legal and operational reconstruction of the 35% clause, its scope, cost basis, and enforceability under SAFE. It examines its integration into EU defence-industrial strategy, outlines its effects on procurement structuring and supply chain composition, and evaluates its financial implications for contractors and Member States. The analysis also covers design-to-compliance practices, industry adaptation, and implications for export control risks and certification processes. Supported exclusively by official EU documentation, the report delivers actionable insight for institutional actors, procurement authorities, defence suppliers and financial stakeholders operating under the EU’s evolving regulatory conditions for defence acquisition.