Ukraine Support Loan: the 35 % rule on component origin
The Ukraine Support Loan, Regulation (EU) 2026/467, makes up to EUR 90 billion available to Ukraine until 31 December 2027 (Regulation (EU) 2026/467 (Ukraine Support Loan), Article 4(1) and (2)1. The Ukraine Support Loan shall be for a maximum amount of EUR 90 000 000 000. That amount shall be made available to Ukraine in accordance with Ukraine’s financing needs, as provided for in the Ukrainian Financing Strategy approved in accordance with Article 8.
2. The Ukraine Support Loan shall be available until 31 December 2027. It shall be made available by the Commission in instalments, which may be disbursed to Ukraine in one or more tranches. The disbursement of all such tranches shall take place by 31 December 2028.). The defence products it pays for must be produced under the conditions of Article 13(4), one of them a 35 % cap on components from outside Europe, which leaves at least 65 % of component cost to the European set.
- Who it covers
- Manufacturers and subcontractors involved in producing the defence products. They must be established in the Union, an EEA EFTA State or Ukraine, have their executive management structures there, and not be controlled from any other country (Regulation (EU) 2026/467 (Ukraine Support Loan), Article 13(4)(a)(a) manufacturers and subcontractors involved in the production of the defence products shall be established and have their executive management structures in the Union, in an EEA EFTA State or in Ukraine. They shall not be subject to control by a third country which is not an EEA EFTA State or Ukraine or by another third-country entity which is not established in the Union, in an EEA EFTA State or in Ukraine;).
- The limit
- The cost of components from outside the European set may be at most 35 % of the estimated cost of the components of the defence product (Regulation (EU) 2026/467 (Ukraine Support Loan), Article 13(4)(g)(g) the cost of components originating outside the Union, EEA EFTA States and Ukraine shall not be higher than 35 % of the estimated cost of the components of the defence product. No component shall be sourced from a third country that contravenes the security and defence interests of the Union and its Member States;). For an urgent need, the Commission can set the conditions aside by implementing act, if no equivalent product that meets them is available in time, or if delivery is significantly faster (Regulation (EU) 2026/467 (Ukraine Support Loan), Article 13(5)5. By way of derogation from paragraphs 2 and 4 and in full respect of paragraph 3, where there is an urgent need for the delivery of a given defence product stemming from Russia’s war of aggression against Ukraine, the procurement of a defence product which does not comply with one or more of the conditions set out in paragraphs 2 and 4 shall be eligible for financial assistance under this Chapter provided that: (a) there is no equivalent product that responds to that urgent need which complies with the conditions set out in paragraphs 2 and 4 or it is not available at the required scale and whose delivery lead time is commensurate with the urgency of the situation and Ukraine’s immediate operational needs; or (b) the delivery lead time for such defence product is significantly shorter than for a defence product which would comply with the conditions set out in paragraphs 2 and 4 of this Article, even if that defence product was subject to a priority-rated request as referred to in Article 19. In such a case, Ukraine shall provide the information reasonably available to it demonstrating that the conditions for the application of this derogation are met. That information shall be checked by the Commission after consultation with the Expert Group referred to in Article 15 without undue delay. The procurement of defence products from manufacturers established in third countries other than EEA EFTA States and Ukraine shall be made only where there are no other alternatives available in the Union, EEA EFTA States and Ukraine under the conditions set out in the first subparagraph, points (a) and (b). In the context of the first subparagraph, points (a) and (b), that information shall include a legal commitment on compliance with the delivery lead time. The Commission shall approve the derogations referred to in this paragraph by means of implementing acts, acting in accordance with the examination procedure referred to in Article 27(3).).
- European under the loan
- Components originating in the Union, an EEA EFTA State or Ukraine count as European; all others count against the 35 % (Regulation (EU) 2026/467 (Ukraine Support Loan), Article 13(4)(g)(g) the cost of components originating outside the Union, EEA EFTA States and Ukraine shall not be higher than 35 % of the estimated cost of the components of the defence product. No component shall be sourced from a third country that contravenes the security and defence interests of the Union and its Member States;).
- Evidence
- Ukraine draws up a product schedule for each activity, with a description of the product and information on how it meets Article 13 (Regulation (EU) 2026/467 (Ukraine Support Loan), Article 14(1)1. In respect of the approved amounts of assistance to support Ukraine’s defence industrial capacities as referred to in Article 8(2), point (a)(iii), Ukraine shall draw up a schedule for each activity, expenditure or measure related to a defence product or other product for defence purposes for which it intends to request assistance. That schedule shall set out: (a) a description of the defence product or other product for defence purposes; and (b) information on compliance with Article 13.). A manufacturer established in the Union but controlled from a third country takes part after screening under Regulation (EU) 2019/452, or with guarantees verified by the Member State where it is established (Regulation (EU) 2026/467 (Ukraine Support Loan), Article 13(4)(c)(c) by way of derogation from point (a) of this paragraph, defence products involving manufacturers or subcontractors established in the Union and controlled by another third country which is not an EEA EFTA State or Ukraine or by another third-country entity which is not established in the Union, in an EEA EFTA State or in Ukraine shall be eligible if that manufacturer or subcontractor has been subject to screening within the meaning of Regulation (EU) 2019/452 of the European Parliament and of the Council (25) and, where necessary, to appropriate mitigation measures, or if that manufacturer or subcontractor provides guarantees in accordance with point (d) of this paragraph, verified by the Member State in which it is established;).
Based on the official text of Regulation (EU) 2026/467, checked 12 October 2026. Not legal advice. Not yet expert reviewed.
Every condition of the loan with its article text: the Ukraine Support Loan on the Rules page.