The Trail of the Money - How European Funding Ends Up in Surveillance and Military Technology

The European Union likes to present itself as a global leader in the regulation of artificial intelligence. With the AI Act, the Digital Services Act, new corporate due diligence requirements, and rules governing so called dual-use technologies, a dense network of regulations has emerged in recent years. Brussels frequently emphasizes that innovation must serve people and that fundamental rights must not be sacrificed for technological progress. Our reporting reached a different conclusion, because this is precisely where a contradiction begins that is becoming increasingly visible beyond Europe's borders. The rules often end at the external borders of the Union. The technology does not.

Our invastigation found that European funding, research grants, investments, and technology exports are reaching regions where oversight of their use nearly disappears. Countries in West Asia and North Africa are particularly affected.

One pathway runs through migration policy. The European Union increasingly links financial assistance to the control of migration and refugee movements. Agreements with countries such as Egypt, Morocco, Tunisia, and Lebanon have in recent years led to the deployment of biometric identification systems, intelligent border controls, surveillance technologies, and maritime monitoring systems. Funding is often routed through intermediaries, member states, or international organizations. This creates distance between political decisions made in Brussels and their consequences on the ground.

One example of this development is EURODAC, the European Union's central biometric database. Fingerprints and other identifying data from asylum seekers and certain migrants are stored there. Originally created to determine responsibility within the European asylum system, EURODAC has been expanded continuously over the years. Critics have long warned that the line between an administrative tool and a comprehensive surveillance infrastructure is increasingly blurring, resulting in deep intrusions into fundamental and human rights.

A second area concerns research and development. Through programs such as Horizon Europe and the European Defence Fund, money flows to companies whose technologies can later be used for military purposes. The investigation highlights several examples. The company Xtend received funding through European programs and was later contracted by the Israeli Ministry of Defense to supply thousands of attack drones. Our research found that more than €15 million flowed from the European Defence Fund to Intracom Defense, whose majority owner is Israel Aerospace Industries. Intracom Defense (IDE) develops, designs, and manufactures missile telemetry systems with high-speed data transmission capabilities. At the same time, the European Investment Fund invested through participation structures in funds that in turn financed companies such as Paragon Solutions. According to human rights organizations and investigative reporting, its spyware has been used against journalists, activists, and critics.

The third pathway is the most direct. European companies export facial recognition systems, biometric tools, drone technology, and so called smart city solutions to numerous countries in the region. In practice, the line between civilian and military use often disappears entirely. What is sold as an administrative tool can become an instrument of surveillance under authoritarian conditions. Systems designed for analysis or target identification become part of military decision-making in armed conflicts. In 2020, Frontex, the European Union's border protection agency, awarded contracts worth around €100 million to Israel Aerospace Industries and Elbit Systems for surveillance drones in the Mediterranean. Both companies later played a role in military operations in the Gaza Strip. This is not an information problem. The facts are on the table. The real problem is political in nature. Economic interests, institutional inertia, and the absence of binding oversight mechanisms appear to ensure that little changes.

The implications are clear: High-risk AI systems should not be freely exported outside Europe when they are subject to strict restrictions or bans within the EU. Human rights assessments should become mandatory for all exports of such technologies. Migration agreements should be subject to independent impact assessments before they are signed. In addition, the European Union must reassess its cooperation with military-linked institutions in the field of research.

In the end, one simple question remains. What responsibility does Europe bear for technologies it develops, finances, or exports when their consequences become visible thousands of miles away? As long as the answer disappears into the shadows of bureaucratic jurisdictions, the distance between Brussels and the people affected on the ground will remain vast. For those who must live with the consequences, this distance is not an everyday debate. It helps determine how much protection rights actually receive and how easily they can be lost.

Such investigations are demanding. They require time, resources, and often months of analyzing documents, funding programs, and corporate structures. Yet they remain indispensable to any open society. Awareness begins where connections become visible that would otherwise remain hidden. Only those who know how public funds are spent, which technologies are being funded, and what consequences may arise from them are truly able to form their own opinions, demand investigative documentation, and engage in informed resistance when fundamental rights, transparency, or public interests come under pressure. Transparency is not a privilege. It is a prerequisite for ensuring that citizens do not gradually surrender their rights without even realizing it.

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