Agreement between the European Union and Canada concerning participation under the SAFE Instrument
The SAFE Instrument is a €150 billion loan program managed by the European Commission to support and expedite defence procurement by EU Member States. It is one of several pillars that constitute the Readiness 2030 Plan, an €800 billion financial-industrial plan to support defence readiness across the European Union by 2030. The SAFE Instrument is intended to support the European defence industry through common-procurement projects.
Canada’s agreement with the EU to participate under the SAFE Instrument (the Agreement) provides Canadian firms with preferential access and treatment to defence procurements financed by the SAFE Instrument. In exchange, the Government of Canada will provide a financial contribution to support Ukraine’s defence industry that is commensurate with a portion of the value that Canadian firms derive from their contracts supported by the SAFE Instrument.
Key terms of the Agreement include:
- The Agreement allows Canadian content to comprise up to 80% of the total value of any procurement conducted under the SAFE Instrument, a significant increase from the previous 35% threshold for other third countries.
- Canada will provide an initial financial contribution of €10 million, of which €7.5 million will be treated as a downpayment and credited against Canada’s future participation fees.
- Canada will remit a participation fee equal to 15% of the total value of the Canadian content in any SAFE procurement where European content represents less than 65% of the total value of the contract.
- Under the SAFE regulatory framework, Canadian firms will receive treatment equivalent to that accorded to European companies, ensuring non-discriminatory access to SAFE-financed procurement opportunities.
- The Agreement recognizes established European and defence standards, including those established through NATO Standardization Agreements.
Practical information for Canadian businesses in the defence and security sector seeking resources on exporting abroad can be found on the website of the Canadian Trade Commissioner Service.
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