"35% Third-Country Component Limit" Lifted Upon Agreement
However, Stringent Conditions Such as Financial Contributions Required for Participation
South Korea is actively seeking ways to participate in the European Union (EU)'s joint weapons procurement program, which is valued at 150 billion euros (approximately 245 trillion won).
According to the EU on September 13, the South Korean government recently submitted an official letter of intent to the European Commission, expressing its desire to join the joint weapons procurement program known as SAFE (Security Action For Europe).
SAFE is a system that provides low-interest loans to member states that jointly purchase weapons. It is a policy established by the European Commission to help EU member states finance their rearmament.
In principle, the proportion of components sourced from third countries in weapons purchased with these loans cannot exceed 35%. However, this restriction does not apply to countries like South Korea that have signed security and defense partnerships with the EU. For third countries that are candidates for EU membership, a separate bilateral agreement with the European Commission is required.
Since joint procurement by EU member states increases the likelihood that defense companies will benefit, it is interpreted that South Korea has also submitted its letter of intent to participate. The European Commission is expected to review South Korea's letter and then decide whether to begin negotiations for a bilateral agreement.
However, since the main goal of the SAFE program is to support Ukraine and the European defense industry, the requirements for concluding a bilateral agreement are strict. Even among third-country defense companies such as those from South Korea, only those with production facilities within Europe are eligible, and there are additional conditions such as financial contributions from the participating country. The European Commission has established these as safeguards.
Furthermore, for a third country to participate, it must form a "joint procurement team" with at least two countries from the EU, European Economic Area (EEA), European Free Trade Association (EFTA), or Ukraine. This has led to speculation about potential cooperation with Poland and Romania, which have already signed large-scale defense contracts and applied for EU SAFE loans.
According to the European Commission's recently announced loan allocation plan, Poland received the largest allocation at 43.734 billion euros (approximately 71 trillion won).
Among third countries that expressed their intention to participate before South Korea were the United Kingdom and Canada, and the European Commission is expected to soon begin negotiations for bilateral agreements with them as well.
Some analysts point out that Turkiye, a candidate for EU membership, also recently submitted a letter of intent to participate. However, given its adversarial relationship with EU member states Greece and Cyprus, its chances of participating are considered lower compared to South Korea, the United Kingdom, and Canada.
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