Ukraine ratifies agreement to join the European Defence Fund

On 16 September 2026, the Ukrainian Parliament adopted the law ratifying the Agreement with the European Union on the participation of Ukraine in the European Defence Fund (EDF). Once in force, eligible Ukrainian companies will be able to take part in EU-funded defence research and development projects under the rules applicable to the EDF, opening another route for the integration of Ukraine’s defence industry into the European technological and industrial base.

The Agreement was signed between Ukraine and the EU in Kyiv on 13 July 2026. Ukraine will take part in the EDF as an associated country across all activities supported by the Fund. 

What does the Agreement mean?

The Agreement has the following implications for eligible Ukrainian companies:

• Ukrainian legal entities will be able to take part in EDF-supported actions and access EU funding for defence research and development under the same regulatory framework that governs other eligible European entities.
   
• Ukraine must take the necessary measures to exempt goods and services purchased or imported in its territory and financed under relevant EDF grant agreements or contracts from customs duties, import duties and other fiscal charges, including VAT.
   
• EU classified information will be handled under the existing EU-Ukraine security agreements, while project-specific security requirements will be incorporated into the relevant grant documents.
   
• Ukrainian recipients of EU funding will be subject to reviews, monitoring, audits and anti-fraud controls by EU bodies, including the European Commission, European Court of Auditors and the European Anti-Fraud Office (OLAF).
   
• Decisions of the European Commission imposing pecuniary obligations on legal or natural persons and judgments of the Court of Justice of the EU are to be enforceable in Ukraine.

Although the Agreement should provide for annual Ukrainian financial contributions to the EDF, the accompanying Protocol suspends this payment obligation in line with the wider EU arrangement suspending the country’s financial contributions to EU programmes due to the extraordinary circumstances caused by the Russian invasion.

What is next?

Following the Agreement’s adoption by Parliament, the ratification law must be signed by the President and officially published. The Agreement will enter into force once Ukraine and the EU notify each other of the completion of their respective internal procedures. Once effective, the Agreement will apply from 
1 January 2026.

Ukrainian defence companies interested in EDF funding should start assessing potential eligibility, and the security and compliance requirements of involvement.

For more information on Ukraine’s participation in the EDF, contact your CMS client partner or the CMS experts who contributed to this article.