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1. Priority shall be given to persons and entities from acceding countries, candidate countries, potential candidate countries and European Neighbourhood Policy countries. The participation in procurement, grant and prize award procedures for actions financed under the Instrument shall be open to international organisations as well as all legal entities that are nationals of and, in the case of legal persons, are also effectively established in the following countries or territories:

(a) Member States, beneficiaries under the Instrument for Pre-accession Assistance (IPA III) established by a Regulation of the European Parliament and of the Council establishing the Instrument for Pre-accession Assistance (IPA III), and Contracting Parties to the Agreement on the European Economic Area ;

(b) partner countries in the Neighbourhood area referred to in point (a) of Article 4(2) of Regulation (EU) 2021/947;

(c) developing countries and territories, as included in the list of Official Development Assistance recipients published by the Development Assistance Committee of the Organisation for Economic Cooperation and Development (the ‘list of Official Development Assistance recipients’), which are not members of the G20, and overseas countries and territories as defined in Council Decision 2013/755/EU ;

(d) developing countries, as included in the list of Official Development Assistance recipients, which are members of the G20, and other countries and territories, when the relevant procedure takes place in the context of an action financed by the Union under this Regulation in which they participate;

(e) countries for which reciprocal access to external funding is established by the Commission;

(f) member countries of the Organisation for Economic Cooperation and Development, in the case of contracts implemented in a least developed country or a highly indebted poor country, as included in the list of Official Development Assistance recipients;

(g) third countries where the activities take place as provided for in the specific multiannual indicative programmes, action plans or measures. The reciprocal access referred to in point (e) of the first subparagraph may be granted, for a limited period of at least one year, whenever a country acknowledges eligibility on equal terms to entities from the Union and from countries eligible under this Regulation. The Commission shall decide on the reciprocal access and on its duration after consultation of the recipient country or countries concerned.

2. All supplies and materials financed under the Instrument may originate from the countries and under the respective conditions specified in paragraph 1.

3. The rules laid down in this Article shall not apply to and shall not create nationality-related restrictions for natural persons employed or otherwise legally contracted by an eligible contractor or, where applicable, subcontractor.

4. For actions jointly co-financed by an entity or implemented under direct management or indirect management with entities listed in points (c)(ii)–(viii) of Article 62(1) of the Financial Regulation, the eligibility rules of those entities shall also apply.

5. Where donors provide financing to a trust fund established by the Commission or through external assigned revenues, the eligibility rules in the constitutive act of that trust fund or in the agreement with the donor in the case of external assigned revenues shall apply.

6. In the case of actions financed under the Instrument and under another Union programme, eligible entities under any of those programmes shall be considered eligible.

7. The eligibility rules in this Article may be restricted with regard to the nationality, geographical location or nature of applicants, or origins of supplies and materials, where such restrictions are required on account of the specific nature and the objectives of the action and where they are necessary for its effective implementation.

8. Tenderers, applicants and candidates from non-eligible countries may be accepted as eligible in the case of urgency or the unavailability of services in the markets of the countries or territories concerned, or in other duly substantiated cases where application of the eligibility rules would make the realisation of an action impossible or exceedingly difficult.

9. In order to promote local capacities, markets and purchases, priority shall be given to local and regional contractors in cases where the Financial Regulation provides for an award on the basis of a single tender. In all other cases, the participation of local and regional contractors shall be promoted in accordance with the relevant provisions of the Financial Regulation.