EUROPEAN COMMISSION Brussels, 2.3.2017 COM(2017) 130 final COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL First Annual Report on the Facility for Refugees in Turkey



Contents 1. Introduction 1.1 Turkey and the refugee crisis 1.2 The EU response to the crisis and the establishment of the Facility 2. The functioning of the Facility 3. Financial capacity, duration and nature of funding 4. Implementation of the Facility 4.1 Humanitarian assistance 4.2 Non-humanitarian assistance 5. Monitoring & evaluation and audit 5.1 Monitoring & evaluation 5.2 Audit 6. Communication and visibility 7. Conclusion and next steps





1. Introduction According to Article 8 (1) of the Commission Decision of 24 November 2015 on the coordination of the actions of the Union and of the Member States through a coordination mechanism, the Commission is to keep the European Parliament and the Council regularly informed about the implementation of the Facility for Refugees in Turkey (hereinafter 'the Facility'). Paragraph 2 of Article 8 of the Decision commits the Commission to report annually to the European Parliament and to the Council on the implementation of the Facility. This first Annual Report of the Facility describes the functioning of the Facility, its implementation, monitoring and evaluation system, communication activities and next steps. The report builds on the reports on progress made in the implementation of the EU-Turkey Statement and the different information notes issued within the framework of the Steering Committee of the Facility. The Report also includes the review of the financial capacity, duration and nature of the funding required according to Article 9(2) of the Decision, see in particular section 3. 1.1 Turkey and the refugee crisis Turkey’s geographical position makes it a prominent reception and transit country for many refugees and migrants. As a result of an unprecedented influx mainly due to the Syria conflict, the country has been hosting the highest number of refugees and migrants in the world, numbering more than 3 million. It includes 2.8 million registered Syrian refugees of which 10% reside in 26 camps established by the Turkish government in the south-east of Turkey, while the remaining 90% live outside of camps in urban, peri-urban and rural areas. To receive and host such high numbers of refugees and migrants, Turkey has been providing generous humanitarian and financial support. Provincial Breakdown of Syrian Refugees in Turkey, Source: UNHCR, December 2016 1.2 The EU response to the crisis and the establishment of the Facility In 2015, the European Union and its Member States decided to step up their political and financial engagement to support Turkey in its efforts in hosting refugees. Comprehensive cooperation based on shared responsibility, mutual commitments and delivery between the European Union and Turkey was agreed upon within the framework of the 29 November 2015 EU-Turkey Statement. The summit of 29 November 2015 activated the EU-Turkey Joint Action Plan (JAP) to help Turkey address the consequences of the Syria conflict. The JAP aims to address the current migration crisis in two ways: (1) by supporting Syrians and their Turkish host communities, (2) by strengthening cooperation to prevent irregular migration. It commits Turkey to continue to protect and support Syrians, including by providing education and health and allowing them to work. In answer to the call from EU Member States for significant additional funding to support refugees in Turkey, the Commission established the Facility for Refugees in Turkey by means of the Commission Decision of 24 November 2015, amended on 10 February 2016. The Facility is a mechanism to coordinate the mobilisation of resources made available under both the EU budget and additional contributions from Member States integrated into the EU budget as external assigned revenue amounting to a total of EUR 3 billion for the period 2016-2017. Member States committed politically to providing national contributions in the framework of the Common Understanding between EU Member States and the European Commission which was adopted by the representatives of the governments of the Member States on 3 February 2016. The Common Understanding also establishes a conditionality framework. The EUR 3 billion is made available in addition to EUR 345 million already allocated by the Commission to Turkey in response to the Syrian refugee crisis before the start of the Facility and is additional to Member States' bilateral aid. The Facility became operational on 17 February 2016 with the first meeting of the Facility Steering Committee. Following this meeting, the Commission moved rapidly to contract the first projects under the Facility. On 18 March 2016, the Heads of State and Government of the European Union and Turkey reconfirmed their commitment to the implementation of their Joint Action Plan and agreed further measures aimed at deepening Turkey-EU relations and addressing the migration crisis. Turkey and the European Union recognised that further, swift and determined efforts were needed. More specifically, the EU-Turkey Statement of 18 March 2016 called inter alia for putting an end to the irregular migration from Turkey to the EU by breaking the business model of the smugglers and offering migrants an alternative to putting their lives at risk; and for the speeding up of the implementation of the Facility. The joint EU-Turkey efforts have delivered concrete results. The number of irregular crossings from Turkey to Greece has fallen dramatically following the activation of the Statement of 18 March. From 20 March 2016 to 26 February 2017, the average daily arrivals on the Greek islands were 84. The number of fatalities and missing persons recorded in the Aegean Sea from 1 April 2016 to 23 February 2017 was 70. While every such death is a tragedy, this represents a substantial fall in the number of lives lost. A key component of the EU-Turkey Statement was to create legal pathways for migrants seeking protection in the EU. Resettlements from Turkey to the EU are ongoing at an accelerated pace; from the activation of the Statement to 27 February 2017, 3 565 Syrian refugees have been resettled from Turkey to Europe. Both sides are committed to continuing and improving cooperation. 2. The functioning of the Facility

The Facility for Refugees in Turkey is a coordinating mechanism that allows for the swift, effective and efficient mobilisation of EU assistance to refugees in Turkey. The Facility ensures the optimal mobilisation of relevant existing EU financing instruments, either as humanitarian assistance or non-humanitarian assistance, to ensure that the needs of refugees and host communities are addressed in a comprehensive and coordinated manner. The Steering Committee of the Facility provides strategic guidance on the overall priorities, the type of actions to be supported, the amounts to be allocated and the financing instruments to be mobilised, as well as, when appropriate, on the conditions relating to the implementation by Turkey of its commitments under the EU-Turkey Joint Action Plan. The Steering Committee is chaired by the Commission and composed of two representatives of the Commission and one representative of each Member State with Turkey sitting in an advisory capacity. During the first year of implementation of the Facility, five Steering Committee meetings were held, on 17 February, 12 May, 30 June, 4 October 2016 and 12 January 2017. The Commission should convene the 6th Steering Committee meeting on 31 March 2017. In line with Article 3 (2) of the Commission Decision establishing the Facility, the second Steering Committee of 12 May 2016 agreed that the Facility should focus on six priority areas: (1) humanitarian assistance, (2) migration management, (3) education, (4) health, (5) municipal infrastructure and (6) socio-economic support. The key principles guiding Facility implementation are speed, efficiency and effectiveness while ensuring sound financial management. Sustainability of Facility interventions is also important, as is the shared ownership with the Turkish authorities. The identification of priority areas for Facility assistance is based on a comprehensive and independent needs assessment which was presented to the Steering Committee in June 2016. The Facility coordinates financing from the following external financing instruments: Council Regulation (EC) No 1257/96 concerning humanitarian aid (HUMA), the European Neighbourhood Instrument (ENI), the Development Cooperation Instrument (DCI), the Instrument for Pre-Accession Assistance (IPA II) and the Instrument contributing to Stability and Peace (IcSP). Measures to be financed by the Union's budget are implemented in accordance with its financial rules and regulations – which includes both direct and indirect management and implementation by the EU Regional Trust Fund in Response to the Syrian Crisis (EUTF). Implementation of assistance is conditional upon strict compliance by Turkey with undertakings reflected in the EU-Turkey Joint Action Plan, and the EU-Turkey Statements from 29 November 2015 and 18 March 2016. 3. Financial capacity, duration and nature of funding The total budget coordinated by the Facility is EUR 3 billion to be contracted in the period 2016-2017. This is made up of EUR 1 billion from the EU budget, and EUR 2 billion in additional funding from the Member States. Member States' contributions are made directly to the EU General Budget in the form of external assigned revenue pursuant to Article 21(2)(b) of the Financial Regulation and assigned to the IPA II and HUMA budget lines respectively. Of the EUR 1 billion from the EU budget, EUR 250 million was mobilised in 2016 and EUR 750 million is set aside for the Facility in the 2017 budget. The Facility is financed from the following sources: 2016 2017 Total (in million €) EU BUDGET Humanitarian Aid 165 145 310 Non-Humanitarian Aid IPA 55* 595 650 DCI 10 10 20 IcSP 20 0 20 Subtotal Non-humanitarian aid 85 605 690 Total 250 750 1000 ASSIGNED REVENUE FROM MS 2 000 * of which EUR 18 million transferred to IPA II from the ENI The Commission concluded contribution agreements with all Member States concerning their national contributions for the combined total of EUR 2 billion pursuant to Article 7 (2) of the Rules of Application of the Financial Regulation. Member States paid the first annual tranche in 2016 for a total amount of EUR 678 million, out of which EUR 575 million or some 85 % has been disbursed; of which EUR 292 million under IPA and EUR 283 million under ECHO (HUMA). There is so far a satisfactory match between, on the one hand, the pace of Member States' payments of their contributions into the Facility and, on the other hand, the pace of disbursements financed by those contributions from the Facility. The distribution of Member States' payments to the Facility is the following: Member States' payments to the Facility (in million €) 2016 (paid) 2017 2018 2019 Total 2016-2019 678 846 396 80 2000 At the end of 2016, the deadline for final payments under the Facility was extended from the end of 2019 to the end of 2021 for technical reasons to allow for the signing of some longer-term contracts foreseen in the Special Measure adopted in July 2016. For example, for infrastructure works, the final payment can only be made after formal reception of works which requires a longer deadline. Further to discussions in the fourth Steering Committee and in Coreper, modified letters of acknowledgement of receipt were issued in December 2016. This extension will have no negative impact on the speed of contracting nor with regards to the implementation of the activities concerned, and will not impact the timing of the payments of the Member States nor of the Commission into the Facility.

4. Implementation of the Facility The Facility is implemented as humanitarian and non-humanitarian assistance, with EUR 1.4 billion and EUR 1.6 billion indicatively allocated to the respective strands. Humanitarian assistance supports the most vulnerable refugees (and other persons of concern) through predictable and dignified support addressing basic needs and protection. Non-humanitarian assistance supports the longer-term livelihoods, socio-economic and educational perspectives of refugees. It aims to help children with access to primary and secondary education and improvements to educational infrastructure, including school buildings and learning materials. It also focuses on exposed groups, e.g. by protecting women against sexual and gender based violence and improving access to sexual and reproductive health care. The January 2017 Steering Committee meeting recognised, based on the 4th report on progress made in the implementation of the EU-Turkey Statement, that the EU-Turkey Statement – albeit fragile – continued to deliver and acknowledged that there was continued good progress in the implementation of the Facility. By the end of February 2017, the total amount allocated under the Facility to both humanitarian and non-humanitarian assistance had reached EUR 2.2 billion. Out of the total allocated, 39 projects had been contracted for a total of EUR 1.5 billion, or half the Facility envelope. Out of the total contracted, EUR 750 million had been disbursed, which is testimony to the swift and efficient implementation of the Facility. Facility funding continues to have a direct impact on the ground, for refugees and host communities. Most Facility implementation takes place out-of-camp, mainly in the ten most affected provinces: Sanliurfa, Hatay, Gaziantep, Adana, Mersin, Kilis, Mardin, Kahramanmaras, Osmaniye and Istanbul. 4.1 Humanitarian assistance EU humanitarian aid is guided by the European Consensus on Humanitarian Aid of 2007, which notably provides that the EU as a humanitarian actor adheres to the humanitarian principles of humanity, neutrality, impartiality, and independence. The Lisbon Treaty established a specific legal base for humanitarian aid (Article 214 TFEU), while the Humanitarian Aid Regulation (HAR; No. 1257/96) lays down the operational framework for EU humanitarian aid. The European Commission's humanitarian aid is based on annual country-specific Humanitarian Implementation Plans (HIPs). The framework for cooperation between the Commission and its partners in the area of humanitarian aid is established by the Commission's Financial and Administrative Framework Agreements (FAFA) with international organisations and Framework Partnership Agreements (FPAs) with non-governmental organisations. From the EUR 1.4 billion mobilised under the humanitarian strand of the Facility, EUR 595 million has been allocated to date. Of this, EUR 551 million has been contracted, through 28 humanitarian projects with 19 partners, covering the response to basic needs, protection, education and health. Out of the EUR 551 million contracted, EUR 411 million has been disbursed to date. The following contracts have been signed within the framework of the Facility. Examples of EU support on health Specific services in the health sector covering primary health care assistance, physical rehabilitation/post-operative care for war wounded people, assistance to people living with disabilities, mental health services and reproductive health are being supported. 517 864 health care consultations have been conducted. 276 Syrian doctors and 175 Syrian nurses received training. Seven migrant health centres have opened and started delivering practical training for Syrian health professionals. In March 2016, the EU awarded the World Food Programme (WFP) EUR 40 million to help provide 585 000 refugees living outside of camps and 150 000 refugees living in refugee camps with e-cards which can be redeemed for food at designated shops. The WFP is working closely with the Turkish Red Crescent for the efficient delivery of the assistance. The refugees currently benefitting from the e-cards will gradually be transferred to the Emergency Social Safety Net (see below). Education in Emergencies Education in Emergencies has also been identified as one of the priority areas for humanitarian aid. This is done through support to non-formal education and school transportation. 9 380 children are being provided with school transportation. In addition, the Commission is working to provide Education assistance through the ESSN, aimed at increasing enrolment and improving attendance for the most vulnerable children. By 15 April 2016 a further EUR 50 million were contracted in humanitarian aid to address the immediate needs of refugees in Turkey. The 15 humanitarian organisations funded under this allocation include the Danish Refugee Council, the International Organization for Migration (IOM), the International Medical Corps UK and the International Federation of Red Cross and Red Crescent Societies (IFCR), who are working in close cooperation with Turkish partner organisations. The projects address all major humanitarian concerns, providing food assistance, help in the form of cash and vouchers, specialised assistance for winter, access to health services, education for refugee children, protection, information management, and specialised help for persons with disabilities, as well as mental health and psychosocial support. In June 2016, the Commission published the Humanitarian Implementation Plan for Turkey (HIP), for a total amount of EUR 505.65 million. In July 2016, EUR 74 million was contracted under the HIP for projects in the sectors of primary health care, non-formal education, preparations for the upcoming winter and protection. On 26 September 2016, the Commission launched the flagship of the humanitarian component of the Facility – the Emergency Social Safety Net (ESSN) – together with the Turkish authorities and the partner organisations implementing the scheme. It is the EU's largest-ever humanitarian programme, with an initial budget of EUR 348 million, and aims at providing the most vulnerable refugees with monthly cash transfers onto an electronic debit card to help them cover their basic needs. A monthly cash grant is electronically uploaded on cards allowing people to pay for what they need the most, providing them with the dignity of choice. This electronic cash transfer system is not only a very efficient way of providing humanitarian assistance but also stimulates the local economy.

The Emergency Social Safety Net (ESSN) The registration of beneficiaries started on 28 November, and the first cash distributions started at the end of December 2016. At the end of February 2017, a total of over 250 000 refugees have already received support through the ESSN programme. The ESSN aims at progressively covering one million of the most vulnerable refugees in the course of 2017. In December 2016, a contract of EUR 5 million was signed with Mercy Corps in the area of protection. The project aims at improving the protective environment for 50 000 refugees by enhancing their capacities (self-protection) and building community safety nets to facilitate safe access to services such as health, documentation, income support (e.g. ESSN), legal advice, education, translation, and transport. A EUR 34 million contract was recently signed with UNICEF on Conditional Cash Transfer for Education (CCTE). This project will be linked to the ESSN, and will contribute to increasing enrolment and improving attendance for the most vulnerable children. Before 1 April 2017, EUR 41.65 million of the remaining amount under the HIP will be contracted for projects focusing on protection and health. In spring the Commission will publish the 2017 Humanitarian Implementation Plan (HIP) for Turkey. The first contracts and payments under the 2017 HIP are expected in the second quarter of 2017. They will focus on the continuation of the humanitarian strategy, covering protection, health and education as well as a second tranche for the ESSN, which will continue to account for the majority of the available funding. 4.2 Non-humanitarian assistance The EUR 1.6 billion mobilised under the non-humanitarian strand of the Facility has been almost entirely allocated. EUR 944 million has been contracted and EUR 339 million has been disbursed. The breakdown of allocations per priority area is as follows: Article 2(1) of the Common Implementing Regulation (CIR) applicable to IPA II allows the Commission to adopt Special Measures in duly justified cases. Special Measures are adopted with a favourable opinion of the IPA II Committee and communicated to the European Parliament and the Member States. To date, three Special Measures have been adopted within the framework of the Facility, as follows: Special Measure on a contribution to the EU Regional Trust Fund in Response to the Syrian Crisis (EUTF) for EUR 55 million in March 2016; Special Measure on migrants returned to Turkey for EUR 60 million in April 2016; Special Measure on education, health, municipal infrastructure and socio-economic support for EUR 1.415 billion in July 2016. In accordance with Article 4(1) of the CIR, financial assistance may be provided through the following types of financing a) grants; b) procurement contracts for services, supplies or works; c) general or sector budget support; d) contributions to trust funds and financial instruments. For the purpose of the IPA II Facility funds, Article 4(7) also gives the possibility to the Commission to implement the funds indirectly through e.g. international organisations, Member State bodies or International Financial Institutions (IFIs). IPA II funds under the Facility are managed in accordance with the rules for external action contained in Title IV of part two of the Financial Regulation and its Rules of Application. Interventions can finance the reimbursement of pre-agreed, actually incurred and verifiable costs relating to precisely defined tasks. This also applies to third parties, including IFIs. Costs involved in the mobilisation of intermediaries – if and where appropriate – have been kept to an absolute minimum. Schemes and initiatives financed by resources coordinated under the Facility performing satisfactorily could be scaled up and rolled out in accordance with EU financial rules and the requirements of the respective basic act, subject, where appropriate, to the relevant comitology committee. Grants are given to implement specific actions. Payments under grants are made based on reported incurred costs in accordance with the general conditions of the individual grant contract. These costs are verified by external auditors before further pre-financing or final payment takes place. Should any irregularities be detected or costs declared ineligible, the Commission can recover funds or impose penalties. The Commission's cooperation with the IFIs takes place within the framework of indirect management (Financial Regulation Articles 60 & 61) where the Commission entrusts the management of the implementation to the IFI concerned. The Commission can delegate implementation responsibilities to IFIs that have passed a so-called pillar assessment. The purpose of such pillar assessment is to confirm compliance of the IFIs' systems with requirements under the EU Financial Regulation. In one specific case, cooperation takes place within the framework of direct management in the form of a direct grant where the IFI itself is implementing funds under the Facility. The first Special Measure under the Facility was adopted in March 2016 and contributed EUR 55 million to the EUTF. Contracts for the first Facility-funded projects were signed on 4 March 2016. On non-humanitarian aid, it consists of one project on education, worth EUR 37 million, and implemented by UNICEF. Its results achieved so far are presented in the box for illustration purposes.

Example of results achieved with UNICEF 60 000 children benefiting from educational materials 7 950 Syrian teachers and other education personnel receiving incentives 2 081 teachers and other education personnel trained 10 392 children benefiting from psychosocial and social cohesion programmes 44 337 children benefited from peer information and support sessions from youth leaders 6 adolescents and youth spaces established 9 NGOs capacitated on implementing social cohesion and peacebuilding activities 9 888 adolescent and youth benefiting from awareness raising activities 3 child protection units established The Facility has continued to support a series of bottom-up measures to help refugees in Turkey. To date five projects, for a total of EUR 64.4 million have been contracted through the EUTF, mainly on socio-economic support, education and higher education. An additional package of EUTF projects is under preparation. In April 2016, EUR 60 million was mobilised under a second Special Measure, which provides support to cover the costs incurred in receiving and hosting migrants who have been returned from Greece to Turkey under the EU-Turkey Statement of 18 March 2016. The Special Measure is implemented through a direct grant to the Turkish Directorate General for Migration Management (DGMM) and eligible expenditure is based on actual costs incurred and paid, effective as from 4 April 2016. A contract of EUR 20 million financed under the IcSP was signed in August with the International Organisation for Migration (IOM) to develop the capacities of the Turkish Coast Guard for search and rescue operations. Further to discussions at the second Steering Committee of the Facility and approval by the IPA Management Committee, the Commission adopted the third Special Measure on education, health, municipal infrastructure and socio-economic support with a budget of EUR 1.4 billion on 28 July 2016. Under the third Special Measure two direct grants were signed in September for a duration of two years. Under the first contract – for EUR 300 million – with the Turkish Ministry of National Education, 500 000 Syrian children will get access to formal education, and receive stationary, course books and school uniforms. From these students, 360 000 will receive Turkish language training; 40 000 Arabic language training; 10 000 catch-up, 20 000 additional back-up training and 40 000 will be transported to school. Training under the direct grant on education Since October 2016, 5 200 Turkish language teachers have been recruited and trained. 1800 school principals have received training on the integration of Syrian students into the school system. The second contract – also of EUR 300 million – with the Ministry of Health will provide around two million refugees with access to primary healthcare services through the creation and operationalisation of healthcare facilities, and will make rehabilitative mental health services available for up to one million refugees in Turkey. In addition, family planning, prevention of communicable diseases, recruitment and training of healthcare staff and outreach activities will be provided. In addition to these grants two contracts for a total of EUR 200 million were signed with KfW and the World Bank in December 2016. These contracts provide for the construction and equipment of 70 new schools in provinces with a high concentration of Syrian refugees. The construction and equipping of these schools should benefit 50 000 Syrian children. The contracts should also increase the implementation and management capacity of the Ministry of National Education. Additional Facility interventions in the area of socio-economic support, municipal and health-related infrastructure should be signed during the first half of 2017. Relevant contracts should be implemented with the help of International Financial Institutions. The third Special Measure of July 2016 also provided for a project preparation facility (PPF). The objective of PPF, which has a maximum budget of EUR 25 million, is to help identify and articulate future investment projects in priority areas – health, education and municipal infrastructure – in the target provinces in Turkey. The Commission is currently reviewing applications submitted to the PPF and should follow-up with the IFIs concerned in consultation with the Turkish authorities. The aim is to sign contracts by spring 2017. Selected interventions should develop into a solid pipeline of investment projects that should be ready for contracting and implementation by early 2018. 5. Monitoring & evaluation and audit 5.1 Monitoring & evaluation As a coordinating mechanism, the Facility provides for the funding of a variety of actions in a variety of priority areas, which are implemented via different EU instruments, with the help of a variety of partners. This key characteristic of the Facility has determined the set-up of the Facility's monitoring and evaluation (M&E). The Facility requires a framework that is able to measure the results achieved by Facility-funded interventions irrespective of the instrument mobilised. The Facility Results Framework is designed as a management and accountability tool to allow reporting on progress both at Facility and priority area level. It allows for the review of performance vis-à-vis intended results, for programme adjustments where necessary, and produces tailored information in response to information requests. The draft Results Framework was discussed at the Steering Committee meeting of 12 January 2017. The Results Framework is expected to be finalised in March 2017. The Framework is a dynamic document that should allow for continuous review of both relevance and impact of Facility funded interventions. For the monitoring system to become operational, an on-line monitoring platform is foreseen. This should facilitate data generation, aggregation and analysis, and enable the visualisation of progress on ongoing actions at regular intervals. It should provide dashboards representing current key figures and analysis of performance vis-à-vis targets under various angles of inquiry. Monitoring data should be disaggregated by gender, age and disability, where possible and appropriate. As an information portal, the platform should act as a one-stop shop for information needs of Facility stakeholders. Technical assistance should be mobilised in support of the integration of different components of the monitoring mechanism so as to achieve an all-inclusive Facility-wide M&E system. This should include a variety of tasks, including technical encoding and operation of the on-line monitoring platform, the development of monitoring guidelines and monitoring tool, the provision of the third-party monitoring for actions funded by through IPA and the IcSP, and the contracting of evaluation. The system should be fully operational by the second half of 2017, while transitional measures are progressively foreseen in the meantime. 5.2 Audit