SAFE money is moving. Suppliers will have to prove where 65 per cent of the cost comes from.

On 6 October 2026 the Commission paid Belgium €1.2 billion and Czechia €309 million under SAFE, the EU’s €150 billion defence loan instrument. It has now allocated almost €13.5 billion in pre-financing to eleven member states. Each first payment is 15 per cent of the loan, and further payments follow as agreed milestones are met.

That moves SAFE from signature to delivery. Single-country contracts had to be signed by 30 May 2026; procurement by two or more countries together continues. Contracting authorities will have to show that what they buy meets the scheme’s rules, and they will ask their suppliers to show it first.

What the rules require

Regulation (EU) 2025/1106 sets eligibility conditions that sit with the contractors, not only with the buying state.

1. Component origin. At least 65 per cent of the estimated cost of components must originate in the EU, the EEA-EFTA states or Ukraine. No more than 35 per cent may come from elsewhere, and components from countries considered contrary to EU security and defence interests are excluded altogether.
2. Establishment and control. Contractors and the subcontractors involved must be established, with executive management, in the EU, the EEA-EFTA states or Ukraine. A business controlled from a third country can take part only with mitigation, such as foreign investment screening, or binding guarantees.
3. Design authority. For certain products the contractor must be able to define and change the design without restriction from a third country, including the right to replace restricted components.

Where the UK stands

Talks for the UK to join SAFE broke down on 28 November 2025, with cost the main obstacle; the initial fee was estimated at more than €6 billion. Canada’s participation agreement was concluded in June 2026. The UK has no equivalent arrangement.

For an EU prime, a component made in Britain therefore counts against the 35 per cent allowance, alongside US and other non-EU content. British suppliers in those programmes are competing for a capped share of the bill of materials, and primes will ask them to state their content precisely.

Who is exposed

• Prime contractors bidding into joint procurements funded by SAFE loans.
• Tier one and tier two suppliers asked for origin and cost declarations they have not produced before.
• UK, US and other non-EU suppliers whose content now sits inside the 35 per cent.
• Investors and lenders backing capacity built on SAFE demand.

What to check now

• Cost the bill of materials by origin at component level, on the same cost basis your customer will use.
• Identify every input from an excluded or doubtful source, and the alternative if it has to be replaced.
• Test the ownership and control of each key subcontractor, not only its address.
• Check whether another country’s export controls restrict your right to change the design.
• Agree the form of evidence the contracting authority will accept before the bid, not after award.

See our pages on export controls and defence and aerospace.

Meridian is offering this review as a fixed-fee service

Joint procurements are being prepared now, and eligibility evidence is far easier to assemble before a bid than to defend after award. We have opened a fixed-scope review that can start this week.

SAFE Eligibility Evidence Review · one product or system · 15 working days · £18,500 fixed, plus VAT. It covers the establishment and control of the prime and key subcontractors, component cost by origin against the 65 per cent rule, excluded-source inputs and the design authority position, delivered as a graded evidence file for the contracting authority, your customer or your counsel.

Send the product, the procurement and the bill of materials you hold, and we confirm scope the same working day. This is a review, not a legal opinion: eligibility is decided by the contracting authority, and any gap we find is reported as a finding in the file.

Bidding into a SAFE procurement? Start a review → or speak to us first.