As Union ace pilot, Graham Aker, had vowed before the grave of his subordinate, Howard Mason, that he would defeat the Celestial Being's Gundam using a SVMS-01 Union Flag-type unit, he refused to be one of the pilots for the 30 GNX-603T GN-Xs provided by a traitor of the Celestial Being. Subsequently, at Graham's request, Billy Katagiri, created the makeshift Union Flag Custom II (aka GN Flag) by installing the SVMS-01E Graham's Union Flag Custom (Over Flags' Ver.) (aka Custom Flag) with a GN Drive Tau taken from the GN-X unit 21, the machine meant for Graham. This GN Drive Tau was also known as GN Drive Tau unit 21, and Billy acquired it through the influence of his uncle, Homer Katagiri.

A major factor in the successful conversion of the Custom Flag into the GN Drive Tau-equipped GN Flag was the knowledge the Union had gained from the analysis of the remains of the destroyed right arm of the GNW-001 Gundam Throne Eins and the associated GN Beam Rifle. During an earlier battle, Graham's Custom Flag had severed the Throne Eins' right arm, but the arm and the rifle it held exploded soon after.