Omnibus V — Defense Readiness: Simplification of EU Rules on Defense Procurement, Permitting and Intra-EU Transfers

On 9 October 2026, the Council of the European Union (the Council) formally approved the “Omnibus V” defense simplification package. This followed the political agreement reached with the European Parliament (Parliament) in June 2026 and Parliament’s first-reading position of 16 September 2026. For defense companies operating in the European Union (EU), the package will result in important changes to EU rules on defense procurement, permitting and intra-EU transfers, including: 

• higher thresholds to fall within scope of the EU Defence and Security Procurement Directive (up to EUR 2 million for supply and service contracts and EUR 10 million for works contracts); 
• faster permitting for defense readiness projects such as munitions plants, testing facilities and factory expansions; and 
• General Transfer Licences for moving defense equipment between certified suppliers, under EU-funded defense programmes, and within structured intra-EU industrial partnerships — reshaping how cross-border contracts and supply chains are structured. 

The package comprises three new legislative acts: two Regulations and one Directive. Following the Council’s final approval[RC1] , the legislative phase is complete, and the Regulations will take effect next month with direct EU-wide application, while the Directive triggers the national transposition period for procurement and transfer rules.

In our previous blog post, we explored the antitrust and state aid considerations arising from the European Commission (Commission)’s proposal for the Defence Readiness Omnibus. These antitrust and state aid proposals were not covered in the Omnibus V legislative package; we cover where they currently stand further below.

Context

The Omnibus V package is the legislative pillar of the EU’s Rearm/Readiness 2030 agenda (see our previous blog post here). It aims to eliminate administrative drag, compress timelines and create the legal framework needed to scale defense manufacturing across Europe — forging, in the Commission’s words, a “Pax Europaea for the 21st century.” 

The package comprises: (i) an amending Directive on transfers and defense procurement, (ii) a new Regulation on fast-track permitting and (iii) an amending Regulation on defense readiness and investments. We explore each of these below.

1. Defense procurement and intra-EU transfers of defense equipment

First, a newly adopted Directive amends both Intra-EU Transfers Directive (2009/43/EC) (Intra-EU Transfers Directive), which regulates cross-border movement of military equipment) and the Defence and Security Procurement Directive (2009/81/EC) (Defence and Security Procurement Directive), which sets the rules for awarding defense and security contracts. 

Some of the key amendments include:

• Higher procurement thresholds: The financial threshold above which contracts fall within the scope of the Defence and Security Procurement Directive has been raised from EUR 432,000 to EUR 2 million for supply and service contracts, and from EUR 5.404 million to EUR 10 million for works contracts. A EUR 1.5 million ammunition contract, for example, now falls outside of the Defence and Security Procurement Directive’s scope and may be awarded under national rules.
• New General Transfer Licences: The existing certified-supplier/recipient licence under the Intra-EU Transfers Directive is reinforced so it covers at least the same products as the EU, NATO or intergovernmental licence; and two new licences are created: (i) for European Defence Fund or EU programme-funded transfers, and (ii) for structured intra-EU industrial partnerships. This replaces case-by-case national permits with a pre-approved framework for moving defense components across EU borders.
• Cross-border joint procurement: Cross-border joint procurement was already possible under the Defence and Security Directive, including through a ‘lead nation’ central purchasing body. It relied on Article 10 and the non-binding 2019 Commission guidance. New Articles 10a and 10b make this binding and add detail. They prevent Member States from blocking the use of central purchasing bodies in other Member States. They require joint purchasers to agree responsibilities and applicable national law, and to record this in the procurement documents. They also deem participants compliant when they buy from the responsible authority. These reforms build on the momentum of other recent initiatives to promote more cross-border joint procurement — including the UK, Finland, Poland and the Netherlands’ proposals for a joint defense financing mechanism (see our previous blog here).
• Accelerated tendering and flexible purchasing: The package introduces dedicated rules for Dynamic Purchasing Systems (Article 29a) for fast, recurring electronic purchases of defense goods and Innovation Partnerships (Article 27a) to co-develop innovative tech from R&D to procurement. It also shortens the minimum bidding window from 40 days to 37 days (Article 33). This helps speed up contract awards for critical defense equipment.
• A temporary “reporting holiday” to cut red tape: Member States’ annual procurement statistical reporting obligations to the European Commission are suspended until 31 December 2030 to free up administrative resources for defense ramp-up.

Importantly, the amendments to the Defence and Security Procurement Directive described above are separate from the Commission's ongoing review of that Directive, which is expected to be finalised by the end of 2026.

2. Acceleration of permit-granting procedures

A new, standalone EU Permit-Granting Regulation creates a fast-track pathway for “defense readiness projects,” such as munitions plants, testing facilities, and factory expansions. Each Member State must designate a Single Point of Contact (SPOC) to coordinate all environmental, safety, and planning approvals and notify final approval. The process is capped at 42 working days (extendable to a maximum of 102 working days in complex cases) and introduces the principle of tacit approval, meaning permits are deemed automatically granted if authorities fail to meet the deadline. Unlike the Commission’s original proposal for blanket automatic approvals, the final text allows Member States to derogate from tacit approval and issue a formal written decision if a project poses a serious risk to human health or national security.

3. Defense readiness

The amending Regulation on defense readiness and investment conditions directly amends five existing EU laws (most notably the REACH Regulation (EC) No 1907/2006 on chemicals and the European Defence Fund Regulation (EU) 2021/697). It aims to remove environmental supply-chain bottlenecks and support investment in the European defencs technological and industrial base (EDTIB).

Key changes include:

• Targeted chemical exemptions: Article 2 of REACH is amended to allow Member States to exempt chemical substances where necessary for defense, with corresponding adaptions to other biological and environmental EU rules.
• Protecting defense intellectual property rights (IPR) and bolstering SME incentives: The Regulation caps the repayment clawback for non-EU technology transfers to three years after final project payment, while restricting IPR ownership claims of Member States co-financing EDF projects. In parallel, the Regulation increases the proposed funding bonus for SME participation in EDF projects.
• Streamlining EDF management: Multi-annual work programmes (Article 24), more flexible indirect management and simplified SME application procedures make EU co-financing easier to access.
• Supporting cooperation with Ukraine: Strategic industrial partnerships will become more integrated by explicitly making costs for defense testing activities carried out in Ukraine eligible for funding under the EDF.

Antitrust and State aid

Alongside this legislative package, the Commission’s original Defence Readiness Omnibus set out a parallel, non-legislative agenda for antitrust and State aid, explored in more detail in our Roadmap for EU Defence Consolidation blog (see here). These commitments do not change the legal framework but signal a Commission supportive of certain defense sector consolidation and cooperation.

• Draft Merger Guidelines: the Commission’s draft Merger Guidelines commit to weighing the changed security environment and the benefits of enhanced EU defense and security. The draft Guidelines also for the first time explicitly recognise EU Defence Readiness as part of the competitive assessment. The Commission is expected to finalise its Guidelines by the end of 2026 or the start of 2027.
• Antitrust: the Commission has signalled it is willing to provide guidance to parties on defense-sector cooperation needed to scale up production, weighing efficiencies and readiness benefits.
• State aid: the Commission stated in its Defence Readiness Omnibus that it will prioritise defense-readiness State aid casesand also highlighted that certain aid for defense production capacity may be exempted under the Article 346 TFEU “essential security interests” exemption (though EU courts require narrow, case-by-case application of this exemptions).

Outlook

A theme across all three of the Omnibus V acts is the balance struck between defense single-market integration and national sovereignty. While fully endorsing the Commission’s deregulatory aim, the Parliament and the Council were careful to recognise through targeted opt-out provisions the Member States’ authority over their national security interests under Article 346 TFEU and Article 4(2) TEU. 

For European defense businesses, the focus now turns from the legislative process to operational implementation. The practical value of Omnibus V will depend on how quickly, and to what extent, its reforms can be translated into commercial advantage. Companies that have already mapped these reforms against their procurement, supply chain and investment strategies with the new rules now will be best placed to capture the benefits as the Regulations enter into force and Member States transpose the Directive. 

Importantly, these reforms are only one part of a wider process of change: the Commission's separate review of the Defence and Security Procurement Directive, due to conclude by the end of 2026, is expected to bring further reform, which may include reforms on participation restrictions (such as a ‘Buy European’ requirement) and the ‘defence exemption’ under Article 346 TFEU. For defence companies active in Europe, it will be critical to prepare for and navigate both the immediate changes — including to procurement thresholds, transfer licensing and permitting — as well as this further wave of reform to the Defence and Security Procurement Directive.