{"id":6264,"date":"2026-09-16T12:44:06","date_gmt":"2026-09-16T10:44:06","guid":{"rendered":"https:\/\/ak-law.pl\/blog\/safe-how-can-businesses-benefit-from-it\/"},"modified":"2026-09-17T20:06:21","modified_gmt":"2026-09-17T18:06:21","slug":"safe-how-can-businesses-benefit-from-it","status":"publish","type":"post","link":"https:\/\/ak-law.pl\/en\/blog\/safe-how-can-businesses-benefit-from-it\/","title":{"rendered":"SAFE \u2013 how can businesses benefit from it?"},"content":{"rendered":"\n

SAFE (Security Action for Europe) is associated above all with large numbers. We have already written about this instrument on our blog in the article \u201cSAFE \u2013 what does it mean for companies in the defence sector?<\/a>\u201d, when the fate of the draft FIZB Act<\/a> was still being decided. <\/p>\n\n

Poland has secured access to EUR 43.7 billion in financing, while between 28 and 30 May 2026 alone, the Armament Agency and the Cyberspace Defence Forces Component Command concluded 62 contracts worth approximately PLN 120 billion. The orders concern, among other things, artillery systems, drones, air defence, soldier equipment, communications, electronic reconnaissance and cybersecurity. <\/p>\n\n

From a business perspective, however, a more important question than the overall value of the instrument is how an enterprise producing components, developing technology or software, or providing other solutions for the defence sector can participate in contracts financed under SAFE. <\/p>\n\n

SAFE does not operate like a conventional grant scheme in which a business submits an application for funding. Instead, businesses may benefit from SAFE-financed contracts as direct contractors, participants in a consortium or suppliers or subcontractors to companies performing contracts for the armed forces.<\/p>\n\n

SAFE finances the Member State, not the business<\/strong><\/h2>\n\n

The SAFE instrument was established by Council Regulation (EU) 2025\/1106<\/a> (the SAFE Regulation). Financial assistance takes the form of a loan granted to a Member State, which submits to the European Commission an investment plan for the European defence industry. Financing is then made available in connection with the implementation of the activities set out in that plan. The maximum value of the instrument for all Member States is EUR 150 billion. <\/p>\n\n

In Poland, the SAFE loan is to be taken out by Bank Gospodarstwa Krajowego (BGK) on behalf of the Armed Forces Support Fund. Under Resolution No 96 of 13 March 2026<\/a>, the Minister of National Defence coordinates the performance of tasks arising from the Polish investment plan that qualify for financing. Before each subsequent tranche is released, the Ministry of National Defence submits a report to BGK, on the basis of which BGK provides the European Commission with the relevant documentation, while the Commission verifies compliance with the conditions of the SAFE Regulation. <\/p>\n\n

This structure shows that the application model familiar to businesses seeking EU funding \u2014 in which a company submits its own project and applies directly for the award of funds \u2014 does not apply here. The business opportunity arises when a particular product, technology or service is needed to perform a contract financed under SAFE. <\/p>\n\n

How can a business participate in a contract financed under SAFE?<\/strong><\/h2>\n\n

In practice, a business may participate in such a contract in several ways.<\/p>\n\n

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  1. The first possibility is to act as a direct contractor. The agreements already signed include both major defence industry companies and private technology businesses. In a June 2026 communication<\/a>, the Ministry of National Defence identified several dozen companies involved in the projects, operating in areas including electronics, optics, unmanned aerial vehicles, communications, space technologies, vehicles and IT systems. <\/li>\n\n\n\n
  2. A second route is through a consortium or another structure for the joint performance of a contract.<\/li>\n<\/ol>\n\n

    For many small and medium-sized businesses, however, the third possibility may be the most realistic: entering the supply chain of a larger contractor. A manufacturer of a complete system may require electronics, mechanical components, sensors, software, communications systems, materials, integration services, specialised manufacturing or cybersecurity solutions. SAFE contracts may therefore also involve businesses that have not previously been associated with the defence industry in the conventional sense. <\/p>\n\n

    Not every supplier participating in the supply chain is, however, an \u201cinvolved subcontractor\u201d within the meaning of the SAFE Regulation. Article 16(12) specifies that this refers to an entity that provides a critical input with unique characteristics essential to the functioning of the product, accounts for at least 15% of the contract value and requires access to classified information for the purpose of performing its part of the contract. The distinction matters because some of the SAFE requirements are specifically addressed to contractors and to subcontractors defined in this way. <\/p>\n\n

    Why were so many contracts signed at the end of May?<\/strong><\/h2>\n\n

    The dates of 28\u201330 May 2026, when 62 Polish SAFE contracts were concluded, were not accidental. As a rule, the SAFE Regulation provides financing for joint procurement. Joint procurement generally means a procurement procedure involving at least one Member State benefiting from SAFE and at least one other Member State, an EEA-EFTA state or Ukraine.<\/p>\n\n

    The SAFE Regulation nevertheless provided for a transitional arrangement. A procurement procedure conducted by a single Member State could qualify for SAFE financing if the contract had been signed by 30 May 2026. The Member State was also required to take measures aimed at extending the benefits arising from such a contract to at least one additional eligible state. <\/p>\n\n

    A business looking today at the list of 62 Polish contracts already concluded should not assume that future procurements will follow exactly the same model. For new contracts, the general structure of SAFE common procurement will become increasingly important. <\/p>\n\n

    Finding a contract is not enough. SAFE has its own eligibility conditions <\/strong><\/h2>\n\n

    The SAFE Regulation also uses public procurement to shape the European supply chain, which means that the source of financing is not neutral from the contractor\u2019s perspective. As a general rule, contractors and subcontractors covered by Article 16 of the SAFE Regulation must be established and have their executive management structures in the European Union, an EEA EFTA State or Ukraine. They must not be subject to control by another third country or by an entity from such a country. The SAFE Regulation provides for certain exceptions, including for entities that have been subject to the relevant foreign investment screening or provide verified guarantees safeguarding the security and defence interests of the EU and its Member States. <\/p>\n\n

    The location of the infrastructure, facilities, assets and resources used to perform the contract also matters. As a general rule, they must be located in the EU, an EEA EFTA State or Ukraine. The Regulation allows an exception where no readily available alternative exists, provided that the use of resources located elsewhere does not contravene the security and defence interests of the Union and its Member States. <\/p>\n\n

    For a business preparing to participate in such a contract, this means that its ownership structure, the location of its operations and the way in which production is organised may themselves be relevant.<\/p>\n\n

    The origin of components may be just as important as who the contractor is<\/strong><\/strong><\/h2>\n\n

    The cost of components originating outside the EU, EEA EFTA States and Ukraine may not exceed 35% of the estimated cost of the components of the end product. In addition, no component may be sourced from a third country that contravenes the security and defence interests of the Union and its Member States. Eligibility therefore does not end with verifying the main contractor. In certain cases, it is also necessary to examine the structure of the product and determine where its key components originate. <\/p>\n\n

    If a business supplies equipment incorporating components purchased outside Europe or uses technologies subject to licensing restrictions imposed by entities from countries that do not meet the eligibility requirements, the main contractor may require detailed information to establish whether the product as a whole complies with the SAFE requirements.<\/p>\n\n

    Advanced technologies also raise the issue of control over the design<\/strong><\/h2>\n\n

    For products falling within the second SAFE category, including air and missile defence systems, certain unmanned systems, C4ISTAR, space assets, artificial intelligence and electronic warfare, the SAFE Regulation imposes an additional requirement. <\/p>\n\n

    The contractor must be able to determine the definition, adaptation and evolution of the design of the product without restrictions imposed by third countries or entities from such countries. It must also have the legal authority to replace or remove components subject to such restrictions. This requirement is particularly important for intellectual property rights, licences and the structure of technology agreements. <\/p>\n\n

    A company may therefore possess technology that is attractive from the perspective of a defence procurement, while a licence to key intellectual property rights may contain limitations that restrict its ability to modify the product. The technology may be commercially ready for use, yet the terms of the licence or other agreements may still prevent compliance with the requirements concerning product modification under a particular SAFE contract. <\/p>\n\n

    What should a business check before approaching a contractor financed under SAFE?<\/strong><\/h2>\n\n

    A business seeking to enter the supply chain should first determine:<\/p>\n\n