Considerations on COM(2023)338 - Establishing the Ukraine Facility - Main contents
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| dossier | COM(2023)338 - Establishing the Ukraine Facility. |
|---|---|
| document | COM(2023)338  |
| date | February 29, 2024 |
| (2) | The European Council of 23 June 2022 decided to grant the status of candidate country to Ukraine, which expressed a strong will to link reconstruction with reforms on its European path. Ongoing strong support to Ukraine is a key priority for the Union and an appropriate response to the Union’s strong political commitment to support Ukraine for as long as necessary. |
| (3) | The provision by the Union of macro-financial assistance of up to EUR 18 billion for 2023 under Regulation (EU) 2022/2463 of the European Parliament and of the Council (3) was considered an appropriate response to Ukraine’s financing gap for 2023 and helped to mobilise significant financing from other donors and international financial institutions. This constituted a major contributing factor to Ukraine’s macroeconomic and financial resilience at a critical time. |
| (4) | The Union has also provided significant financial support through an additional package combining funds under the Neighbourhood, Development and International Cooperation Instrument – Global Europe (NDICI-Global Europe) established by Regulation (EU) 2021/947 of the European Parliament and of the Council (4) and loans by the EIB. In addition, continuous support is being provided by Member State authorities, communities, NGOs and volunteer groups. |
| (5) | In addition, the Council decided on off-budget assistance measures to support the Ukrainian armed forces under the European Peace Facility established by Council Decision (CFSP) 2021/509 (5), in the amount of EUR 6,1 billion, and, by Council Decision (CFSP) 2022/1968 (6), established a Military Assistance Mission in support of Ukraine with EUR 0,1 billion for the common costs. The Union and its Member States have also delivered an unprecedented in-kind emergency response via the Union Civil Protection Mechanism established by Decision No 1313/2013/EU of the European Parliament and of the Council (7), constituting the largest emergency operation since the creation of that mechanism. |
| (6) | Furthermore, the EU-Ukraine Solidarity Lanes established in May 2022 have contributed to generating an estimated export value of EUR 31 billion for the Ukrainian economy until the end of May 2023. |
| (7) | Russia’s war of aggression against Ukraine has caused damages in Ukraine amounting to more than EUR 270 billion as of 24 February 2023, and reconstruction costs estimated at EUR 384 billion, as well as a loss of access to financial markets and a significant drop in public revenue, while public expenditure to address the humanitarian situation and to maintain the continuity of public services has increased significantly. Those estimates, as well as the analytical information from all other appropriate and subsequent sources, provide a relevant basis to establish the respective funding needs for the coming years, including regional and sectoral considerations. |
| (8) | On 30 March 2023, the International Monetary Fund (IMF) estimated the state financing gap up to 2027 at EUR 75,1 billion and agreed with Ukraine a EUR 14,4 billion four-year programme to anchor policies that sustain fiscal, external, price and financial stability and support economic recovery, while enhancing governance and strengthening institutions to promote long-term growth in the context of post-war reconstruction and Ukraine’s path of accession to the Union. |
| (9) | In light of Russia’s war of aggression against Ukraine, a residual gap remains in Ukraine’s financing needs. Therefore, significant and flexible support to the Ukrainian government is needed for it to maintain its functions, provide public services, as well as to support the recovery, reconstruction and modernisation of the country. |
| (10) | Given the damage to the Ukrainian economy, society and infrastructure caused by Russia’s war of aggression, Ukraine will require significant support and institutional capacity to maintain its functions, as well as short-term relief and assistance for the fast recovery, reconstruction and modernisation of the country. Ukraine will require comprehensive support to ‘build back better’ through a people-centred recovery that creates the foundations for a free, culturally vibrant and prosperous country with a resilient economy that is well integrated into the European and global economy, anchored in Union values and progressing towards accession to the Union. |
| (11) | In this context, it is necessary to set up an exceptional medium-term single instrument that brings together the bilateral support provided by the Union to Ukraine, ensuring coordination and efficiency. To that end, it is necessary to establish a Ukraine Facility (the ‘Facility’) for the period 2024 to 2027, providing a balance between flexibility and programmability of the Union’s response to address Ukraine’s financing gap and recovery, reconstruction and modernisation needs, while at the same time supporting Ukraine’s reforms effort as part of its accession path to the Union. |
| (12) | Given the exceptional nature of the Facility, it is important that it is underpinned by a coherent and prioritised plan for the reconstruction of Ukraine (the ‘Ukraine Plan’), which should be prepared by the Government of Ukraine with due involvement of the Verkhovna Rada of Ukraine and representatives of civil society organisations, providing a structured and predictable framework for the recovery, reconstruction and modernisation of Ukraine clearly articulated with Union accession requirements. |
| (13) | Union support to Ukraine from 2024 to 2027 should be provided primarily and mainly under the Facility, avoiding any potential overlap with other programmes, in particular the Instrument for Pre-Accession assistance established by Regulation (EU) 2021/1529 of the European Parliament and of the Council (8), and ensuring a consistent approach through a unified instrument, by replacing or, where appropriate, complementing activities under the existing instruments. Support under the Facility does not prejudge future assistance to Ukraine and its possibility to participate in Union programmes under the post-2027 multiannual financial framework. |
| (14) | In this regard, Union support under the Facility should replace the bilateral support provided under NDICI-Global Europe. It is nevertheless important to ensure that Ukraine can continue to benefit from regional, thematic, rapid response, and other forms of support under NDICI-Global Europe, in particular cross-border cooperation programmes, and more generally continue to advance regional, macro-regional and cross-border cooperation and territorial development, including through the implementation of Union macro-regional strategies. |
| (15) | Humanitarian aid, defence and support to Member States providing protection for people fleeing the war in Ukraine should be adequately and consistently provided outside the Facility. Ukraine can continue to benefit from relevant existing Union programmes within the Union budget, such as NDICI-Global Europe for activities referred to in recital 14, the European Instrument for International Nuclear Safety Cooperation established by Council Regulation (Euratom) 2021/948 (9), humanitarian aid in accordance with Council Regulation (EC) No 1257/96 (10), and activities under the Common Foreign and Security Policy, as well as measures under the European Peace Facility outside the Union budget. Furthermore, Ukrainian entities can participate in internal policy programmes of the Union such as Horizon Europe established by Regulation (EU) 2021/695 of the European Parliament and of the Council (11), Research and Training Programme of the European Atomic Energy Community established by Council Regulation (Euratom) 2021/765 (12), Digital Europe Programme established by Regulation (EU) 2021/694 of the European Parliament and of the Council (13), ‘Fiscalis’ programme for cooperation in the field of taxation established by Regulation (EU) 2021/847 of the European Parliament and of the Council (14), Customs programme for cooperation in the field of Customs established by Regulation (EU) 2021/444 of the European Parliament and of the Council (15), Erasmus+ established by Regulation (EU) 2021/817 of the European Parliament and of the Council (16), EU4Health Programme established by Regulation (EU) 2021/522 of the European Parliament and of the Council (17), Creative Europe Programme established by Regulation (EU) 2021/818 of the European Parliament and of the Council (18), Programme for the Environment and Climate Action (LIFE) established by Regulation (EU) 2021/783 of the European Parliament and of the Council (19), Single Market Programme established by Regulation (EU) 2021/690 of the European Parliament and of the Council (20), Union Civil Protection Mechanism, Connecting Europe Facility established by Regulation (EU) 2021/1153 of the European Parliament and of the Council (21) and Union Anti-Fraud Programme established by Regulation (EU) 2021/785 of the European Parliament and of the Council (22) as well as other relevant programmes in accordance with their respective rules, objectives and the relevant association agreements. |
| (16) | The Facility should contribute to closing the funding gap of Ukraine until 2027 by providing non-repayable support and highly concessional loans in a predictable, continuous, orderly and timely manner. The support under the Facility should help maintain macro-financial stability in Ukraine and ease Ukraine’s external financing constraints. |
| (17) | It is important that investment in Ukraine’s sustainable recovery, reconstruction and modernisation under the Facility starts as a matter of urgency to help providing decent living conditions for the Ukrainian population and reconstructing critical infrastructure, where possible, to ensure generation of employment and revenues and to progressively lower the volume of international assistance needed, while mitigating environmental damage to the extent possible in a war-torn country and supporting Ukraine in the green transition. |
| (18) | The medium-term perspective provided by the Ukraine Plan through a single instrument should also encourage Ukraine to channel investments and reforms towards the transition to a green, sustainable, digital and inclusive economy, and help mobilise like-minded donors, including from the private sector, for multiannual contributions to support Ukraine. Investments should be aligned, to the extent possible, with the Union climate and environmental acquis, and be consistent with the implementation of Ukraine’s National Energy and Climate Plan. |
| (19) | The recovery, reconstruction and modernisation effort should build on Ukraine’s ownership, close cooperation and coordination with supporting countries and organisations, and Ukraine’s path towards accession to the Union. Ukraine’s local and regional administrations as well as Ukrainian civil society organisations are also expected to play an important role in this process by participating in its design and scrutiny. Peer-to-peer cooperation and programmes embedded in partnerships between cities and regions in the Union and those in Ukraine have already facilitated the delivery of humanitarian aid, and other forms of assistance, to Ukraine and thus provide a basis to enrich and accelerate the recovery, reconstruction and modernisation process. |
| (20) | The Union should also foster close consultation and association of local and regional authorities, which embrace a large variety of sub-national levels and branches of government, including regions, municipalities, rayons and hromadas and their associations, as well as close consultation and participation of Ukrainian civil society organisations. The Union should encourage their meaningful participation in the recovery, reconstruction and modernisation of Ukraine, based on sustainable development and through the implementation of the Sustainable Development Goals at local and regional level. The Union should recognise and support the multiple roles played by the local and regional authorities as promoters of an inclusive territorial approach to local development, including decentralisation processes, participation of civil society organisations and local communities, transparency and accountability, and should further enhance its support for local and regional authorities’ capacity building, including for the implementation of projects under the Facility, in line with the principle of local self-government as defined in the European Charter of Local Self-Government, to which Ukraine is a Party. |
| (21) | The Union should provide support to the transition towards accession for the benefit of Ukraine, drawing on the experience of the Member States. That support should focus particularly on the sharing of experience that was acquired by the Member States during their own reform processes. |
| (22) | Support under the Facility should also build on and maximise synergies with key organisations supporting Ukraine’s reforms and reconstruction, such as the EIB Group, international financial institutions including the World Bank, the Organisation for Economic Co-operation and Development, and the IMF; and European multilateral financial institutions, including the EBRD and the Council of Europe Development Bank; and bilateral financial institutions such as development banks and export credit agencies. |
| (23) | Given the uncertainties linked to the war, it is appropriate that the Facility should be able to provide support to Ukraine in duly justified exceptional circumstances, in particular in the event of a significant deterioration of the war, and in order to maintain its macro-financial stability and to ensure the achievement of the objectives of the Facility. Such exceptional financing should be provided for individual periods of up to three months and should be provided only through a Council implementing decision upon a proposal from the Commission, if it is concluded that it is impossible for Ukraine to fulfil the conditions attached to the forms of support under the Facility, when it is the beneficiary of the support, and should cease as soon as the fulfilment of those conditions becomes possible again. Such exceptional financing should not affect funding from other specific Union instruments which should be mobilised in cases of natural disasters or other humanitarian or civil protection emergencies. If necessary, exceptional financing could be available under the Facility before the adoption of the Ukraine Plan and the conclusion of the Framework Agreement. It could be additional to exceptional bridge financing, as applicable. |
| (24) | The enlargement policy framework defined by the European Council and the Council, the Association Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and Ukraine, of the other part (23) (the ‘Association Agreement’), including a Deep and Comprehensive Free Trade Area, multilateral agreements to which the Union is a party and other agreements that establish a legally-binding relationship with Ukraine, as well as resolutions of the European Parliament, communications of the Commission and joint communications of the Commission and the High Representative of the Union for Foreign Affairs and Security Policy should constitute the overall policy framework for the implementation of this Regulation. The Commission should ensure coherence between support under the Facility and the enlargement policy framework. |
| (25) | Article 49 of the Treaty on European Union (TEU) provides that any European State which respects the values of respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights, including the rights of persons belonging to minorities, and is committed to promoting those values, may apply to become a member of the Union. Those values are common to the Member States in a society in which inclusiveness, pluralism, non-discrimination, tolerance, justice, solidarity and gender equality prevail. |
| (26) | A European State which has applied to join the Union can become a member of the Union only where it has been confirmed that it fully meets the accession criteria established at the Copenhagen European Council in June 1993 (the ‘Copenhagen criteria’) and provided that the Union has the capacity to integrate the new member. The Copenhagen criteria relate to the stability of institutions which guarantee democracy, the rule of law, human rights and respect for and protection of minorities, the existence of a functioning market economy as well as the capacity to cope with competitive pressure and market forces within the Union, and the ability to assume not only the rights but also the obligations under the Treaties, including the pursuit of the aims of political, economic and monetary union. |
| (27) | It is in the common interests of the Union and Ukraine to advance the efforts of Ukraine to reform its political, legal and economic systems with a view to Union membership. Granting the status of candidate country to Ukraine is a geostrategic investment of the Union in peace, security, stability and prosperity in Europe and allows the Union to be better positioned to address global challenges. It also provides increased economic and trade opportunities for the mutual benefit of the Union and Ukraine, while supporting a gradual transformation of the country. The prospect of Union membership has a powerful transformative effect, embedding positive democratic, political, economic and societal change. |
| (28) | Embracing and committing to core Union values is a choice and is essential for Ukraine’s aspiration to Union membership. In line with this, it is important that Ukraine takes ownership and fully commits to Union values as well as to upholding a global order based on rules and values and vigorously pursues the necessary reforms in the interests of its people. |
| (29) | Reconstruction from the damage caused by Russia’s war of aggression cannot be limited to restoring what was destroyed as it was before the war. Reconstruction offers an opportunity to support Ukraine in its process of integration into the internal market and in accelerating its sustainable green and digital transitions, in line with Union policies while fostering economic integration with the Union and promoting socio-economic development and cross-border cooperation. The Facility should therefore promote reconstruction in a way that modernises and improves Ukraine’s economy, building on Union rules and standards, investing in the transition of Ukraine towards a sustainable green, digital and inclusive economy, thereby benefitting society as a whole, with particular attention to the needs of vulnerable groups. Reconstruction of cultural heritage should be based on national, international and European practices, on standard-setting texts, principles, such as New European Bauhaus, and lessons learned, and be consistent with the European quality principles for Union-funded interventions which have a potential impact on cultural heritage. Particular attention should be paid to ensuring the sustainability of and adequate protection for activities financed under the Facility in light of cybersecurity risks and the overall threat landscape. |
| (30) | In line with the need to support the recovery and reconstruction of Ukraine in a sustainable and future-proof way, the Facility should not support activities or measures which promote investments in fossil fuels, or that do not respect the principle of ‘do no significant harm’, including to biodiversity or the climate, unless such activities or measures are strictly necessary to achieve the objectives of the Facility to the extent possible in a war-torn country. Such activities or measures would concern for example the continuation of economic activities or addressing urgent recovery and reconstruction needs. They should take into account the need to rebuild and modernise infrastructure and rehabilitate natural environment damaged by the war in a resilient way. They should be accompanied, where relevant, by appropriate measures to avoid, prevent or reduce and, if possible, offset any harmful effects. |
| (31) | The Facility should contribute to adherence to the United Nations Framework Convention on Climate Change (24) and the Paris Agreement adopted under that Convention (25) (the ‘Paris Agreement’), the United Nations Convention on Biological Diversity (26) and the United Nations Convention to combat desertification in those countries experiencing serious drought and/or desertification, particularly in Africa (27), and should not contribute to environmental degradation or cause harm to the environment or climate. In particular, funding allocated in the context of the Facility should be consistent with the long-term goal of holding the increase in the global average temperature to well below 2 °C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1,5 °C above pre-industrial levels. It should also be consistent with the objective to increase the ability to adapt to the adverse effects of climate change and foster climate resilience, and with the support of biodiversity conservation, the circular economy and zero-pollution. Particular attention should be given to activities that create co-benefits and meet multiple objectives, including for climate, biodiversity and the environment. In light of the enormous environmental damage caused by Russia’s war of aggression, the Facility could contribute to addressing the challenges resulting therefrom. The Facility should, to the extent possible, contribute to climate change mitigation and adaptation, environmental protection, including biodiversity conservation, and to the green transition, or to addressing the challenges resulting therefrom. That contribution should, to the extent possible in a war-torn country, account for at least 20 % of the overall amount corresponding to support under the Ukraine Investment Framework and to investments under the Ukraine Plan. That amount should be calculated building on, as applicable and appropriate, coefficients used in existing methodologies for climate and biodiversity, such as in particular in Annex VI of Regulation (EU) 2021/241 of the European Parliament and of the Council (28) and additional intervention fields, as adjusted in the context of the Facility. |
| (32) | The Facility should strive to improve the awareness of and fight against environmental crime in Ukraine, supporting the implementation of the Kyiv Protocol on Pollutant Release and Transfer Registers and ensuring compliance with environmental protection laws. |
| (33) | Measures funded under the Facility should be consistent, to the extent possible in a war-torn country, with the climate and environmental standards of the Union. Those measures should also mainstream climate change, environmental protection, human rights, peace, democracy, gender equality and non-discrimination, and where relevant, disaster risk reduction, as well as progress towards the Sustainable Development Goals. Support under the Facility should also be guided by the ‘leaving no one behind’ principle, and strive to ensure a balanced and needs-based allocation and use of resources. |
| (34) | The implementation of this Regulation should be guided by the principles of equality, inclusivity and non-discrimination, as elaborated in the Union of Equality strategies. It should prevent and combat violence against women, gender-based violence and domestic violence. It should encourage women’s meaningful participation in decision-making processes, promote and advance gender equality, the empowerment of women and girls, and the protection and promotion of their rights taking into account the EU Gender Action Plans and relevant Council conclusions and international conventions. The Facility should help address social health challenges, including mental health, as a necessity for a healthy post-war society and with a particular focus on children. The implementation of the Facility should be in line with the United Nations Convention on the Rights of Persons with Disabilities (29) and ensure relevant stakeholder involvement in decision-making processes as well as accessibility in its investments and technical assistance. The Facility should also be in line with the United Nations Convention on the rights of the child and support children and youth as key agents of change and as contributors to the realisation of the 2030 Agenda for Sustainable Development. |
| (35) | Strengthening the rule of law, including the independence of the judiciary, supporting deoligarchisation efforts and the fight against corruption and in particular high-level corruption, money laundering, tax avoidance, tax evasion, tax fraud and organised crime, strengthening transparency, including public access to information, good governance at all levels, and the participation of civil society organisations, including human rights organisations, safeguarding a free and pluralistic media, and strengthening public administration reform, including in the fields of public procurement, competition and state aid, remain key challenges and are essential for Ukraine to come closer to the Union and to prepare to fully assume the obligations of Union membership. In view of the longer-term nature of the reforms pursued in those areas and the need to build up track records, support under the Facility should address those issues as early as possible. |
| (36) | In accordance with the principle of participatory democracy and for the purpose of strengthening checks and balances, the Union should encourage the strengthening of parliamentary capacities, parliamentary oversight, democratic procedures and fair representation in Ukraine as well as meaningful participation by regions and municipalities and civil society at all stages of the democratic process, thereby allowing for enhanced democratic scrutiny. The Ukraine Plan should demonstrate how meaningful participation of stakeholders was planned and conducted via consultations, allowing for sufficient timeframes and transparency and clear follow-up procedures to address the input given. In accordance with Ukraine’s constitutional order, the Verkhovna Rada should be informed and consulted at all the stages of the Facility’s life cycle. The outcomes of any debates held concerning or opinions issued on the Ukraine Plan by the Verkhovna Rada should be taken into account. |
| (37) | Enhanced strategic and operational cooperation between the Union and Ukraine on security is pivotal to addressing effectively and efficiently threats to security, including hybrid threats such as cyber threats, as well as to resilience against disinformation, foreign information manipulation and interference, organised crime and terrorism. |
| (38) | Activities under the Facility should also, in line with Article 21(2), point (c), TEU and in accordance with the purposes and principles of the Charter of the United Nations, support, where appropriate, confidence-building measures and processes that promote justice, truth-seeking, comprehensive post-conflict rehabilitation for an inclusive, peaceful society and reparations and guarantees of non-recurrence as well as the collection of evidence of crimes committed during the war and making available the relevant findings, as appropriate. Particular attention should be given to supporting formal, informal and non-formal peace education. |
| (39) | The support under the Facility should be made available under the precondition that Ukraine continues to respect effective democratic mechanisms and institutions, including a multi-party parliamentary system and the rule of law, and to guarantee respect for human rights, including the rights of persons belonging to minorities. |
| (40) | The support under the Facility, including for Ukraine’s path toward accession, should be provided to meet general and specific objectives, based on established criteria and with clear conditionalities. |
| (41) | The general objectives of the Facility should be, inter alia, to assist Ukraine to address the social, economic, psychological and environmental consequences of the war; to contribute to the reconstruction, including the peaceful recovery, reconstruction, restoration and modernisation of the country; to foster social and territorial cohesion, democratic, economic, environmental resilience, and progressive integration into the Union and global economy and markets, as well as an upward economic, social and environmental convergence towards Union standards, and to prepare Ukraine for future Union membership by supporting its accession process. Such objectives should be pursued in a mutually reinforcing manner. |
| (42) | In line with the European Pillar of Social Rights, the Facility should support solidarity, integration and social justice with the aim of creating and sustaining quality employment and sustainable and inclusive growth, ensuring equality of, and access to, opportunities, education and social protection, protecting groups in vulnerable situations, and improving living standards. The Facility should also contribute to fighting poverty and tackling unemployment and lead to quality job creation and the inclusion and integration of disadvantaged groups. The Facility should provide for opportunities to invest in skills, including through vocational education and training aiming to prepare the workforce for the digital and green transitions. It should also enable the strengthening of social dialogue, infrastructure and services. |
| (43) | The Facility should ensure consistency and complementarity with the general objectives of Union external action as laid down in Article 21 TEU, including respect for fundamental rights and principles as well as the protection and promotion of human rights, democracy and fundamental principles of the rule of law, including on anti-corruption, judiciary, public administration, good governance and transparency and accountability. |
| (44) | Given the uncertainties linked to Russia’s war of aggression, the Facility should be a flexible instrument enabling the Union to address Ukraine’s needs through a diversified toolbox which provides financing of the Ukrainian state, support for short-term recovery and reconstruction priorities, support for investments and access to finance, as well as technical assistance and capacity building and other relevant activities. |
| (45) | Union support should be organised around three pillars, namely a financial support pillar for Ukraine for the implementation of reforms and investments, as well as to maintain macro-financial stability of the country, as set out in the Ukraine Plan; a Ukraine Investment Framework pillar to mobilise investments and enhance access to finance, and an accession assistance pillar to mobilise technical expertise and capacity building. |
| (46) | As recovery, reconstruction and modernisation needs of Ukraine are substantial and cannot be covered by the Union budget alone, both public and private investments should play a role in addressing them. The Facility should enable the mobilisation of both public and private investments in a timely manner and should allow for the possibility to scale up support for investments in long-term reconstruction where circumstances allow, taking into account the implementation and absorption capacity of Ukraine. The mobilisation of private investment via the Facility should contribute to the long-term competitiveness and innovative capacity of Ukraine. |
| (47) | Russia must be held fully accountable and pay for the massive damage caused by its war of aggression against Ukraine, which constitutes a blatant violation of the Charter of the United Nations. The Union and its Member States should, in close cooperation with other international partners, continue to work towards this goal, in accordance with Union and international law, taking into account Russia’s serious breach of the prohibition on the use of force enshrined in Article 2(4) of the Charter of the United Nations and the principle of State responsibility for internationally wrongful acts, including the obligation to compensate for the financially assessable damage caused. It is important that, inter alia, progress is made, in coordination with international partners, on how extraordinary revenues held by private entities stemming directly from immobilised Russian assets could be directed to support Ukraine and its recovery and reconstruction, in a manner that is consistent with applicable contractual obligations and in accordance with Union and international law. |
| (48) | The overall maximum amount of Union support under the Facility should be EUR 50 billion in current prices for the period from 2024 to 2027 for all types of support. In light of the evolving circumstances and of the objectives of the Facility itself, the Union support needs to provide a balance between flexibility and programmability. |
| (49) | As for Union support other than in the form of loans, this Regulation should be financed by and apply consistently with the Ukraine Reserve as provided for in Council Regulation (EU, Euratom) 2020/2093 (30) in an amount up to EUR 17 billion for the period 2024 to 2027. That maximum amount does not constitute the prime reference amount within the meaning of point 18 of the Interinstitutional Agreement of 16 December 2020 between the European Parliament, the Council of the European Union and the European Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management, as well as on new own resources, including a roadmap towards the introduction of new own resources (31), for the European Parliament and the Council during the annual budgetary procedure. Potential revenues could be generated under the relevant legal acts concerning the use of extraordinary revenues held by private entities stemming directly from immobilised Central Bank of Russia assets. |
| (50) | In accordance with Article 10b of Regulation (EU, Euratom) 2020/2093 the mobilisation of the Ukraine Reserve should enable the provision of an annual maximum amount for support other than in the form of loans of EUR 5 billion. The unused portion of the annual maximum amount of support other than in the form of loans should remain available for the remaining part of the period for which the Facility is established. |
| (51) | In the framework of the Union’s restrictive measures, adopted on the basis of Article 29 TEU and 215(2) of the Treaty on the Functioning of the European Union (TFEU), no funds or economic resources may be made available, directly or indirectly, to or for the benefit of designated legal persons, entities or bodies. Such designated legal persons, entities or bodies, and legal persons, entities or bodies owned or controlled by them cannot, therefore, be supported by the Facility. |
| (52) | The commitment appropriations and corresponding payment appropriations from the Ukraine Reserve should be mobilised annually in the budget over and above the ceilings of the Multiannual Financial Framework. |
| (53) | For the part of the support under the Facility provided in the form of loans, it is appropriate to extend the Union budget guarantee to cover the financial assistance which is made available to Ukraine, authorised in accordance with Article 220(1) of Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council (32). As a consequence, Regulation (EU, Euratom) 2020/2093 mobilises the necessary appropriations in the Union budget over and above the ceilings of the Multiannual Financial Framework for financial assistance to Ukraine available until the end of 2027. |
| (54) | While respecting the principle of annuality of the Union budget, the possibility to apply flexibilities in accordance with Regulation (EU, Euratom) 2018/1046 for other policies should be provided for, namely for carry overs and re-commitments of funds, to ensure the efficient use of the Union funds, thereby maximising the Union funds available under the Facility. |
| (55) | Restrictions of eligibility in award procedures under the Facility should be provided for where appropriate given the specific nature of the activity or when the activity affects security or public order. |
| (56) | In order to ensure the efficient implementation of the Facility, Ukraine needs to provide public access to the information on funding opportunities under the Facility and ensure free and fair competition during tendering and grant allocation processes carried out under the Facility. The Facility should contribute to the facilitation of Ukraine’s integration into European value chains with the result that all supplies and materials financed and procured under the Facility should originate from Member States, Ukraine, Western Balkan partners, Georgia and Moldova, Contracting Parties to the Agreement on the European Economic Area, and countries which provide a level of support to Ukraine comparable to that provided by the Union, taking into account the size of their economies, and for which reciprocal access to external assistance in Ukraine is established by the Commission, unless the supplies and materials cannot be sourced under reasonable conditions in any of those countries. In the latter case, the Commission should keep the Council informed thereof. |
| (57) | The Union should seek the most efficient use of available resources in order to optimise the impact of its external action. That should be achieved through coherence, consistency and complementarity with the other Union external financing instruments, as well as through synergies with other Union policies and programmes. In order to maximise the impact of combined interventions to achieve a common objective, the Facility should be able to contribute to activities under other programmes without causing a duplication of support measures. |
| (58) | The Union should promote a multilateral, rules-based and values-based approach to global goods and challenges and should cooperate with Member States, partner countries, international organisations and other donors in that respect. |
| (59) | In view of the need to coordinate international support for the recovery, reconstruction and modernisation of Ukraine, it should be possible for Member States, third countries, international organisations, international financial institutions or other sources to contribute to the implementation of the Facility. Such contributions should be implemented in accordance with the same rules and conditions and should constitute external assigned revenue within the meaning of Article 21(2), points (a)(ii), (d) and (e), of Regulation (EU, Euratom) 2018/1046. Support under the Facility should, to the extent possible, be integrated into international efforts towards a financial architecture for the recovery of Ukraine and be coordinated with relevant donors and international financial institutions. |
| (60) | The Commission and the Member States should ensure the coherence, consistency, complementarity and transparency of their support, in particular through regular consultations and frequent exchanges of information during the different phases of the support cycle with relevant stakeholders, including at local and regional level. In light of the presence of various international donors, the necessary steps should also be taken to ensure better coordination and complementarity with other donors, including through regular consultations and strategic outreach. In this regard, the Multi-Agency Donor Coordination Platform for Ukraine should be used as an already established forum for such exchange. |
| (61) | Horizontal financial rules adopted by the European Parliament and the Council on the basis of Article 322 TFEU should apply to this Regulation. Those rules are laid down in Regulation (EU, Euratom) 2018/1046 and determine in particular the procedures for establishing and implementing the budget through grants, prizes, procurement, indirect management, financial instruments, budgetary guarantees, financial assistance and the reimbursement of external experts, and provide for checks on the responsibility of financial actors. |
| (62) | The types of financing and the methods of implementation under this Regulation should be selected on the basis of their ability to achieve the objectives of the Facility and to deliver results, taking into account, in particular, the costs of controls, administrative burdens, and the expected risk of non-compliance. That should include consideration of the use of lump sums, flat rates and unit costs, as well as financing not linked to costs as referred to in Article 125(1), point (a), of Regulation (EU, Euratom) 2018/1046. |
| (63) | A framework agreement should be concluded with Ukraine to set up the principles of the financial cooperation between the Union and Ukraine, including necessary mechanisms to control and audit expenditures, and to ensure that Ukraine achieves a high level of protection of the financial interests of the Union, comparable to that provided for in Regulation (EU, Euratom) 2018/1046 and other related Union legislation (the ‘Framework Agreement’). Financing and loan agreements should also be concluded with Ukraine, where appropriate depending on the pillar concerned, to define conditions for releasing funds. |
| (64) | By way of derogation from the first, second, and fourth subparagraphs of Article 209(3) of Regulation (EU, Euratom) 2018/1046, it is appropriate that repayments and revenues generated by a financial instrument supported under this Regulation should constitute internal assigned revenue to the Facility or its successor programme. |
| (65) | By way of derogation from Article 213(4), point (a), of Regulation (EU, Euratom) 2018/1046, it is appropriate that any surplus from the provision for the Ukraine Guarantee should constitute internal assigned revenue to the Facility or its successor programme. |
| (66) | Under Pillar I of the Facility, financing should be provided to support the implementation of the Ukraine Plan setting out the reform and investment agenda of Ukraine towards the achievement of the general and specific objectives of the Facility, which should also be integrated in an economic and fiscal policy framework. Financing under Pillar I should be provided upon satisfactory fulfilment of conditions set out in the Ukraine Plan. |
| (67) | Ukraine should prepare the Ukraine Plan as a coherent, comprehensive and adequately balanced response to rebuilding and modernising Ukraine, supporting its economic, social and environmental recovery, sustainable development and its progress towards accession to the Union. As such, the Ukraine Plan would also provide a basis for other donors to identify the priority funding areas for the reconstruction of Ukraine and foster ownership, coherence and additional contributions to that end. For that purpose, Ukraine should ensure that the Ukraine Plan as prepared covers its recovery, reconstruction and modernisation needs in an integrated manner, identifying to what extent the measures of the Ukraine Plan are expected to be financed by the Union through the Facility. In preparing the Ukraine Plan, Ukraine should take into account support provided under other Union programmes as well as support from other donors. Ukraine should develop the Ukraine Plan, ensuring that other donors are able to contribute to supporting the measures of the Ukraine Plan, including by increasing the funding available under the Facility. The Ukraine Plan should ensure there is a proper coordination and complementarity with relevant donors and international financial institutions. |
| (68) | While the Ukraine Plan should constitute the basis for the support provided under Pillar I of the Facility, it should also provide a reference for the support provided under Pillars II and III of the Facility. The measures financed under Pillars II and III should support the objectives and the implementation of the Ukraine Plan. |
| (69) | The Ukraine Plan should include reform and investment measures, along with the qualitative and quantitative steps to achieve the satisfactory fulfilment of those measures and an indicative timetable for their implementation. Measures started from 1 January 2023 onwards should be exceptionally eligible. |
| (70) | The Ukraine Plan should set out conditions reflecting the progress expected to be made in the implementation of the measures it contains. Those conditions should take the form of qualitative or quantitative steps. Those steps should be implemented by 31 December 2027, although it should be possible for the overall completion of the measures to which such steps refer to extend beyond 2027. Given the need to ensure the macro-financial stability of Ukraine while supporting its recovery, reconstruction and modernisation efforts in view of accession to the Union, the Ukraine Plan should, in particular, include conditions linked to essential requirements such as macro-financial stability, budget oversight, and public financial management, which may be defined so as to reflect satisfactory progress towards fulfilment, and sectoral and structural reforms and investments. Payments should, accordingly, be structured around such categories of conditions, reflecting the objectives of the Facility. |
| (71) | The preparation and implementation by Ukraine of the Ukraine Plan should take particular account of the situation in Ukraine’s regions and municipalities, having regard to their specific needs for recovery and reconstruction, reform, modernisation and decentralisation, and should be done in meaningful consultation with regional, local, urban and other public authorities as well as civil society organisations in accordance with the multi-level governance principle and taking into account a bottom-up approach. When available, local recovery plans should be taken into account. In this context, the Ukraine Plan should in particular enhance the economic, social, environmental and territorial development of Ukraine’s regions and municipalities and support decentralisation reform across Ukraine and convergence with Union’s standards. The Ukraine Plan should also ensure the involvement of sub-national authorities, in particular municipalities, in decision-making on the use of support in the reconstruction process at local level, and that the reconstruction projects selected and implemented by such sub-national authorities constitute an adequately substantial share of the support. |
| (72) | The completion of decentralisation reform as a sustainable and irreversible element of multi-level governance in Ukraine is an important priority. That reform should include a clear delineation of powers between central and local levels, appropriate internal structures for municipal administrations, and a proportionate framework of supervision of local authorities in line with the European Charter of Local Self-Government, as well as continuing the work on granting legal personality to municipalities under public law based on European practice and in line with the constitutional order of Ukraine. |
| (73) | The Ukraine Plan should also include a detailed explanation of Ukraine’s system and planned measures to effectively prevent, detect and correct irregularities, corruption and in particular fraud, all forms of corruption, including high-level corruption, or any other illegal activity affecting the financial interests of the Union, and conflicts of interest, a detailed explanation of its system and planned measures to effectively investigate and prosecute offences affecting the funds provided under the Facility, and a detailed explanation of the arrangements that aim to avoid double funding from the Facility and other Union programmes or donors. Measures under the Ukraine Plan should, where appropriate, contribute to ensuring an efficient and transparent management and control system. Such measures should be implemented by Ukraine by an indicative date which should be set, as appropriate depending on each measure, over the course of the lifetime of the Facility. |
| (74) | The Commission should assess the Ukraine Plan based on the list of criteria set out in this Regulation. In the case of a positive assessment of the Ukraine Plan, the Commission should submit a proposal for the approval of the Ukraine Plan by the Council. |
| (75) | Given uncertainties and the need for flexibility in the implementation of the Facility, it should be possible for Ukraine to make a reasoned request to the Commission to submit a proposal to amend the Council implementing decision approving the assessment of the Ukraine Plan, where the Ukraine Plan, including relevant qualitative and quantitative steps, is no longer achievable by Ukraine, either partially or totally, because of objective circumstances. The Commission should be able to, in agreement with Ukraine, also submit a proposal to amend that Council implementing decision, in particular to take into account changes of circumstance which allow for an increase in ambition or an alteration of the amounts available. Ukraine should also be able to make a reasoned request to amend the Ukraine Plan, including by proposing addenda where relevant, to take into account additional funding available from other donors or from other sources. |
| (76) | Financial support for the Ukraine Plan should be possible in the form of a loan. In the context of Ukraine’s urgent financing needs, it is appropriate to organise financial assistance under the diversified funding strategy provided for in Article 220a of Regulation (EU, Euratom) 2018/1046 and established as a single funding method therein, which is expected to enhance the liquidity of Union bonds and the attractiveness and cost-effectiveness of Union issuance. |
| (77) | Given the situation of Ukraine, caused by Russia’s war of aggression, and to support it on its long-term stability path, it is appropriate to provide loans to Ukraine on highly concessional terms with a maximum duration of 35 years and to not start the repayment of the principal before 2034. It is also appropriate to derogate from Article 220(5), point (e), of Regulation (EU, Euratom) 2018/1046 and to allow the Union the possibility to cover, for the period from 1 January 2024 to 31 December 2027, the interest rate costs (cost of funding and cost of liquidity management) and to waive the administrative costs (cost of service for administrative overheads) that would otherwise be borne by Ukraine. The borrowing costs subsidy should be granted as an instrument deemed appropriate to ensure the effectiveness of the support under the Facility within the meaning of Article 220(1) of Regulation (EU, Euratom) 2018/1046. |
| (78) | It should be possible for Ukraine to request an interest rate subsidy and a waiver of administrative costs each year. |
| (79) | By way of derogation from Article 31(3) of Regulation (EU) 2021/947, the financial liability from loans under this Regulation should not be supported by the External Action Guarantee, established by that Regulation. Support in form of loans under the Facility should constitute financial assistance within the meaning of Article 220(1) of Regulation (EU, Euratom) 2018/1046. In considering the financial risks and the budgetary coverage, no provisioning should be constituted for the support in the form of loans under the Facility, to be guaranteed over and above the ceilings, and, by way of derogation from Article 211(1) of Regulation (EU, Euratom) 2018/1046, no provisioning rate should be set. |
| (80) | It is important to guarantee both flexibility and programmability, as well as stability, in providing Union support to Ukraine. For that purpose, payments under the Facility should occur according to a fixed quarterly schedule, subject to availability of funding, based on a payment request submitted by Ukraine and following the assessment by the Commission of the satisfactory fulfilment of relevant conditions. In the case of a positive assessment, the Commission should submit without undue delay a proposal for a Council implementing decision establishing the satisfactory fulfilment of the conditions for payments. On the basis of that Council implementing decision, the Commission should adopt a decision authorising the disbursement. Where a condition is not fulfilled in accordance with the indicative timeline set in the decision approving the Ukraine Plan, the Commission should deduct from the payment an amount corresponding to those conditions following a methodology for partial payment. The disbursement of the corresponding withheld funds could take place during the next payment window and up to 12 months after the original deadline set out in the indicative timeline, provided the conditions have been fulfilled. |
| (81) | In order to ensure that Ukraine has access to sufficient financing to cater for its macro-financial stability needs and initiate the recovery, reconstruction and modernisation of the country, Ukraine should have access to up to 7 % of the loan support in the form of pre-financing, subject to availability of funding and to the respect of the precondition for the support to Ukraine under the Facility. |
| (82) | By way of derogation from Article 116(2) and (5) of Regulation (EU, Euratom) 2018/1046, it is appropriate to set the payment deadline starting from the date of the communication of the decision authorising the disbursement to Ukraine and to exclude the payment of default interest by the Commission to Ukraine. |
| (83) | In light of the need to ensure the continued macro-financial stability of Ukraine, it is appropriate that, if the Framework Agreement is not signed or the Ukraine Plan is not adopted, exceptional support should be provided to Ukraine for a period of up to six months starting from 1 January 2024. That support should be subject to Ukraine having made satisfactory progress on the preparation of the Ukraine Plan and to conditions to be agreed in a Memorandum of Understanding (MoU) between the Commission and Ukraine. The MoU should establish in particular policy conditions, indicative financial planning and the reporting requirements, proportionate to the duration of the financing. The policy conditions should include a commitment to the principles of sound financial management with a focus on anti-corruption and anti-money laundering, as well as measures to improve revenue management, and should build on the measures already implemented by Ukraine under previous macro-financial assistance programmes. |
| (84) | Transparency in the implementation of the Facility is an important requirement of Union support. Ukraine should publish, twice a year, data on persons and entities receiving amounts of funding cumulatively exceeding the equivalent of EUR 100 000 for the implementation of reforms and investments specified in the Ukraine Plan. That data should not be published, if duly justified, where disclosure risks threatening the rights and freedoms of the persons or entities concerned or seriously harming the commercial interests of the recipients. The Framework Agreement should include precise rules and a timeframe on the collection of data by Ukraine, on the format of that data and on the access for the Commission, the European Anti-Fraud Office (OLAF), the European Court of Auditors and, where applicable, the European Public Prosecutor’s Office (‘the EPPO’) to that data. |
| (85) | Under Pillar II of the Facility, an investment framework should be set up, aiming to support recovery and reconstruction investments undertaken by Ukrainian authorities, private sector companies, municipalities, state-owned enterprises or other actors (the ‘Ukraine Investment Framework’). The Ukraine Investment Framework should address priorities identified in the Ukraine Plan, and support its objectives and its implementation. The Ukraine Investment Framework should involve Ukrainian authorities in its governance as appropriate. |
| (86) | The Ukraine Investment Framework should constitute an integrated financial package supplying financing capacity in the form of financial instruments, budgetary guarantees and blending operations in Ukraine. Support under the Ukraine Investment Framework should be implemented by way of indirect management, in particular drawing on the financial and technical capacities of international financial institutions, European development finance institutions, bilateral European financial institutions and export credit agencies, including their participation to the risk linked to investments with their own resources. Given the scale of recovery and reconstruction investments in Ukraine that will require risk-sharing, it is necessary for the Union to establish a dedicated guarantee capacity (the ‘Ukraine Guarantee’). Operations covered by the Ukraine Guarantee are to be implemented in accordance with Article 208(4) of Regulation (EU, Euratom) 2018/1046. Export credit agencies and other financial institutions providing trade facilitation support may act as financial intermediaries. In implementing and managing the Ukraine Guarantee, the Commission should ensure close coordination with support implemented in the framework of the European Fund for Sustainable Development Plus established by Regulation (EU) 2021/947. The Ukraine Guarantee should benefit sovereign, sub-sovereign, non-commercial and commercial entities and the private sector. |
| (87) | Given its role under the Treaties, the EIB should be a partner in the implementation of operations under the Ukraine Guarantee. For this reason, the EIB Group should be entrusted until 31 December 2025 with the implementation of a 25 % dedicated indicative minimum amount of the Ukraine Guarantee for operations with sovereign counterparts and non-commercial sub-sovereign counterparts. After that date, the unused part of the dedicated amounts should become available to all eligible counterparts for all types of operations in order to ensure the full use of the Ukraine Guarantee. |
| (88) | The eligible counterparts should, upon request, provide the Commission with any additional information necessary to fulfil the Commission’s obligations pursuant to this Regulation, together with information regarding compliance with human rights, and social, labour and environment standards. |
| (89) | All eligible counterparts and eligible entrusted entities should take utmost care to avoid, report and counter any corrupt practices, favouritism or undue regional or sectoral concentration of resource allocation or use and should require dedicated reporting and auditing on those aspects, where relevant. |
| (90) | The flexibility of the support under the Facility should be enhanced by providing for flexible implementation of the Ukraine Guarantee, which might be granted gradually. It is appropriate to derogate from Regulation (EU, Euratom) 2018/1046 to allow the constitution of provisioning until 31 December 2027 to be equal to the amount of provisioning corresponding to the guarantee granted instead of the amount of global provisioning. As part of the derogation, it should also be possible to constitute the provisioning gradually to reflect the progress in the selection and implementation of the financing and investment operations supporting the objectives of the Facility. |
| (91) | In order to efficiently use the funds under Pillar II, the power to adopt acts in accordance with Article 290 TFEU should be delegated to the Commission in respect of amending the provisioning rate for the Ukraine Guarantee. It is of particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert level, and that those consultations be conducted in accordance with the principles laid down in the Interinstitutional Agreement of 13 April 2016 on Better Law-Making (33). In particular, to ensure equal participation in the preparation of delegated acts, the European Parliament and the Council receive all documents at the same time as Member States’ experts, and their experts systematically have access to meetings of Commission expert groups dealing with the preparation of delegated acts. |
| (92) | To facilitate private investment and the development of small and medium businesses, it is necessary to dedicate at least 15 % of the guarantees provided by the Ukraine Guarantee to micro, small and medium-sized enterprises (SMEs), as defined in Article 2 of the Annex to Commission Recommendation 2003/361/EC (34), including start-ups, and to track and report the allocation of such portion of funds. |
| (93) | Under Pillar III of the Facility, support should mainly aim at progressively aligning to Union rules, standards, policies and practices (‘acquis’) with a view to future Union membership, thereby contributing to the implementation of the Ukraine Plan. Relevant recommendations of international bodies, such as the Council of Europe and the Venice Commission should also be taken into account in this process. Support should also aim at strengthening democratic and judicial institutions, including courts, and the capacities of stakeholders, including local and regional authorities, social partners and civil society organisations, including their public scrutiny role. |
| (94) | Resources from Pillar III should also be used to finance the borrowing costs of the Facility as well as identified borrowing costs and provisioning of budgetary guarantees deriving from previous support for Ukraine. |
| (95) | In accordance with Regulation (EU, Euratom) No 883/2013 of the European Parliament and of the Council (35), Regulation (EU, Euratom) 2018/1046 and Council Regulations (EC, Euratom) No 2988/95 (36), (Euratom, EC) No 2185/96 (37) and (EU) 2017/1939 (38), the financial interests of the Union are to be protected by means of effective measures, including measures relating to the prevention, detection, correction and investigation of irregularities, fraud, corruption, conflicts of interest, double funding, and to the recovery of funds lost, wrongly paid or incorrectly used, and measures to effectively investigate, prosecute and bring to judgment the criminal offences affecting the funds provided under the Facility. The EPPO is empowered, in accordance with Regulation (EU) 2017/1939, to investigate and prosecute criminal offences affecting the financial interests of the Union. The Ukrainian competent authorities should treat, without delay, mutual legal assistance requests and extradition requests issued by the EPPO and Member States’ competent authorities concerning criminal offences affecting the funds under the Facility. |
| (96) | In particular, in accordance with Regulations (Euratom, EC) No 2185/96 and (EU, Euratom) No 883/2013, OLAF should be in a position to carry out administrative investigations, including on-the-spot checks and inspections, with a view to detecting and establishing whether there has been fraud, corruption or any other illegal activity affecting the financial interests of the Union and to reporting any criminal conduct to the EPPO, in accordance with Article 24(1) of Regulation (EU) 2017/1939. |
| (97) | The Commission should strive to make available to Ukraine a single integrated and interoperable information and monitoring system, including a single data-mining and risk-scoring tool, to access and analyse the relevant data in compliance with Union data protection principles and with applicable data protection rules. Where such a system is available, Ukraine should use and feed the relevant data into the system, including by using support under Pillar III. The data should allow the Commission and relevant Ukrainian authorities in charge of implementing and controlling the funds to assess risks and prevent irregularities. |
| (98) | In accordance with Regulation (EU, Euratom) 2018/1046, the necessary rights and access should be granted to the Commission, OLAF, the European Court of Auditors and, where applicable the EPPO, including from third parties involved in the implementation of Union funds. Ukraine should also report irregularities in relation to the use of the funds to the Commission. |
| (99) | The reinforcement of internal control systems, including ex ante controls, the fight against any forms of corruption, favouritism or fraud, the promotion of transparency, robust, accountable and transparent administration, and efficient public financial management, are important reform priorities for Ukraine and should be supported by the Facility. |
| (100) | The Commission should ensure that the financial interests of the Union are effectively protected under the Facility. An independent audit board should, therefore, be set up to provide the Commission with information on the possible mismanagement of funds. Such information should be made available to OLAF, and where appropriate to the relevant Ukrainian authorities. The Commission, with the assistance of the Union delegation, should be entitled to perform regular checks on how Ukraine implements funds during the whole project life cycle. The Audit Board should ensure a regular dialogue and cooperation with the European Court of Auditors as well as with the Accounting Chamber of Ukraine. |
| (101) | While it is primarily the responsibility of Ukraine to ensure that the Facility is implemented in compliance with applicable standards, taking into account the principle of proportionality and the specific conditions under which the Facility will operate, the Commission should be able to receive sufficient assurance from Ukraine in that regard. To that end, Ukraine should commit in the Ukraine Plan to improve its current management and control system and to recovering amounts misused. Ukraine should establish a monitoring system feeding into an annual progress report. Ukraine should collect data and information allowing the prevention, detection and correction of irregularities, fraud, corruption and conflicts of interest, in relation to the measures supported by the Facility. The Framework Agreement and the financing and loan agreements should provide for the obligations of Ukraine to ensure the collection of, and access to, in compliance with Union data protection principles and with applicable data protection rules, adequate data on persons and entities receiving funding, including beneficial ownership information, for the implementation of measures of the Ukraine Plan. |
| (102) | The financial interests of the Union should also be protected when the funds are implemented in direct management through grants and procurement and indirect management with pillar assessed entities, in particular under Pillars II and III of the Facility. Only pillar-assessed entities should be selected to implement Union funding under indirect management under the Facility. |
| (103) | Support under the Facility should be implemented by work programmes referred to in Article 110 of Regulation (EU, Euratom) 2018/1046. |
| (104) | The communication capacities of Ukraine should be enhanced in order to ensure public support for and understanding of Union values and the benefits and obligations of Union membership, while addressing disinformation, foreign interference, and safeguarding strong and free pluralistic media. Visibility of the Union funding should also be ensured. |
| (105) | The Commission should ensure clear monitoring and evaluation mechanisms are in place in order to provide effective accountability and transparency in implementing the Union budget, and to ensure effective assessment of progress towards the achievement of the objectives of this Regulation. |
| (106) | The Commission should assess each year the implementation of support under the Facility. It should allow the Committee established by this Regulation to have adequate information to assist the Commission. For the effective monitoring of implementation, Ukraine should report once a year in an annual progress report on the implementation. That report should also be made available to the European Parliament and the Council. Such reports prepared by the Ukrainian government should be appropriately reflected in the Ukraine Plan. Proportionate reporting requirements should be imposed on recipients of Union funding implemented under Pillars II and III of the Facility. |
| (107) | In order to ensure uniform conditions for the implementation of this Regulation, implementing powers should be conferred on the Commission. Those powers should be exercised in accordance with Regulation (EU) No 182/2011 of the European Parliament and of the Council (39). |
| (108) | In view of the importance of the financial effects of the support to Ukraine under the Facility and of the consequences of certain decisions to be taken for the implementation of the Facility in light of the specific situation of Ukraine, implementing powers should be exceptionally conferred on the Council in the cases identified by this Regulation. |
| (109) | The Commission should duly take into account Council Decision 2010/427/EU (40) and the role of the European External Action Service where appropriate, in particular when monitoring the fulfilment of the precondition for Union support, in its assessment of the Ukraine Plan and while gathering advice on the Ukraine Investment Framework. |
| (110) | Since the objectives of this Regulation cannot be sufficiently achieved by the Member States but can rather be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 TEU. In accordance with the principle of proportionality as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve those objectives. |
| (111) | In order to ensure continuity in providing support in the relevant policy area, this Regulation should enter into force as a matter of urgency on the day following that of its publication in the Official Journal of the European Union, |