EU plans major shake-up of defense industry regulation

Negotiators from the EU Council and the European Parliament have reached a provisional agreement on a package of measures designed to strengthen Europe's defense industry and improve military readiness by cutting red tape and accelerating investment.

The legislation aims to simplify defense procurement, speed up permit approvals, facilitate cross-border transfers of defense-related products and make it easier for companies to access EU defense funding, according to a statement by the EU Council.

The agreement streamlines procedures under the European Defense Fund (EDF), reducing administrative requirements for applicants while increasing support for small and medium-sized enterprises (SMEs).

Lawmakers also agreed to raise funding incentives for projects involving SMEs and to preserve access rights for member states that co-finance EDF projects, while protecting companies' intellectual property.

A key element of the package is a harmonized permit-granting framework for defense readiness projects.

Under the agreement, authorities will generally have a maximum of 102 working days to process permits. Applications could be automatically approved if no decision is issued within the deadline, although member states may apply exceptions in cases involving serious risks to public health or national security.

The deal also seeks to reduce delays in defense procurement and intra-EU transfers of military equipment. It raises procurement thresholds to lessen administrative burdens and introduces new flexibility for joint procurement and framework agreements.

Besides, two new mandatory general transfer licenses will be created to facilitate transfers between certified defense suppliers and recipients, as well as within industrial partnerships across the EU.

The provisional agreement must still be formally approved by both the Council and the European Parliament before becoming law.