SAFE programme – major opportunity, but with strict requirements: eligibility, control and production chains under scrutiny

Authors: Daniel Mazilu (senior associate), Bianca Voica (associate)

1. Background on the SAFE Programme

Changes in the European security environment have revealed a difficult reality. Years of underfunding in defence have left the European Union vulnerable, with a fragmented industry and insufficient resources. Russia’s war against Ukraine, together with the current positions of the United States of America on NATO, have turned this vulnerability into a real emergency, requiring a commensurate response.

In this context, the European Union adopted Regulation (EU) 2025/1106, establishing  the Security Action for Europe programme (hereinafter referred to as the “SAFE Regulation” or “SAFE”), a financial instrument designed to support and accelerate joint procurement of defence equipment.

With a total value of EUR 150 billion, SAFE is the first large-scale financial mechanism under the ReArm 2030 initiative launched by the European Commission, which aims to mobilize approximately EUR 800 billion to strengthen the defence capabilities of the Member States. Out of the total SAFE funds, Romania has received the second-largest allocation within the EU, totalling over EUR 16.6 billion.

Beyond its financial scale, the programme pursues far-reaching objectives. At the same time, SAFE raises a number of legal issues and introduces a set of rules that directly influence who can participate, under what conditions and with what industrial structure.

SAFE is not just a new financing mechanism, but an instrument that redefines access criteria to European defence procurement for potential contractors, through strict conditions of eligibility, control, location and origin of components. In this context, the structure of the control of the companies concerned, the supply chain and the organisation of production capacities become key elements of compliance, not mere commercial considerations.

2. Eligibility conditions applicable to economic operators

From the perspective of economic operators, the SAFE Regulation introduces strict eligibility conditions, targeting the establishment and control structure of operators, the location of the infrastructure, facilities, assets and resources used, as well as compliance with requirements regarding the origin of the components of the final products.

The general rule regarding the establishment and control structure of contractors and subcontractors involved in procurement procedures related to SAFE is set out in art. 16 para. (3) of the SAFE Regulation. This paragraph lays down the general rule that the economic operators involved must be established and have executive management structures in the Union, an EEA-EFTA State or Ukraine. In addition, they must not be subject to the control of a third country or an entity from another third country.

Art. 16 para. (5) of the SAFE Regulation introduces a significant exception to this general rule, allowing companies controlled from outside the Union / EEA–EFTA / Ukraine to participate under certain conditions. In this respect, a legal entity established in the European Union but under the control of a third country or a third-country entity may participate in public procurement financed by SAFE if:

i. has been subject to an examination within the meaning of Regulation (EU) 2019/452 on the screening of foreign direct investments and, where necessary, to appropriate mitigation measures, or

ii. provide guarantees verified by the Member State in which it is established, proving that its participation does not contravene the security and defence interests of the European Union.

This exception may provide a favourable framework for non-EU economic operators wishing to participate in projects financed by SAFE. Its practical relevance, however, depends on the concrete way in which these two mechanisms, guarantees and foreign direct investment screening, will be applied.

Thus, as regards the content of the guarantees, art. 16 para. (6) of the SAFE Regulation provides that they must certify, in particular, that:

• control over the contractor or subcontractor is not exercised in a manner that restrains or restricts its ability to fulfil the order and to deliver results, and
• the access by a third country or by a third-country entity to classified information relating to the common procurement is prevented and the personnel involved hold national security clearances issued by a Member State.

The same paragraph provides that the guarantees requested by the Member States may be based on a standardised template provided by the European Commission and will form part of the tender specifications of each procurement procedure. However, as of the date of this article, the standardised template has not yet been published by the Commission, and its absence may give rise to significant uncertainties for both economic operators and Member States. In the absence of an official document, Member States have a wide margin of discretion in assessing the guarantees offered, which can lead to inconsistent approaches and unpredictability for the economic operators involved.

In this context, the foreign direct investment screening mechanism (the “FDI screening”) tends to become, in practice, the main option for economic operators under the control of entities outside the European Union / EEA-EFTA / Ukraine. This trend is mainly explained by the fact that this procedure is already regulated and commonly applied, both at EU and national level.

Unlike providing guarantees, for which the SAFE Regulation sets out only a general framework and refers to a standardised template that has not yet been published, FDI screening operates on the basis of an already functioning legal framework, with relatively well-defined procedures, competent authorities and analysis criteria, thus providing a higher level of predictability, even if it involves additional costs and deadlines. In the absence of clear guidance on the guarantees regime provided for in the SAFE Regulation, FDI screening appears, at least at this stage, to be the main mechanism through which the compatibility of operators with the Union’s security requirements will be assessed.

In practice, the examination of an investment is not limited to formal verifications. Authorities may analyse the shareholding structure, the influence exerted by third-country entities, access to sensitive technologies or classified information, as well as the role of the operator in the project. Depending on these elements, conditions or mitigation measures may be imposed, aimed at reducing the identified risks.

The relevance of this mechanism is further reinforced by recent developments at national level. Through the amendments brought by G.E.O. no. 17/2026, the scope of investments that can be submitted to the examination of the Council for the Examination of Foreign Direct Investments in Romania (“CEISD”) has been significantly extended: investments that do not exceed the threshold of EUR 5,000,000 can also be analysed, if they are likely to affect projects or programs of interest to the European Union (such as SAFE). This exception is additional to the one already in place prior to the amendment, which may also be applicable in relation to SAFE: the threshold does not have to be exceeded if the targeted investments are likely to have an impact on national security or public order or pose risks thereto.

Projects carried out under SAFE fall into one of these categories, which means that participation in such procedures may directly trigger the need for an FDI screening, even in situations where the value thresholds would not normally be exceeded.

A prudent approach therefore implies initiating an FDI analysis at an early stage of projects, including in terms of the duration of the FDI screening procedure, possible conditionalities and the impact on the timing of the award and execution of contracts integrated into SAFE. In certain situations, the duration and conditionalities imposed following the FDI screening may become incompatible with the deadlines of the award procedures organised through SAFE, generating the risk of de facto exclusion of the operator, even if the other conditions imposed by the contracting authorities are met.

From the perspective of material eligibility, the SAFE Regulation operates on three levels:

1. location of infrastructure and resources,
2. limited possibility of using extra-EU resources; and
3. strict capping of non-European components.

Together, they turn the eligibility of economic operators into a matter of industrial architecture, not just formal compliance.

The SAFE Regulation therefore introduces strict requirements regarding the location of infrastructure and resources used in public procurement. Thus, according to art. 16 para. (8) of the SAFE Regulation, the infrastructure, facilities, assets and resources of contractors and subcontractors must be located on the territory of the European Union, the EEA-EFTA States or Ukraine.

This requirement goes beyond a simple formal eligibility condition and has direct implications for how operators organise their production and delivery capacities. In practice, it is not sufficient for the entity to be established in the Union/EEA-EFTA/Ukraine, if the production or essential elements of the performance of the contract are outsourced outside the eligible area.

Although the text allows, in certain situations, the use of infrastructure or resources located outside those territories — in the absence of available alternatives — this possibility remains conditional upon compliance with the security and defence interests of the Union, leaving significant discretion to Member States.

In the same logic, art. 16 para. (10) introduces a clear limitation on the origin of the components of the final product, establishing that the share of components from outside the Union, the EEA-EFTA States or Ukraine may not exceed 35 % of their estimated cost. Furthermore, the use of components originating from third countries that run counter to the security and defence interests of the Union and its Member States is prohibited.

This requirement is implicitly equivalent to an obligation to ensure at least 65% content from the “extended European area”. Again, this is not merely a technical rule, but an industrial policy instrument aimed at strengthening the Union’s technological and industrial defence base. For economic operators, the implications are significant. Companies that rely on global supply chains will need to reassess their supplier structure and identify, where possible, alternatives in the eligible space. In some cases, this may involve renegotiating existing contracts, developing new partnerships or relocating production capacities.

3. What economic operators should expect in the upcoming period

In addition to the European framework, economic operators must also consider how SAFE is implemented at national level. In Romania, G.E.O. no. 62/2025 introduces an important element within art. 4 para. (1): The Head of the Prime Minister’s Chancellery shall establish, by individual order, the cooperation requirements related to each project, in accordance with the provisions of the SAFE Instrument.

At this time, these requirements have not yet been published. However, given the logic of the instrument and previous practice, it is reasonable to expect them to cover issues such as carrying out manufacturing operations in Romania, using locally produced components, developing partnerships with Romanian operators, creating jobs or making investments at national level.

From this perspective, it is important to emphasize that SAFE also marks a change of approach compared to the previous regime. By G.E.O. no. 62/2025, purchases made under the SAFE Regulation are expressly exempted from the application of the technological and industrial cooperation mechanism provided for by G.E.O. no. 124/2023 (managed by ARCTIS), including from the obligations associated with it, such as bank guarantee, penalties or implementation deadlines. Instead of these standardised mechanisms, a more flexible system is introduced, based on requirements set on a case-by-case basis, depending on each project.

For economic operators, this change entails two important consequences. On the one hand, a relatively predictable framework, based on known rules and percentages, disappears. On the other hand, operators must bear in mind that these requirements will be part of the award documentation. It is therefore essential that they are carefully analysed and, where necessary, clarified at the stage of the procedure, through requests to contracting authorities. Thus, the lack of clarification may lead to the assumption of obligations that are difficult to assess from an economic or technical point of view.

At the same time, economic operators must also monitor developments at Union level in terms of controlled opening up to third countries. The SAFE Regulation provides that the Union may conclude bilateral or multilateral agreements, inter alia, with third countries with which the Union has a security and defence partnership in order to open up the eligibility conditions set out in the Regulation to those countries. The first concrete example is the agreement with Canada, approved at Member State level, by which it becomes a third country participating in the SAFE programme.

It is expected that this model will be extended to other states, especially those that already have security and defence partnerships with the European Union. Consequently, economic operators need to follow not only legislative developments, but also these cooperation initiatives, which may open or, on the contrary, limit economic operators’ access to SAFE projects.

At domestic level, Romania is expected to complete the following steps in the near future:

1. Establishment of the operational and cooperation requirements related to each project;
2. Submission of requests for tenders by contracting authorities;
3. Preparation of the analysis documents by the SAFE Interinstitutional Working Group;
4. Approval of the analysis documents by the Supreme Council of National Defence (CSAT);
5. Organization of procurement procedures by contracting authorities, according to the provisions of G.E.O. no. 62/2025 and the applicable legislation on the matter.

The urgency at national level stems from the fact that, under SAFE, Member States can only carry out procurement procedures on their own if they award the related contracts by the deadline of 30 May 2026. Thereafter, the SAFE Regulation requires Member States to organise joint procurement procedures involving multiple Member States. Therefore, Romania must complete all the above steps by 30 May 2026 for the purchases it aims to carry out without the participation of another Member State.

In this context, participation in projects financed through SAFE requires a proactive approach, in which legal analysis must be integrated as early as the structuring phase of consortia, supply chains and investments. For operators exposed to non‑EU control, early assessment of FDI implications and localization requirements becomes essential not only for eligibility, but for the commercial viability of the project itself.