Participation in restricted calls under art. 12.5/12.6

For certain call topics under the Digital Europe Programme the participation of legal entities controlled from non-EU country can be restricted according to art. 12.5 and 12.6 of the Digital Europe Regulation. This is also the case for legal entities established in the territory of an eligible country but controlled by a third country or by a third country legal entity. EEA EFTA countries (Iceland, Liechtenstein and Norway) are fully associated to the Digital Europe Programme and benefit from a status similar to that of the Member States. The specific requirements for the individual call topics are clearly marked in the respective call documents.

Restrictions can apply to call topics from the domains Cybersecurity, High-Performance Computing and AI, Data & Cloud.

(These restrictions are similar to article 22.5 in Horizon Europe – see our dedicated infosheet ‘Security Restrictions in Horizon Europe (art. 22.5) and Ownership Control’.)

What is article 12.5?

Article 12.5 establishes that, for security reasons, participation in certain call topics can be restricted. In these cases, only organisations established in EU Member States and controlled by EU Member States or their nationals are eligible to participate.

As a result, organisations established in associated countries, as well as organisations based in the EU but controlled from outside the EU, can be excluded from these topics.

This article applies to dedicated call topics in Strategic Objective 3 – Cybersecurity.

What is article 12.6?

Call topics that fall under the requirements of Article 12.6 may allow participation by organisations established in associated countries, as well as organisations based in the EU but controlled from outside the EU. However, these organisations must meet specific security requirements.

These requirements are designed to protect the security interests and include guarantees on the protection of essential security interests of the EU and its Member States, and of classified information. Article 12.6 applies to selected topics under Specific Objective 1 -  High-Performance Computing (HPC) and Specific Objective 2 -  AI Continent.

Ownership Control Assessment

The key aspect to be assessed under Article 12.5/12.6 is whether entities aiming to participate in a proposal that is flagged as restricted are controlled by non-eligible countries or their entities. Here's what you need to know:

What Does "Control" Mean?

Control is assessed based on several factors:

• Ownership of more than 50% of shares or voting rights
• Ability to exercise decisive influence over strategic decisions
• Appointment rights for key management positions
• Special rights that allow blocking of important decisions

When Is the Assessment Done?

The ownership and control assessment occurs at the following moments:

• Proposal Submission: You must complete an Ownership Control Declaration (OCD) template when submitting your proposal.
• Grant Agreement Preparation: The assessment is verified again before the grant agreement is signed.
• During Project Implementation: If ownership or control changes during the project, you must notify the European Commission immediately.

When is an Ownership Control Declaration (OCD) needed?

An Ownership Control Declaration (OCD) is only mandatory if the call topic explicitly mentions Article 12.5 or 12.6 of the Digital Europe Regulation or equivalent restrictions in other EU programmes. Calls subject to these articles are clearly flagged in the call conditions published on the Funding & Tenders Portal. Therefore, applicants must carefully review the call text to determine if an OCD is required.

Detailed information can be found in our infosheet on 'Ownership Control Declaration & Assessment'.

Additional possible restriction: protection of European digital infrastructures, communication and information systems

An additional restriction has been recently introduced to ensure the protection of European digital infrastructures, communication and information systems, and related supply chains. It is unrelated to article 22.5 and does not entail the obligation of an Ownership Control Declaration.

This restriction relates to call topics that were identified as topics addressing strategic assets and interest of the EU or its Member States. Only when this restriction is explicitly mentioned in the call text, applicants should avoid using suppliers that the EU has identified as high-risk, as well as technologies and services considered insecure. The current restriction applies only to Huawei and ZTE, based on EU 5G cybersecurity assessments, and does not apply to all non-EU companies.

Relevant Documents

• Guidance document EU Grants: Participant in EU calls with ownership and control restrictions

• Templates of the ownership control declaration can be found under the Reference documents on the Funding & Tenders Portal.