Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on establishing the Ukraine Facility
Date: 2023-06-20
Institutions: Directorate-General for Neighbourhood and Enlargement Negotiations, European Commission
Subjects: EU aid, EU investment, European integration, European neighbourhood policy, Ukraine, economic reconstruction, financial stability, investment aid, macro-financial assistance, pre-accession aid

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   EUROPEAN COMMISSION  Brussels, 20.6.2023  COM(2023) 338 final 2023/0200 (COD)  Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on establishing the Ukraine Facility  
 
 
EXPLANATORY MEMORANDUM 

1. 

• 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

On  24  February  2022,  Russia  launched  a  full-scale  military  invasion  of  Ukraine,  with 
devastating  consequences  for  Ukraine  and  its  people.  More  than  fifteen  months  of  intense 
fighting,  heavy  artillery  shelling  and  airstrikes  have  resulted  in  high  numbers  of  civilian 
casualties  and  immense  human  suffering.  Russia’s  war  of  aggression  has  caused  extensive 
damage to infrastructure and services across Ukraine and the wholesale destruction of cities 
and  towns  in  some  parts  of  the  country.  The  resulting  humanitarian  crisis  has  displaced 
millions of Ukrainians from their homes and left many in desperate need of food, shelter and 
medical assistance. To this day, Russian aerial strikes continue to attack targets throughout the 
country. It will take years, if not decades, to heal the trauma of this senseless war. 

The European Union, together with its Member States, has demonstrated unprecedented unity 
in  condemning  Russia’s  actions  and  in  providing  support  to  Ukraine.  The  EU,  its  Member 
States  and  European  Financial  Institutions  have  together  provided  wide-ranging  support  to 
Ukraine  and  its  people,  amounting  to  EUR  70  billion  by  May  2023.  This  includes  EUR  38 
billion in financial, budget support and humanitarian assistance1, EUR 15 billion in military 
support, including through the European Peace  Facility, and EUR 17 billion made available 
by the EU and its Member States to help cater for needs of people fleeing the war. In addition, 
the  EU  Solidarity  Lanes  established  in  May  2022  had  by  end  May  2023  already  provided 
EUR  31  billion  in  export  revenue  to  Ukraine.  EU  Member  States  have  also  provided 
temporary protection for around 4 million people fleeing the country since the start of the war. 
This reflects the steadfast resolve of the Union to help Ukraine for as long as it takes.  

Since  the  start  of  the  war,  the  Union  has  also  imposed  unprecedented  sanctions  against 
Russia,  adding  to  those  imposed  by  the  EU  following  the  illegal  annexation  of  Crimea  in 
March  2014.  Work  is  ongoing  on  the  possible  use  of  frozen  assets  to  support  Ukraine’s 
recovery and reconstruction. 

In  March  2023,  the  World  Bank  together  with  the  Ukrainian  Government,  the  European 
Commission and the United Nations presented the updated assessment of damages covering a 
full year of the unprovoked Russian aggression against Ukraine2. The assessment found that 
the estimated overall reconstruction needs of Ukraine over the next 10 years amounts to EUR 
384 billion, and to EUR 142 billion for the period 2023-2027. For 2023 alone, the immediate 
fast  recovery  needs  stood  at  EUR  13  billion  for  priorities  identified  by  the  Government  of 
Ukraine,  taking  into  account  the  country’s  absorption  capacity.  These  priorities  include 
restoration  and  repair  of  energy  and  other  critical  and  social  infrastructure,  housing, 
humanitarian demining, and support to the private sector.  

In  March  2023,  the  International  Monetary  Fund  (IMF)  Board  approved  a  new  extended 
arrangement covering the period 2023-2027 under the Extended Fund Facility of about EUR 
14.5 billion. The  IMF programme aims to  anchor policies that sustain  fiscal,  external,  price 
and  financial  stability  and  support  economic  recovery,  while  enhancing  governance  and 

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This  figure  includes  around  EUR  7.8  billion  of  the  assistance  provided  by  Member  States  (excluding 
military support) according to the last update at the end of January 2023. 
Rapid Damage and Needs Assessment (RDNA 2). 

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strengthening  institutions  to  promote  long-term  growth  in  the  context  of  post-war 
reconstruction and Ukraine’s path to EU accession.  

The  Union  has  committed  to  play  a  major  role  in  Ukraine’s  reconstruction,  and  to  support 
investments  needed  for  rebuilding  the  country  and  reforms  that  will  foster  Ukraine’s  EU 
accession  path3.  These  reforms  will  gradually  align  Ukraine’s  legislation  with  the  Union 
acquis  and  foster  its  integration  into  the  Single  Market.  They  will  in  turn  help  attract 
investments  in  Ukraine  by  providing  regulatory  certainty  and  an  improved  business 
environment.  The  European  Council  invited4  the  Commission  to  make  proposals  on  this 
basis5. 

Investment  in  Ukraine’s  recovery  and  reconstruction  cannot  wait  until  the  end  of  the  war. 
Active combat has remained largely contained to the south and east of the country, where the 
greatest extent of damages has also been sustained. However, the broader economic and social 
impact  of  the  war  is  extensive,  affecting  all  of  Ukraine.  Supporting  the  recovery  of  the 
Ukrainian  economy  requires  concerted  efforts  to  help  ensure  that  economic  activity  is 
sustained,  and  basic  infrastructure  is  repaired  and  maintained.  This  in  turn  will  ensure  that 
conditions are in place for the economy to recover, generating revenues for the State budget, 
and  thereby  progressively  lowering  the  volume  of  the  international  assistance  needed. 
Supporting  Ukraine’s  reconstruction  now  also  means  maintaining  or  creating  employment 
opportunities  for  Ukrainians,  including  the  internally  displaced  and  creating  conditions  for 
refugees to return to Ukraine. 

The EU has already provided significant financial support to help Ukraine meet its short-term 
budgetary  needs,  and  for  Ukraine’s  fast  recovery,  through  highly  concessional  loans 
channelled respectively through the Emergency Macro-Financial Assistance (EUR 1.2 billion 
in  2022),  the  Exceptional  Macro-Financial  Assistance  (EUR  6  billion  in  2022),  and  the 
Macro-Financial Assistance Plus (MFA+) programme (EUR 18 billion in 2023) and a EUR 1 
billion  package 
the  Neighbourhood,  Development  and 
International Cooperation Instrument – Global Europe (NDICI) and loans from the European 
Investment Bank backed by the EU budget.  

that  combines  funds  under 

The  EU  has  eliminated  custom  tariffs  under  the  Deep  and  Comprehensive  Free  Trade  Area 
(DCFTA)  and  has  included  Ukraine  in  the  EU’s  Single  Market  Programme  to  support  its 
small  and  medium-sized  enterprises.  A  revised  priority  action  plan  for  enhanced 
implementation  of  the  EU-Ukraine  DCFTA  in  2023-2024  has  been  adopted  to  accelerate 
Ukraine’s integration in the Single Market. 

The  EU  has  opened  the  possibility  for  Ukraine  to  submit  joint  projects  with  EU  Member 
States  for  the  development  of  border-crossing  points  under  the  Connecting  Europe  Facility 
(CEF).  Measures  were  swiftly  taken  to  facilitate  the  participation  of  Ukrainian  displaced 
persons to the Erasmus for Young Entrepreneurs programme, leading to the highest number 
ever of beneficiaries from Ukraine in 2022.  

However,  given  the  scale  and  complexity  of  the  challenge  ahead,  a  longer-term  solution  is 
needed to ensure that funding is well coordinated and used efficiently, and ties recovery and 
reconstruction to Ukraine’s accession track. To this end, the Commission proposes to create 

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COM(2022) 233 final 
EUCO 21/22 
EUCO 24/22 

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a new instrument, the Ukraine Facility (the ‘Facility’), that can cater both for short-term 
recovery needs and medium-term reconstruction and modernisation of Ukraine. The Facility 
is designed as a flexible instrument, adapted to the unprecedented challenges of supporting a 
country  at  war,  while  ensuring  predictability,  transparency,  and  accountability  of  the  funds. 
This  proposal  reflects  the  risk  of  a  prolonged  conflict,  and  the  need  for  continued  macro-
financial assistance.  

The Facility is organised around three pillars: 

1. 

2. 

3. 

Pillar I covers financial support in the form of both non-repayable support and 
loan  support  to  Ukraine.  For  this  support  to  be  disbursed,  the  Government  of 
Ukraine will prepare a Plan in close consultation with the Commission, which will be 
endorsed  by  the  EU.  This  Plan  will  encompass  Ukraine’s  vision  for  the  recovery, 
reconstruction  and  modernisation  of  the  country  and  for  the  reforms  it  intends  to 
undertake as part of its EU accession process.  Funds will be provided based on the 
implementation  of  the  Plan,  which  will  be  underpinned  by  a  set  of  conditionalities 
and  a  timeline  for  disbursements.  Significant  emphasis  will  be  placed  on  public 
administration  reform,  good  governance,  the  rule  of  law,  and  sound  financial 
management,  including  fostering  efficient  and  effective  management  and  control 
systems and a strong focus on anti-corruption and anti-fraud, but also other reforms 
and  approximation  to  the  Union  acquis  that  would  underpin  the  accession  process 
and modernisation of the economy. Funds will be disbursed based on the fulfilment 
of these conditionalities.  

Pillar II is a Ukraine Investment Framework, designed to attract private and public 
investments in Ukraine’s recovery and reconstruction, supporting the implementation 
of  the  Plan.  It  will  complement  all  existing  financial  instruments  for  Ukraine 
(blending and guarantees), with the possibility of scaling them up, when conditions 
allow for it.  

Pillar III provides technical assistance and other supporting measures, including 
mobilisation  of  expertise  on  reforms,  grants  to  municipalities,  and  other  forms  of 
bilateral support normally available for pre-accession countries under the Instrument 
for  Pre-Accession  (IPA)  supporting  the  objectives  of  the  Plan.  It  may  also  support 
other  measures  aimed  at  addressing  the  consequences  of  the  war,  for  example 
relating  to  war damages. Pillar  III  will also  cover the interest  rate subsidies for the 
loans provided to Ukraine under Pillar I. 

The proposed instrument aims to equip the EU with a legal basis that would allow it to 
match  its  political  ambition  with  its  financial  leverage,  in  line  with  its  long-term 
commitment. With a Plan proposed by and agreed with Ukraine serving as the overarching 
framework  for  reforms  and  investments,  the  proposed  instrument  goes  beyond  what  can  be 
offered by existing instruments, such as macro-financial assistance and NDICI.  

The Plan will include conditions linked to: 

 

 

essential  requirements  (macro-financial  stability,  budget  oversight,  public  financial 
management, etc.). Conditions  may be defined so as  to  reflect  satisfactory progress 
towards the fulfilment of these requirements; and  

sectoral and structural reforms, and investments. The conditions will be broken down 
into intermediate steps with a timeline for completion. 

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Payments  will  occur  according  to  a  fixed  quarterly  schedule,  based  on  payment  requests 
submitted by Ukraine and following verification by the Commission of  the fulfilment of the 
relevant conditionalities. In case a conditionality is not fulfilled, the Commission will deduct a 
corresponding  amount  from  the  payment.  The  disbursement  of  the  corresponding  withheld 
funds may take place during the next payment windows and up to one year after the original 
deadline  set  out  in  the  Plan,  provided  the  conditionalities  have  been  fulfilled.  The  quarterly 
frequency  of  payment  windows  will  ensure  both  predictability  of  support  to  Ukraine  and  a 
constant policy dialogue between the Commission and Ukraine. 

Recovery  and  reconstruction  is  not  only  about  rebuilding  what  was  destroyed.  It  is  about 
building  a  modern  and  vibrant  Ukraine,  ensuring  that  the  recovery,  reconstruction  and 
modernisation is sustainable, resilient and future-proof, based on the ‘do no harm’ and ‘leave 
no one behind’ principles. It is about  investing in the transition of Ukraine towards a green, 
digital  and  inclusive  economy  that  is  progressively  aligning  with  EU  rules  and  standards. 
Ukraine should rebuild its cities in a high-quality, sustainable and inclusive way, inspired by 
the New European Bauhaus. 

Recovery  and  reconstruction  is  also  about  reconstructing  and  modernising  the  country,  and 
integrating  it  into  the  EU’s  Single  Market,  while  ensuring  that  sub-national  authorities,  in 
particular  municipalities,  are  closely  associated  and  consulted  in  this  process,  and  that  the 
decentralisation reform is at the heart of it. The peer-to-peer cooperation between the EU and 
Ukrainian  cities  and  regions  and  continued  access  to  the  cross-border  cooperation 
programmes  will  also  constitute  a  vital  part  of  Ukraine’s  recovery,  reconstruction  and 
modernisation.  Involvement  of  private  actors,  notably  businesses  and  investors,  will  be  an 
essential component of the recovery and reconstruction.  

The  proposal  is  equipped  with  a  strong  system  of  audit  and  controls  set  out  in  a  multilayer 
mechanism: first, the reform of the audit and control systems of the State will be needed as 
part of the reforms under the Plan; second, the Commission will be able to carry out checks of 
the implementation of the funds spent in relation with the Plan at any moment of the project 
cycle;  third,  an  independent  Audit  Board  will  report  to  the  Commission  on  possible 
mismanagement of funds under the whole Facility. Although this multilayer mechanism will 
apply  to  the  overall  Facility,  control  mechanisms  related  to  the  Ukraine  Investment 
Framework and to technical assistance will be based on the systems, rules and procedures of 
the 
the  International  Finance  Institutions  and 
implementation.  

implementing  partners 

involved 

in 

Finally, donor coordination will be essential to ensure that available resources are spent in the 
most effective and targeted way to match the needs of Ukraine and its people. To this end, full 
use  should  be  made  of  the  G7  Multi-agency  Donor  Coordination  Platform  for  Ukraine 
launched in  January 2023. The  Plan to  be  developed by  the Government  of Ukraine for the 
purpose  of  this  Facility  could  also  serve  to  guide  other  donors’  assistance  programming  to 
Ukraine. 

• 

Consistency with existing policy provisions in the policy area 

The support under this Facility will be consistent with and complementary to other forms of 
bilateral support for Ukraine provided through other EU instruments, including humanitarian 
aid6,  and  regional  and  cross-border,  thematic,  and  crisis  response  funding  under  the 

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Council Regulation (EC) No 1257/96 of 20 June 1996 concerning humanitarian aid 

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Neighbourhood,  Development  and  International  Cooperation  Instrument  –  Global  Europe 
(NDICI)7. The Facility will not cover humanitarian aid, defence or support to people fleeing 
the war, which will continue to be funded via existing instruments. The Facility will replace 
existing bilateral support provided to Ukraine (MFA+, NDICI bilateral allocation). It will also 
replace  support  that  Ukraine  would  have  received  under  the  Instrument  for  Pre-accession 
Assistance. 

• 

Consistency with other Union policies 

The  implementation  of  the  Regulation  will  be  consistent  with  other  areas  of  external  action 
(e.g.  humanitarian  assistance,  development  cooperation).  The  integrated  approach  of  the 
Ukraine Plan allows to cover the needs as regards recovery, reconstruction and modernisation 
of Ukraine and to tie them with Union accession requirements, to ensure consistency with all 
relevant EU policies. 

2. 

• 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

This proposal is based on Article 212 and Article 322 of the Treaty on the Functioning of the 
European  Union.  It  is  presented  by  the  Commission  in  accordance  with  the  procedure  laid 
down in Article 294 of the Treaty on the Functioning of the European Union. 

• 

Subsidiarity (for non-exclusive competence)  

The  size  of  damages  caused  to  Ukraine  by  Russia’s  war  of  aggression  is  such  that  Ukraine 
will require extensive and sustained support that no Member State could provide alone. The 
EU  is  in  a  unique  position  to  deliver  external  assistance  to  Ukraine  over  the  long  term  in  a 
timely,  coordinated  and  predictable  manner.  The  EU  can  leverage  its  borrowing  capacity  to 
lend  to  Ukraine  on  advantageous  terms  and  cover  the  costs  of  interest  rates,  as  well  as  to 
provide grants and guarantees in a multi-annual perspective.  

With  its  presence  on  the  ground  in  Ukraine  through  its  Delegation,  the  EU  can  ensure 
comprehensive access to information on developments affecting the country. The EU is also a 
party  to  most  of  the  multilateral  processes  aiming  at  addressing  challenges  that  Ukraine  is 
facing.  This  allows  the  EU  to  be  constantly  aware  of  new  needs  and  circumstances  and, 
therefore,  to  adapt  support  according  to  evolving  needs,  coordinating  closely  with  other 
national or international donors. 

The  objective  of  preparing  candidate  countries  and  potential  candidates  for  Union 
membership can also be best addressed at Union level. 

• 

Proportionality 

The  proposal  complies  with  the  proportionality  principle  in  that  it  does  not  go  beyond  the 
minimum  required  to  achieve  the  stated  objectives  at  the  European  level  and  which  is 
necessary for that purpose.  

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Regulation (EU) 2021/947 of the European Parliament and of the Council of 9 June 2021 establishing 
the  Neighbourhood,  Development  and  International  Cooperation  Instrument  –  Global  Europe, 
amending and repealing Decision No 466/2014/EU of the European Parliament and of the Council and 
repealing  Regulation  (EU)  2017/1601  of  the  European  Parliament  and  of  the  Council  and  Council 
Regulation (EC, Euratom) No 480/2009 (Text with EEA relevance) 

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The Facility is proposed as a targeted response to the specific circumstances of Ukraine due to 
the  Russian  war  of  aggression.  Its  structure  is  based  on  either  the  continuation  of  existing 
support (e.g. NDICI bilateral support), or along the same model (e.g. guarantees and financial 
instruments),  or  based  on  existing,  but  simplified 
instruments  (performance-based 
instruments), brought together under a single instrument to enhance coherence, effectiveness, 
efficiency and EU added-value. 

• 

Choice of the instrument 

In  accordance  with  Article  212  of  the  Treaty  on  the  Functioning  of  the  European  Union, 
which  sets  out  the  ordinary  legislative  procedure  to  be  used  to  adopt  measures  for 
implementing cooperation with  third countries, the proposal  takes the form  of a Regulation, 
ensuring its uniform application, binding nature in its entirety, and direct applicability. 

3. 

• 

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EX-POST 

EVALUATIONS, 

OF 

STAKEHOLDER 

Stakeholder consultations 

A formal stakeholder consultation could not be carried out due to the urgency of preparing the 
proposal  so  that  it  can  be  adopted  in  a  timely  manner  by  the  co-legislators  to  render  it 
operational as of beginning of 2024, when new needs will have to be met relating to the war 
and related damages, as well as for recovery and reconstruction. 

The EU will ensure  appropriate  communication  and visibility around  the objectives  and the 
actions delivered within the scope of this Facility, in Ukraine, within the Union, and beyond.  

• 

Impact assessment 

Due to the urgent nature of the proposal, which is designed to provide assistance to a country 
at  war  as  of  beginning  of  2024,  no  impact  assessment  could  be  carried  out.  The  ex  ante 
assessment  of  needs  proposed  to  be  covered  by  the  Ukraine  Facility  draw  upon  recent  data 
from  the  International  Monetary  Fund  and  from  the  updated  Ukraine  Rapid  Damage  and 
Needs Assessment8, which was prepared by the World Bank together with the Commission, 
the UN and the Ukrainian Government. An analytical document in the form of a staff working 
document  presenting  the  evidence  behind  the  proposal  and  cost  estimates  will  be  prepared 
within three months of the initiative’s adoption. 

• 

Fundamental rights 

A pre-condition for granting support under the instrument is that Ukraine continues to respect 
effective  democratic  mechanisms  and  its  institutions,  including  a  multi-party  parliamentary 
system,  the  rule  of  law,  and  to  guarantee  respect  for  human  rights,  including  the  rights  of 
persons  belonging  to  minorities.  The  commitment  to  reforms  and  the  strong  political  will 
expressed  by  the  Ukrainian  authorities  are  positive  signs,  in  particular  as  evidenced  by  the 
European  Council  granting  candidate  status  to  Ukraine  in  June  2022  and  by  the  renewed 
successful  completion  of  the  structural  policy  conditionality  attached  to  the  recent  macro-
financial  assistance  (MFA)  operations  to  Ukraine.  Since  the  Russian  aggression,  the 

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Ukraine Rapid Damage and Needs Assessment: February 2022 - February 2023 (English). Washington, 
D.C.: 
Group. 
http://documents.worldbank.org/curated/en/099184503212328877/P1801740d1177f03c0ab1800575566
15497 

World 

Bank 

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Ukrainian  authorities  have  shown  an  impressive  degree  of  resilience  and  have  remained 
committed  to  pursue  these  reforms  in  a  transparent  manner,  while  working  towards  EU 
standards and in line with the country’s path towards EU integration. 

4. 

BUDGETARY IMPLICATIONS 

The  maximum  resources  for  the  implementation  of  the  Facility  shall  be  EUR  50  billion  (in 
current prices) for 2024-2027 for all types of support. The Facility will be funded by: 

(a) 

(b) 

loans  guaranteed  over  and  above  the  multiannual  financial  framework  (MFF) 
ceilings; 

a  new  special  instrument,  over  and  above  the  ceilings  of  the  MFF,  the  Ukraine 
Reserve, as part of the amendment to Council Regulation (EU, Euratom) 2020/2093. 
Such Reserve may support all expenditure other than in the form of loans, including 
non-repayable support, grants and provisioning for guarantees. 

The amendment to the MFF Regulation9 also establishes that the Ukraine Reserve shall aim at 
providing at least EUR 2.5 billion in current prices as an annual indicative amount.  

The  Ukraine  Reserve  may  be  mobilised  by  the  European  Parliament  and  the  Council in  the 
framework of the budgetary procedure, provided for in Article 314 TFEU.  

Member States, third countries, international organisations, international financial institutions 
or  other  sources  may  provide  additional  financial  contributions  to  the  Facility.  Such 
contributions shall constitute external assigned revenue within the meaning of Article 21(2), 
points  (a)(ii),  (d),  and  (e)  of  Regulation  (EU,  Euratom)  2018/1046.  Additional  amounts 
received as external assigned revenue within the meaning of Article 21(5) of Regulation (EU, 
Euratom) 2018/1046 under the relevant Union legal acts in relation to restrictive measures in 
view of Russia's actions destabilising the situation in Ukraine will be added to the resources 
for the Facility. 

5. 

• 

OTHER ELEMENTS 

Implementation plans and monitoring, evaluation and reporting arrangements 

The Regulation sets out detailed provisions relating to monitoring and reporting.  

The Commission will continuously monitor the implementation of the Facility. Specifically, a 
monitoring system should be put in place by Ukraine and Ukraine will be expected to report 
to the Commission annually on its implementation of the part of the Ukraine Plan covered by 
the  Facility.  This  will  include  reporting  on  Ukraine’s  internal  control  system  and  on  any 
amounts unduly paid or misused, and eventually recovered by the EU. Proportionate reporting 
requirements will be required of recipients of Union funding implemented under the second 
and third pillars of the Facility.  

The  Commission  will  provide  the  European  Parliament,  the  Council  and  the  Committee 
referred to in Article 39 of the Regulation with an annual assessment of the implementation of 
funds provided under the Facility. 

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COM(2023) 337 final 

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The Commission will also carry out an ex-post evaluation of the Regulation. 

• 

Detailed explanation of the specific provisions of the proposal 

This Regulation establishes the Ukraine Facility.  

Chapter I (General provisions) covers the subject matter and structure of the Facility in three 
pillars (Article 1), the definitions (Article 2), the general and specific objectives of the Facility 
(Article 3), the general principles (Article 4) and the precondition for support (Article 5).  

Chapter II (Financing and implementation) sets the financial envelope of the Facility in non-
repayable financial support and loans (Article 6), and lays down the procedures for potential 
additional  contributions  from  Member  States,  third  countries  or  other  sources  (Article  7). 
Article  8  details  the  forms  of  implementation  for  the  pillars  of  the  Facility,  i.e.  direct  and 
indirect  management  in  accordance  with  the  Financial  Regulation.  Articles  9  and  10 
respectively  cover  the  Framework  agreement  to  be  signed  between  the  Commission  and 
Ukraine  laying  down  in  particular  the  audit  and  control  provisions,  and  the  financing 
agreements to be signed under the first and third pillar, including obligations and conditions 
for the disbursement of payments. Rules on eligibility of recipients and provisions for carry-
overs,  annual  instalments,  commitment  appropriations,  surpluses  from  the  budgetary 
guarantee, repayments and revenue generated by financial instruments are covered in Articles 
11 and 12,  respectively.  Article 13  foresees the possibility of providing support  to  maintain 
the macro-financial stability of Ukraine under exceptional circumstances, especially related to 
the  war,  and  subject  to  the  fulfilment  of  the  precondition  under  Article  5.  This  exceptional 
financing would cease as soon as the fulfilment of conditions becomes possible again. 

Chapter III (Ukraine Plan) details the functioning of the first pillar of the  Facility, beginning 
with  the  role  of  the  Ukraine  Plan  (Article  14)  as  the  overarching  framework  for  the  three 
pillars and to  achieve the objectives of the  Facility and the  general  principles for financing, 
including  the  types  of  conditions  for  disbursements  (Article  15).  Articles  16  and  17  present 
the  Ukraine  Plan  to  be  submitted  by  Ukraine,  the  procedure  for  doing  so,  and  the  elements 
that the Plan should contain, including reforms and investments to be financed by the Facility, 
the  involvement  of  the  sub-national  authorities,  and  the  systems  to  prevent  and  correct 
irregularities, fraud, corruption and conflicts of interests, when using the funds provided under 
the Facility. The Commission will proceed to assess the Plan according to the criteria laid out 
in  Article  18,  and  make  a  proposal  for  the  Council  implementing  decision  as  described  in 
Article 19, which will lay down, among others, the indicative non-repayable financial support 
and indicative amount of the loan support to be disbursed against the satisfactory fulfilment of 
the conditions, the time limit for such fulfilment, and the pre-financing for which Ukraine will 
be eligible. Article 20 provides for the possibility for the Commission or Ukraine to make a 
proposal  to  amend  the  Ukraine  Plan.  Article  21  covers  the  loan  agreement  to  be  signed 
between  the  Commission  and  Ukraine,  and  the  rules  governing  the  borrowing  by  the 
Commission on the markets. Article 22 provides for the possibility for Ukraine to request the 
Commission to bear the borrowing costs subsidy, which will be covered under the third pillar 
of the Facility. The rules for the payment of pre-financing to Ukraine, subject to the respect of 
the  precondition  described  in  Article  5,  are  laid  out  in  Article  23.  Article  24  provides  the 
conditions  and  procedure  for  the  disbursement  to  Ukraine  of  exceptional  bridge  financing. 
Article 25 details the procedure for the disbursements under the first pillar, upon fulfilment of 
the conditions set out in the Plan. Payments will take place on a quarterly basis, following the 
submission by Ukraine of a payment request demonstrating the satisfactory fulfilment of the 
relevant conditions. In case of a negative assessment by the Commission, a part of the amount 
corresponding to  the conditions  not  fulfilled will be withheld. The payment  withheld  would 

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only be disbursed once  Ukraine has duly justified, as part of a subsequent payment request, 
that  it  has  taken  the  necessary  measures  to  ensure  satisfactory  fulfilment  of  the  relevant 
conditions. Article 26 provides for the obligation by Ukraine to  publish the data on persons 
and entities receiving amounts of funding exceeding the equivalent  of EUR 500,000 for  the 
implementation of reforms and investments specified in the Ukraine Plan, and the categories 
of data to be published. 

Chapter IV (Ukraine Investment Framework) describes the second pillar of the Facility, which 
aims to support investments and provide access to finance conducive to the implementation of 
the Ukraine Plan. The scope and structure of the Framework are defined in Article 27. Article 
28 provides for the possibility of additional contributions from Member States, third countries 
and third parties. The Chapter also details the Ukraine Guarantee (Articles 29 and 30) and sets 
its provisioning rate and the procedure for its review (Article 31). 

Chapter V (EU accession assistance and support measures) covers the implementation of the 
third pillar of the Facility, which will support Ukraine’s progressive alignment to the Union 
acquis  and  progressive  integration  into  the  Single  Market  with  a  view  to  future  Union 
membership,  as  well  as  strengthen  the  capacities  of  stakeholders  and  local  authorities  and 
provide funding for initiatives and bodies involved in supporting and enforcing international 
justice in Ukraine (Article 32). 

the  Commission  and  Ukraine 

to  ensure  effective  controls  over 

Chapter  VI  (Protection  of  the  financial  interests  of  the  Union)  lays  out  the  provisions  to  be 
followed  by 
the 
implementation  of  the  Facility.  Article  33  details  the  obligations  to  be  reflected  in  the 
Framework,  Financing  and  Loan  agreements,  which  will  include  appropriate  measures  to 
prevent, detect and correct fraud, corruption, conflicts of interests and irregularities affecting 
the financial interests of the Union, to avoid double funding and to take legal action to recover 
funds  that  have  been  misappropriated,  the  collection  of  adequate  data  on  the  recipients  of 
funds under the Facility and the rights to be granted to the Commission, the European Anti-
Fraud Office (OLAF), and the European Public Prosecutor’s Office (EPPO) where applicable. 
Article 34 establishes an Audit Board to be composed of independent members appointed by 
the Commission, which will assist the Commission in protecting the financial interests of the 
Union  and  in  ensuring  the  sound  management  by  Ukraine  of  Union  funding  under  the 
Facility. 

Chapter  VII  (Work  programmes,  monitoring,  reporting  and  evaluation)  covers  the  work 
programmes through which assistance under the Facility will be implemented (Article 35), the 
provisions  for  setting  out  the  indicators  and  results  frameworks  used  in  the  monitoring  and 
evaluation (Article 36), and the ex-post evaluation of the Facility (Article 37). 

Chapter  VIII  (Final  provisions)  lays  down  the  exercise  of  the  delegation  of  powers  with 
respect  to  the  provisioning  rate  (Article  38),  the  comitology  procedure  (Article  39),  the 
provisions on information, communication and publicity (Article 40) and on entry into force 
(Article 41). 

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2023/0200 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on establishing the Ukraine Facility 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 212 and Article 322(1) thereof, 

Having regard to the proposal from the European Commission, 

Having regard to the opinion of the Court of Auditors, 

Acting in accordance with the ordinary legislative procedure, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

Since  2014,  Ukraine  has  embarked  on  an  ambitious  reform  path  leading  to  a 
progressive  integration  with  the  European  Union,  as  materialised  in  the  signature  on 
27 June 2014 of an association agreement between the Union and Ukraine, including a 
Deep and Comprehensive Free Trade Area, which entered into force on 1 September 
2017. 

Since the beginning of Russia’s unprovoked and unjustified war of aggression against 
Ukraine  on  24  February  2022,  the  Union,  its  Member  States  and  European  financial 
institutions have mobilised unprecedented support  to  Ukraine’s economic, social and 
financial  resilience,  combining  support  from  the  Union  budget,  including  the 
exceptional  macro-financial  assistance  and  support  from  the  European  Investment 
Bank and the European Bank for Reconstruction and Development, fully or partially 
guaranteed  by  the  Union  budget,  as  well  as  further  financial  support  by  Member 
States. 
The  European  Council  of  23  June  2022  decided10  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. 

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 
Council11 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. 

10 
11 

European Council Conclusions, 23-24 June 2022; EUCO 24/22. 
Regulation  (EU)  2022/2463  of  the  European  Parliament  and  of  the  Council  of  14  December  2022 
establishing an instrument for providing support to Ukraine for 2023 (macro-financial assistance +); (OJ 
L 322, 16.12.2022, p. 1–14). 

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(5) 

(6) 

(7) 

(8) 

(9) 

The  Union  is  also  providing  significant  financial  support  through  an  additional 
package  combining  funds  under  the  Neighbourhood,  Development  and  International 
Cooperation Instrument – Global Europe (NDICI) established under Regulation (EU) 
2021/947 of the European Parliament and of the Council12 and loans by the European 
Investment Bank. 
In  addition,  in  its  Decision  (CFSP)  2021/50913,  the  Council  decided  on  off-budget 
assistance measures to support the Ukrainian armed forces under the European Peace 
Facility, in the amount of EUR 5,6 billion, and 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  unprecedented  in-kind  emergency  response  via  the  Union 
Civil  Protection  Mechanism  under  Decision  No  1313/2013/EU14  of  the  European 
Parliament  and  of  the  Council,  as  amended  by  Regulation  (EU)  2021/836  of  the 
European Parliament and the Council15, constituting the largest  emergency  operation 
since the creation of that mechanism. 

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 end May 2023.  

Russia’s war of aggression against Ukraine has caused Ukraine damages amounting to 
more than EUR 270 billion16 as of 24 February 2023, and reconstruction costs being 
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  State  services  has  increased 
markedly.  Such  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. 

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 European Union. 

(10)  Given that a residual gap remains in Ukraine’s financing needs for at least until 2027, 
flexible  support  to  the  Ukrainian  government  to  maintain  its  functions  as  well  as  to 
support  the  recovery,  reconstruction  and  modernisation  of  the  country  has  to  be 
mobilised. 

12 

13 

14 

15 

16 

Regulation (EU) 2021/947 of the European Parliament and of the Council of 9 June  2021 establishing 
the  Neighbourhood,  Development  and  International  Cooperation  Instrument  –  Global  Europe, 
amending  and  repealing  Decision  No  466/2014/EU  and  repealing  Regulation  (EU)  2017/1601  and 
Council Regulation (EC, Euratom) No 480/2009 (OJ L 209, 14.6.2021, p. 1). 
Council  Decision  (CFSP)  2021/509  of  22  March  2021  establishing  a  European  Peace  Facility,  and 
repealing Decision (CFSP) 2015/528, (OJ L 102 24.3.2021, p. 14). 
Decision No 1313/2013/EU of the European Parliament and of the Council of 17 December 2013 on a 
Union Civil Protection Mechanism (OJ L 347, 20.12.2013, p. 924–947). 
Regulation (EU) 2021/836 of the European Parliament and of the Council of 20 May 2021 amending 
Decision No 1313/2013/EU on a Union Civil Protection Mechanism (OJ L 185, 26.5.2021, p. 1). 
Rapid Damage and Needs Assessment, prepared by the World Bank, European Commission and United 
Nations. See World Bank Document. 

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(11)  Given the damage from Russia’s war of aggression to the Ukrainian economy, society 
and infrastructure, the support to the country to maintain its functions, as well as short 
relief,  fast  recovery,  reconstruction  and  modernisation  of  Ukraine  will  require 
comprehensive support to rebuild the economy, to create the foundations of a free and 
prosperous  country,  anchored  in  European  values,  well  integrated  into  the  European 
and  global  economy,  and  progressing  well  on  its  path  of  accession  to  the  European 
Union. 

(12) 

In this context, it is necessary to set up a 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’), providing a balance between flexibility and programmability of the Union’s 
response 
recovery,  reconstruction  and 
modernisation  needs,  while  at  the  same  time  supporting  Ukraine’s  reforms  effort  as 
part its accession path to the Union. 

to  address  Ukraine’s  financing  gap, 

(13)  The  Ukraine  Facility  should  be  underpinned  by  a  coherent  and  prioritised  plan  for 
reconstruction  (the  ‘Ukraine  Plan’),  prepared  by  the  Government  of  Ukraine, 
providing a structured and predictable framework for the recovery, reconstruction and 
modernisation of Ukraine, clearly articulated with Union accession requirements. 

(14)  Union support to Ukraine from 2024 to 2027 should be provided primarily and mainly 
under  the  Ukraine  Facility,  ensuring  a  consistent  approach  through  a  unified 
instrument,  by  replacing  or,  where  appropriate,  complementing  activities  under  the 
existing instruments. 

(15) 

In  this  regard,  Union  support  under  the  Facility  should  replace  the  bilateral  support 
provided  under  the  Neighbourhood,  Development  and  International  Cooperation 
Instrument – Global Europe (NDICI) established under Regulation (EU) 2021/947 of 
the European Parliament and of the Council. It is nevertheless important to ensure that 
Ukraine  can  continue  to  benefit  from  regional,  thematic,  rapid  response,  and  other 
forms  of support under  NDICI, including  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. 

(16)  Humanitarian  aid,  defence  or  support  to  Member  States  providing  protection  for 
Ukrainian refugees fleeing the war should be provided outside the Facility. In addition, 
Ukraine may continue to benefit from relevant existing Union programmes. 

(17)  The  Facility  should  contribute  to  closing  the  funding  gap  of  Ukraine  until  2027,  by 
providing grants and highly concessional financial relief in a predictable, continuous, 
orderly and timely manner. The assistance should support macro-financial stability in 
Ukraine, and ease Ukraine’s external financing constraints. 

(18)  Under  the  new  Facility,  investment  in  Ukraine’s  recovery,  reconstruction  and 
modernisation should start as a matter of urgency to provide decent living conditions 
for  the  Ukrainian  population,  to  ensure  generation  of  employment  and  revenues  and 
progressively lower the volume of international assistance needed. 

(19)  The Facility  should tie the  recovery, reconstruction and modernisation closely to the 
Union  perspective,  by  linking  financial  support  to  the  fulfilment  of  reforms  and 
investments in view of accession. 

(20)  The  medium-term  perspective  provided  by  the  Ukraine  Plan  through  a  single 
instrument should also encourage Ukraine to channel investments and reforms toward 

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the transition to a green, digital and inclusive economy, and help mobilise like-minded 
donors for multiannual contributions to support Ukraine. 

(21)  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. Regional and local 
administrations  are also  expected to  play  an important  role. Peer-to-peer  cooperation 
and  programmes  embedded  in  partnerships  between  cities  and  regions  in  the  Union 
and  those  in  Ukraine  should  enrich  and  accelerate  the  recovery,  reconstruction  and 
modernisation process. 

(22)  The  Union  should  also  foster  close  consultation  and  association  of  local  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  their  participation  in  the  recovery,  reconstruction  and  modernisation  of  Ukraine, 
based on sustainable development and through the implementation of the Sustainable 
Development  Goals  at  local  level.  The  Union  should  recognise  the  multiple  roles 
played  by  the  local  authorities  as  promoters  of  a  territorial  approach  to  local 
development,  including  decentralisation  processes,  participation  and  accountability, 
and further enhance its support for local authorities’ capacity building. 

(23)  The Union should provide support to the transition towards accession for the benefit of 
Ukraine,  drawing  on  the  experience  of  the  Member  States.  Such  cooperation  should 
focus particularly on the sharing of experience that was acquired by the Member States 
during their own reform processes. 

(24)  Support  under  the  Facility  should  also  build  on  and  maximise  synergies  with  key 
organisations supporting Ukraine’s reforms  and reconstruction, such as the  European 
Investment Bank, the European Bank for Reconstruction and Development, the World 
Bank,  the  Organisation  for  Economic  Co-operation  and  Development,  and  the 
International Monetary Fund. 

(25)  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  only  be  provided,  through  a  Council 
implementing decision upon a proposal by the Commission, if it is concluded that it is 
impossible for Ukraine to fulfil the conditions attached to the forms of support under 
this Regulation, when it is the beneficiary of the support, and should cease as soon as 
the  fulfilment  of  the  conditions  becomes  possible  again.  Such  financing  should  not 
affect  funding  from  other  specific  Union  instruments  which  should  be  mobilised  in 
case of natural disasters or other humanitarian or civil protection emergencies. 

(26)  The enlargement policy framework defined by the European Council and the Council, 
the  association  agreement,  partnership  and  cooperation  agreement,  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  the  assistance  under  the  Facility  and 
the enlargement policy framework. 

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(27)  Article 49 of the Treaty on European Union 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  Member  States  in  a  society  in 
which  pluralism,  non-discrimination,  tolerance,  justice,  solidarity  and  equality 
between women and men prevail. 

(28)  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. 

(29) 

It  is  in  the  common  interest  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. Considering Ukraine as candidate to accession is a strategic 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  to  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. 

(30)  Embracing  and  committing  to  core  European  values  is  a  choice  and  is  essential  for 
Ukraine’s  aspiration  to  Union  membership.  In  line  with  this,  Ukraine  should  take 
ownership and fully commit to European values as well as to upholding a global order 
based  on  rules  and  values  and  vigorously  pursuing  the  necessary  reforms  in  the 
interest of its people. 

(31)  Reconstruction from  the damage caused by the  war of Russian aggression cannot  be 
limited to rebuilding what was destroyed as it was before the war. The reconstruction 
offers  an  opportunity  to  support  Ukraine  in  its  process  of  integration  into  the  Single 
Market  and  in  accelerating  its  sustainable  green  and  digital  transitions,  in  line  with 
Union policies. The Facility should promote reconstruction in a way that modernises 
and improves Ukraine’s economy and society, building on Union rules and standards, 
by  investing  in  the  transition  of  Ukraine  towards  a  green,  digital  and  inclusive 
economy  and  in  the  recovery,  reconstruction  and  modernisation  of  its  critical 
infrastructure, productive capacity and human capital in a resilient way. 

(32)  The Facility should contribute to the adherence to the Paris Agreement and the United 
Nations  Framework  Convention  on  Climate  Change,  the  United  Nations  Convention 
on Biological Diversity and the United Nations Convention to Combat Desertification 
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  coherent  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. It should also be coherent with the objective 

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to  increase  the  ability  to  adapt  to  the  adverse  effects  of  climate  change  and  foster 
climate resilience, and with the support of biodiversity conservation, circular economy 
and  zero-pollution.  Particular  attention  should  be  given  to  actions  that  create  co-
benefits  and  meet  multiple  objectives,  including  for  climate,  biodiversity  and  the 
environment. 

(33) 

In this context, measures funded under the Facility should be guided by the principles 
of ‘do no harm’ and ‘leaving no one behind’. 

(34)  The implementation of this Regulation should be guided by the principles of equality 
and  non-discrimination,  as  elaborated  in  the  Union  of  Equality  strategies.  It  should 
promote  gender  equality  and  the  empowerment  of  women  and  girls,  and  seek  to 
protect  and  promote  women’s  and  girls’  rights  in  line  with  the  EU  Gender  Action 
international  conventions.  The 
Plans  and  relevant  Council  conclusions  and 
implementation of the Facility should be in line with the United Nations Convention 
on the Rights  of Persons with  Disabilities and  ensure accessibility in  its  investments 
and technical assistance. 

(35)  Strengthening  the  rule  of  law,  including  the  independence  of  the  judiciary,  the  fight 
against  corruption,  money  laundering  and  organised  crime,  as  well  as  transparency, 
good governance at all levels, safeguarding the free and pluralistic media and fighting 
disinformation, 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 Ukraine Facility 
should address those issues as early as possible. 

(36) 

In  accordance  with  the  principle  of  participatory  democracy,  the  Union  should 
encourage  the  strengthening  of  parliamentary  capacities,  parliamentary  oversight, 
democratic procedures and fair representation in Ukraine. 

(37)  Enhanced  strategic  and  operational  cooperation  between  the  Union  and  Ukraine  on 
security  is  pivotal  to  addressing  effectively  and  efficiently  the  threats  of  security, 
organised crime and terrorism. 

(38)  Actions  under  the  Ukraine  Facility  should  also  support,  where  appropriate, 
confidence-building  measures  and  processes  that  promote  justice,  truth-seeking, 
reparations  and  guarantees  of  non-recurrence  as  well  as  collection  of  evidence  of 
crimes committed during the war. 

(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 Ukraine Facility, including to 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  Ukraine  Facility  should  be  to  assist  Ukraine  in 
addressing  the  social,  economic  and  environmental  consequences  of  the  war, 
contributing  to  the  reconstruction,  including  recovery,  and  modernisation  of  the 
country;  in  fostering  social,  economic  and  environmental  resilience  and  progressive 
integration into the Union and global economy and markets; and in preparing Ukraine 

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(42) 

for  future  membership  of  the  Union  by  supporting  its  accession  process.  Such 
objectives should be pursued in a mutually reinforcing manner. 

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 growth, ensuring equality of, and access to, opportunities 
and  social  protection,  protecting  vulnerable  groups  and  improving  living  standards. 
The Facility should also contribute to fighting poverty and tackling unemployment and 
lead to quality job creation, the inclusion and integration of disadvantaged groups. The 
Facility  should  provide  for  investment  opportunities  in  skills  including  through 
vocational  education  and  training  aiming  to  prepare  the  workforce  to  the  digital  and 
green  transitions.  It  should  also  enable  the  strengthening  of  social  dialogue, 
infrastructure and services. 

(43)  The  Facility  should  ensure  consistency  with,  and  complementarity  to,  the  general 
objectives  of  Union  external  action  as  laid  down  in  Article  21  of  the  Treaty  on 
European Union, 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 and good 
governance. 

(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 to short-
term  recovery  and  reconstruction  priorities,  support  to  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 (i) financial support to 
the Ukrainian State 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; (ii) a 
Ukraine  Investment  Framework  to  mobilise  investments  and  enhance  access  to 
finance; (iii) accession assistance to mobilise technical expertise and capacity building. 

(46)  As the recovery, reconstruction and modernisation needs are substantial, and cannot be 
covered by the Union budget alone, both public and private investments should play a 
role.  The  Facility  should  enable  the  mobilisation  of  both  public  and  private 
investments and should allow for the possibility to scale up support for investments in 
long-term reconstruction when circumstances allow, also considering implementation 
and absorption capacity of Ukraine. 

(47)  The overall maximum amount for the Union support to 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. 

(48)  As for the Union support,  other than in  the form of loans, this  Regulation should be 
financed  by  and  in  accordance  with  the  Ukraine  Reserve,  as  proposed  in  the 
amendment to Council Regulation (EU, Euratom) 2020/209317, up to EUR 50 billion 
for  the  period  2024  to  2027.  Such  maximum  amount  does  not  constitute  the  prime 
reference amount, within the meaning of point 18 of the Interinstitutional Agreement 
of  December  2020  between  the  European  Parliament,  the  Council  of  the  European 

17 

COM(2023)337 final. 

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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, for the 
European Parliament and the Council during the annual budgetary procedure. 

(49)  The  mobilisation  of  the  Ukraine  Reserve  should  aim  at  providing  at  least  an  annual 
indicative  amount  for  support,  other  than  in  the  form  of  loans,  in  accordance  with 
Article  10b  of  the  proposed  amendment  to  Council  Regulation  (EU,  Euratom) 
2020/209318. 

(50) 

In the framework of the Union’s restrictive measures, adopted on the basis of Article 
29  of  the  Treaty  on  European  Union  (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 entities, and entities owned or controlled by them, 
therefore cannot be supported by the Facility. 

(51)  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. 

(52)  For  the  part  of  the  Ukraine  Facility  support  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 
Council19.  As  a  consequence,  the  amendment  to  Council  Regulation  (EU,  Euratom) 
2020/209320  proposes  to  mobilise  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. 

(53)  While respecting the principle that the Union budget is set annually, the possibility to 
apply  the  flexibilities  in  accordance  with  Regulation  (EU,  Euratom)  2018/1046  for 
other policies should be ensured, namely for carry overs and re-commitments of funds, 
to ensure efficient use of the Union funds, thus maximising the Union funds available 
under the Facility. 

(54)  Restrictions of eligibility in award procedures under the Facility should be allowed on 
account  of  the  specific  nature  of  the  activity  or  when  the  activity  affects  security  or 
public order. 

(55) 

In order to ensure an efficient implementation of the Facility, including the facilitation 
of Ukraine’s integration in European value chains, all supplies and materials financed 
and  procured  under  this  Facility  should  originate  from  Member  States,  Ukraine, 
contracting  parties  to  the  Agreement  on  the  European  Economic  Area,  countries 
covered  by  Annex  I  to  Regulation  (EU)  2021/947  and  Annex  I  to  Regulation  (EU) 
2021/1529  of  the  European  Parliament  and  of  the  Council,  and    countries  for  which 
reciprocal access to external assistance in Ukraine is established by the Commission, 

18 
19 

20 

Ibidem. 
Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on 
the  financial  rules  applicable  to  the  general  budget  of  the  Union,  amending  Regulations  (EU)  No 
1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) 
No  1316/2013,  (EU)  No  223/2014,  (EU)  No  283/2014,  and  Decision  No  541/2014/EU  and  repealing 
Regulation (EU, Euratom) No 966/2012 (OJ L 193 30.7.2018, p. 1). 
COM(2023) 337 final 

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17 

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unless the supplies and materials cannot be sourced at reasonable conditions in any of 
those countries. 

(56)  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, 
the  other  Union’s  external  financing 
consistency  and  complementarity  with 
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, it should be provided that the Facility should be able to contribute to actions 
under other programmes. 

(57)  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. 

(58) 

In view of the need to coordinate international support to 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)(a)(ii),  (d), 
and (e) of Regulation (EU, Euratom) 2018/1046. 

(59)  The  Commission  and  the  Member  States  should  ensure  the  compliance,  coherence, 
consistency  and  complementarity  of  their  assistance,  in  particular  through  regular 
consultations and frequent exchanges of information during the different phases of the 
assistance  cycle,  including  at  local  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.  In  this  regard,  the  Multi-Agency  Donor  Coordination  Platform  should 
be used as an already established forum for such exchange. 

(60)  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 procedure 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.  

(61)  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)  of  Regulation  (EU,  Euratom) 
2018/1046. 

(62)  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. Financing and loan agreements should 
also be concluded with Ukraine, where appropriate depending on each pillar, to define 
conditions for releasing funds. 

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(63)  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  should  constitute  internal  assigned 
revenue to the Facility or its successor programme. 

(64)  By way of derogation from Article 213(4)(a) of Regulation (EU, Euratom) 2018/1046, 
it  is  appropriate  that  surplus  from  the  provisions  for  the  Ukraine  Guarantee  should 
constitute internal assigned revenue to the Facility or its successor programme. 

(65)  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  this  pillar  should  be  provided  upon  satisfactory  fulfilment  of 
conditions set out in the Plan. 

(66)  Ukraine  should  prepare  the  Plan  as  a  coherent,  comprehensive  and  adequately 
balanced  response  to  rebuilding  and  modernising  Ukraine,  supporting  its  economic, 
social and environmental recovery 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 Plan as prepared covers its recovery, reconstruction and modernisation 
needs in an integrated manner, identifying to what extent the measures of the Plan are 
expected  to  be  financed  by  the  Union  through  the  Facility.  In  preparing  the  Plan, 
Ukraine  should  take  into  account  support  provided  under  other  Union  programmes. 
Ukraine  should  develop  its  Plan  ensuring  that  other  donors  are  able  to  contribute  to 
supporting  the  measures  of  the  Plan,  including  by  increasing  the  funding  available 
under the Facility. 

(67)  While the Ukraine Plan should constitute the basis for the support provided under the 
first  pillar  of  the  Facility,  it  should  also  provide  a  reference  for  the  support  to  be 
provided  under  the  second  and  third  pillars  of  the  Facility.  The  measures  financed 
under the second and third pillar should support the objectives and the implementation 
of the Plan. 

(68)  The  Ukraine  Plan  should  include  reform  and  investment  measures,  along  with  the 
qualitative  and  quantitative  steps  that  warrant  satisfactory  fulfilment  of  those 
measures,  and  an  indicative  timetable  for  the  implementation  of  those  measures. 
Measures started from 1 January 2023 onwards should be eligible. 

(69)  The  Plan  should  set  out  conditions  reflecting  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  planned  for  no  later  than  31 
December 2027, although the overall completion of the measures to which such steps 
refer may 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 the accession to the Union, the  Plan should, in particular, include conditions 
linked to (i) 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  (ii)  sectoral  and  structural  reforms  and  investments 
set out in the Plan. Payments should be structured accordingly around such categories 
of conditions, reflecting the objectives of the Facility. 

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(70)  The  preparation  and  implementation  by  Ukraine  of  the  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  consultation  with  regional,  local,  urban  and 
other  public  authorities, in  accordance  with  the  multi-level  governance  principle  and 
taking into account a bottom-up approach. In this context, the Plan should in particular 
enhance the economic, social, environmental and territorial development of Ukraine’s 
regions  and  municipalities,  support  the  decentralisation  reform  across  Ukraine  and 
convergence towards the Union’s standards; it 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. 

(71)  The  Plan  should  also  include  an  explanation  of  Ukraine’s  system  to  effectively 
prevent,  detect  and  correct  irregularities,  corruption,  fraud  and  conflicts  of  interests, 
when  using  the  funds  provided  under  the  Facility,  and  the  arrangements  that  aim  to 
avoid double funding from the Facility and other Union programmes as well as other 
donors. Measures under the Plan should, where appropriate, contribute to ensuring an 
efficient  management  and  control  system.  Such  measures  should  be  implemented  by 
Ukraine  by  an  indicative  date  which  could  be  set,  as  appropriate  depending  on  each 
measure, over the course of the lifetime of the Facility. 

(72)  The Commission should assess the Ukraine Plan based on the list of criteria set out in 
this  Regulation.  In  view  of  the  importance  of  the  financial  effects  of  the  support  to 
Ukraine Plan, implementing powers should be conferred on the Council. In case of a 
positive  assessment  of  the  Plan,  the  Commission  should  submit  a  proposal  for  the 
approval of the Plan by the Council. 

(73)  Given  the  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 make a proposal to amend the Council implementing decision, 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 may, in agreement with Ukraine, also make a proposal to amend the 
Council  implementing  decision,  in  particular  to  take  into  account  a  change  of  the 
amounts available. Ukraine should also be able to make a reasoned request to amend 
the  Plan,  including  by  proposing  addenda  where  relevant,  to  take  into  account 
additional funding available from other donors or from other sources, such as revenue 
generated on frozen and immobilised Russian assets. 

(74)  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 the 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. 

(75)  Given  the  situation  of  Ukraine  caused  by  Russia’s  war  of  aggression  and  to  support 
Ukraine 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 

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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. 

(76) 

It should be possible for Ukraine to request the interest rate subsidy and the waiver of 
administrative costs each year. 

(77)  The financial liability from loans under this Regulation should not be supported by the 
External  Action  Guarantee,  by  derogation  from  Article  31(3),  second  sentence,  of 
Regulation (EU) 2021/947. Loans type of support 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  financial  assistance  in  the  form  of  loans 
under the Facility, as proposed to be guaranteed over and above the ceilings, and, by 
derogation  from  Article  211(1)  of  Regulation  (EU,  Euratom)  2018/1046,  no 
provisioning rate should be set. 

(78) 

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  verification  by  the 
Commission  of  the  satisfactory  fulfilment  of  the  relevant  conditions.  In  case  a 
condition is not fulfilled in accordance with the indicative timeline set in the decision 
approving  the  Plan,  the  Commission  should  deduct  from  the  payment  an  amount 
corresponding  to  those  conditions.  The  disbursement  of  the  corresponding  withheld 
funds could take place during the next payment window and up to twelve months after 
the  original  deadline  set  out  in  the  indicative  timeline,  provided  the  conditions  have 
been fulfilled. 

(79) 

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  non-repayable  financial 
support and loan in the form of a pre-financing, subject to availability of funding and 
to the respect of the precondition for the support to Ukraine under the Facility. 

(80)  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. 

(81)  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  exceeding  the  equivalent  of  EUR  500  000  for  the 
implementation  of  reforms  and  investments  specified  in  the  Ukraine  Plan.  The 
information should not be published 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 and  the access for the Commission 
and OLAF, including as regards the format of the information. 

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(82)  Under pillar  II  of the Facility, an investment  framework should be set  up, aiming  to 
support  recovery  and  reconstruction  investments  undertaken  by  private  sector 
companies,  municipalities,  state-owned  enterprises  or  other  actors.  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. 

(83)  The 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 in indirect management, notably drawing on the financial and 
technical  capacities  of  international  financial  institutions  and  European  development 
finance institutions, 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  will  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 under Regulation (EU) 2021/947. 

(84)  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  Article  211(2),  second  sentence,  of  the  second 
subparagraph  of  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 selection and implementation of the financing and 
investment  operations  supporting  the  objectives  of  the  Facility,  instead  of  reflecting 
the  financial  statement  referred  to  in  Article  211(2),  second  sentence,  of  the  second 
subparagraph of Regulation (EU, Euratom) 2018/1046. 

(85) 

In  order  to  efficiently  use  the  funds  under  this  pillar,  the  power  to  adopt  acts  in 
accordance with Article 290 of the Treaty on the Functioning of the European Union 
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.  The 
Commission,  when  preparing  and  drawing  up  delegated  acts,  should  ensure  a 
simultaneous,  timely  and  appropriate  transmission  of  relevant  documents  to  the 
European Parliament and to the Council. 

(86)  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  stakeholders,  including  social  partners,  civil  society 
organisations and local authorities’ capacities.  

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(87) 

(88) 

(89) 

 In accordance with Regulation (EU, Euratom) 2018/1046, Regulation (EU, Euratom) 
883/2013  of  the  European  Parliament  and  of  the  Council  and  Council  Regulations 
(EC,  Euratom)  No  2988/95,  (Euratom,  EC)  No  2185/96  and  (EU)  2017/1939,  the 
financial  interests  of  the  Union  are  to  be  protected  by  means  of  proportionate 
measures,  including  measures  relating  to  the  prevention,  detection,  correction  and 
investigation of irregularities, fraud, corruption, conflict of interest, double funding, to 
the recovery of funds lost, wrongly paid or incorrectly used. 

In  particular,  in  accordance  with  Regulations  (Euratom,  EC)  No  2185/96  and  (EU, 
Euratom)  No  883/2013,  the  European  Anti-Fraud  Office  (OLAF)  should  be  in  a 
position  to  carry  out  administrative  investigations,  including  on-the-spot  checks  and 
inspections,  with  a  view  to  establishing  whether  there  has  been  fraud,  corruption  or 
any other illegal activity affecting the financial interests of the Union. 

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  European  Public  Prosecutor’s  Office  (EPPO)  where 
relevant, 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. 

(90)  The  reinforcement  of  internal  control  systems,  the  fight  against  corruption,  the 
promotion  of  transparency,  good  administration,  and  efficient  public  financial 
management  are  important  reform  priorities  for  Ukraine  and  should  be  supported  by 
the Facility. 

(91)  The Commission should ensure that the financial interests of the Union are effectively 
protected under the Facility. To this end, an independent Audit Board should be set up 
to  provide  the  Commission  with  information  on  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  checks  on  how  Ukraine  implements  funds 
along  the  whole  project  life  cycle.  The  Audit  Board  should  ensure  regular  dialogue 
and cooperation with the European Court of Auditors. 

(92)  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 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  interests,  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,  adequate  data  on  persons  and  entities  receiving  funding  for  the 
implementation of measures of the Ukraine Plan. 

(93)  The  Union  financial  interests  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  the  second  and  third 
pillar of the Facility. 

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(94)  Work programmes should be adopted to implement the assistance under the Facility. 

(95)  The  communication  capacities  of  Ukraine  should  be  enhanced  in  order  to  ensure 
existence of strong and free pluralistic media and public support for and understanding 
of  Union  values  and  the  benefits  and  obligations  of  potential  Union  membership, 
while  addressing  disinformation.  Visibility  of  the  Union  funding  should  also  be 
ensured. 

(96)  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 this Regulation’s objectives. 

(97)  The  Commission  should  assess  each  year  the  implementation  of  support  under  the 
Ukraine 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.  Such  reports  prepared  by  the  government  should  be  appropriately 
reflected in the Ukraine Plan. Proportionate reporting requirements should be imposed 
on recipients of Union funding implemented under the second and third pillars of the 
Facility. 

(98) 

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 Council21. 

(99)  The  Commission  will  duly  take  into  account  Council  decision  2010/427/EU  and  the 
role of the EEAS where appropriate, and 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. 

(100)  Since the objectives of this Regulation cannot be sufficiently achieved by the Member 
States  but  can  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 to achieve those objectives. 

(101)  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, 

21 

Regulation  (EU)  No  182/2011  of  the  European  Parliament  and  of  the  Council  of  16  February  2011 
laying down the rules and general principles concerning mechanisms for control by the Member States 
of the Commission's exercise of implementing powers (OJ L 55, 28.2.2011, p. 13). 

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HAVE ADOPTED THIS REGULATION: 

CHAPTER I 

General provisions 

Article 1 
Subject matter 

1. 

This Regulation establishes the Ukraine Facility (the ‘Facility’). 

It lays down the objectives of the Facility, its financing, the budget for the period 2024-2027, 
the forms of Union funding under it and the rules for providing such funding. 

2. 

The Facility shall provide assistance to Ukraine under the following three pillars: 

(a) 

(b) 

(c) 

Pillar I: financial support to be provided to Ukraine for the delivery of reforms 
and investments to implement the Ukraine Plan as well as to maintain macro-
financial stability of the country, as set out in Chapter III; 

Pillar II: a specific Ukraine Investment Framework to support investments and 
provide access to finance as set out in Chapter IV; 

Pillar  III:  technical  assistance  and  related  support  to  Ukraine  to  design  and 
implement EU accession-related reforms and to foster Ukraine’s administrative 
capacity, as well as other relevant activities, as set out in Chapter V. 

Article 2 
Definitions 

For the purposes of this Regulation, the following definitions apply: 

1. 

2. 

3. 

4. 

‘Framework agreement’ means an arrangement concluded between the Commission 
and Ukraine laying down the principles of the financial cooperation between Ukraine 
and the Commission under this Regulation. 

‘Measures’ means reforms and investments under the Ukraine Plan set out in Chapter 
III. 

‘Conditions’  means  qualitative  or  quantitative  steps  relating  to  ensuring  the 
maintenance of economic and financial stability or relating to the implementation of 
the reforms and investments set out in the Ukraine Plan set out in Chapter III. 

‘Blending  operation’  means  an  operation  supported  by  the  Union  budget  that 
combines  non-repayable  forms  of  support  or  repayable  forms  of  support  or  both, 
from the Union budget  with repayable forms of support from development or other 
public finance institutions, or from commercial finance institutions and investors. 

Article 3 
Objectives of the Ukraine Facility 

1. 

The general objectives of the Facility shall be to support Ukraine to: 

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(a) 

(b) 

(c) 

address  the  social,  economic  and  environmental  consequences  of  the  war, 
thereby  contributing  to  the  recovery,  reconstruction  and  modernisation  of  the 
country;  

foster  social,  economic  and  environmental  resilience  and  progressive 
integration into the Union and global economy and markets;  

progressively  align  with  Union  rules,  standards,  policies  and  practices 
(‘acquis’)  with  a  view  to  future  Union  membership,  thereby  contributing  to 
mutual stability, security, peace, prosperity and sustainability. 

2. 

The specific objectives of the Facility shall include: 

(a) 

(b) 

(c) 

(d) 

help  maintain  the  macro-financial  stability  of  the  country  and  ease  Ukraine’s 
external and internal financing constraints; 

rebuild  and  modernise  infrastructure  damaged  by  the  war,  such  as  energy 
infrastructure,  water  systems,  internal  and  cross-border  transport  networks 
including rail, roads and bridges and border crossing points, and foster modern, 
improved and resilient infrastructures; restore food production capacities; help 
address social challenges stemming from the war, including for specific groups 
such  as  war  veterans,  Internally  Displaced  Persons,  single  parents,  disabled 
people,  minorities  and  other  vulnerable  persons;  contribute  to  the  demining 
effort; 

foster  the  transition  to  a  sustainable  and  inclusive  economy  and  a  stable 
investment  environment;  support  the  integration  of  Ukraine  into  the  Single 
Market;  repair,  rebuild  and  improve  social  infrastructure,  such  as  housing, 
healthcare  facilities,  schools  and  higher  education  institutions,  and  research 
infrastructure;  strengthen  economic  and  social  development,  with  particular 
attention  to  women  and  youth,  including  through  quality  education,  training, 
reskilling  and  upskilling,  and  employment  policies,  including  for  researchers; 
support culture and cultural heritage; strengthen strategic economic sectors and 
support investment and private sector development, with a focus on small and 
medium-sized enterprises (SMEs) and innovation, as well as on agriculture and 
rural  development,  aquaculture  and  fisheries;  restructure  Ukraine’s  financial 
markets,  including  banking  sector  and  capital  markets;  increase  domestic 
revenue mobilisation; strengthen Ukraine’s ability to trade;  

further strengthen the rule of law, democracy, the respect of human rights and 
fundamental freedoms, including through promoting an independent judiciary, 
reinforced  security,  the  fight  against  fraud,  corruption,  organised  crime  and 
money  laundering,  tax  evasion  and  tax  fraud;  compliance  with  international 
law;  strengthen  freedom  of  media  and  academic  freedom  and  an  enabling 
environment  for  civil  society; 
foster  social  dialogue;  promote  non-
discrimination and tolerance, to ensure and strengthen respect for the rights of 
persons belonging to minorities and the promotion of gender equality; reinforce 
the effectiveness  of public administration and support transparency, structural 
reforms  and  good  governance  at  all  levels,  including  in  the  areas  of  public 
financial management and public procurement and State aid; support initiatives 
and  bodies  involved  in  supporting  and  enforcing  international  justice  in 
Ukraine; 

(e) 

develop  and strengthen  a sustainable  green transition  in  all economic sectors, 
including  the  transition  towards  the  decarbonisation  of  its  economy;  promote 

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the  digital  transformation  as  an  enabler  for  sustainable  development  and 
inclusive growth; 

(f) 

support decentralisation and local development. 

Article 4 
General principles 

Cooperation under the Facility shall be based on and shall promote the development 
effectiveness  principles,  where  applicable,  across  all  modalities,  namely  ownership 
of  development  priorities  by  Ukraine,  a  focus  on  results,  inclusive  development 
partnerships, transparency and mutual accountability. The cooperation shall be based 
on effective and efficient resources allocation and use. 

Support  from  the  Facility  shall  be  additional  to  the  support  provided  under  other 
Union  programmes  and  instruments.  Activities  eligible  for  funding  under  this 
Regulation  may  receive  support  from  other  Union  programmes  and  instruments 
provided that such support does not cover the same cost. 

In order to promote the complementarity and efficiency of their action and initiative, 
the  Commission  and  the  Member  States  shall  cooperate  and  shall  strive  to  avoid 
duplication  between  assistance  under  this  Regulation  and  other  assistance  provided 
by  the  Union,  the  Member  States,  third  countries,  multilateral  and  regional 
organisations  and  entities,  such  as  international  organisations  and  the  relevant 
International Financial Institutions, agencies and non-Union donors, in line with the 
established  principles  for  strengthening  operational  coordination  in  the  field  of 
external assistance, including through enhanced coordination with Member States at 
local level and through the harmonisation of policies and procedures, in particular the 
international principles on development effectiveness.  

Activities  under  the  Facility  shall  mainstream  climate  change  mitigation  and 
adaptation, environmental protection, human rights, democracy, gender equality and, 
where  relevant,  disaster  risk  reduction,  and  shall  support  progress  towards  the 
Sustainable  Development  Goals,  promoting  integrated  actions  that  can  create  co-
benefits and meet multiple objectives in a coherent way. They should avoid stranded 
assets, and shall be guided by the principles of ‘do no harm’ and of ‘leaving no one 
behind’,  as  well  as  by  the  sustainability  mainstreaming  approach  underpinning  the 
European Green Deal. 

The  Facility  shall  not  support  activities  or  measures  which  are  incompatible  with 
Ukraine’s National Energy and Climate Plan, if available, with Ukraine’s Nationally 
Determined Contribution under the Paris Agreement, or that promote investments in 
fossil  fuels,  or  that  cause  significant  adverse  effects  on  the  environment  or  the 
climate,  unless  such  activities  or  measures  are  strictly  necessary  to  achieve  the 
objectives  of  the  Facility,  taking  into  account  the  need  to  rebuild  and  modernise 
infrastructure  damaged  by  the  war  in  a  resilient  way,  and  they  are  accompanied, 
where relevant, by appropriate measures to avoid, prevent or reduce and, if possible, 
offset these effects. 

In  line  with  the  principle  of  inclusive  partnership,  where  appropriate,  the 
Commission  shall  strive  to  ensure  that  relevant  stakeholders,  including  local  and 
regional  authorities,  social  partners  and  civil  society  organisations,  are  duly 
consulted  and  have  timely  access  to  relevant  information  to  allow  them  to  play  a 
meaningful  role  during  the  design  and  implementation  of  activities  eligible  for 

1. 

2. 

3. 

4. 

5. 

6. 

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7. 

1. 

2. 

funding under this Facility, and in the related monitoring processes. The Commission 
shall in particular promote the involvement of regional, local, urban and other public 
authorities, in  accordance  with  the multi-level  governance principle and taking into 
account  a  bottom-up  approach.  The  Commission  shall  encourage  coordination 
among the relevant stakeholders. 

The  Commission,  in  cooperation  with  the  Member  States  and  Ukraine,  shall 
contribute  to  the  implementation  of  Union  commitments  to  increased  transparency 
and  accountability  in  the  delivery  of  assistance,  including  by  promoting  the 
implementation and reinforcement of internal control systems and anti-fraud policies, 
and  by  making  information  on  the  volume  and  allocation  of  assistance  available 
through  web-based  databases,  and  shall  ensure  that  data  is  comparable  and  can  be 
easily accessed, shared and published. 

Article 5 
Precondition for Union support 

A  precondition  for  the  support  to  Ukraine  under  the  Facility  shall  be  that  Ukraine 
continues to uphold and respect effective democratic mechanisms, 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. 

The Commission shall monitor the fulfilment of the precondition set out in paragraph 
1  before  disbursements  to  Ukraine  under  the  Facility  are  made  and  throughout  the 
period  of  the  support  provided  under  the  Facility  taking  duly  into  account  the 
Commission’s  regular  enlargement  report.  The  Commission  may  adopt  a  decision 
concluding that this precondition is not met, and in particular, suspend the payments 
referred  to  in  Article  25,  irrespective  of  the  fulfilment  of  conditions  referred  to  in 
Article  15(2).  In  its  assessment,  the  Commission  shall  also  take  into  account  the 
context in Ukraine, and the consequences of the application there of martial law. 

CHAPTER II 

Financing and implementation 

Article 6 
Budget 

1. 

The  resources  for  the  implementation  of  the  Ukraine  Facility  shall  be  available  in 
accordance with Article 10b of Council Regulation (EU, Euratom) 2020/2093, with 
the following indicative distribution: 

(a) 

78 % in the form of non-repayable financial support pursuant to Chapter III of 
this Regulation; 

(b)  16 % for expenditure pursuant to Chapter IV; 

(c) 

5 % for expenditure pursuant to Chapter V;  

(d)  up to 1 % for expenditure pursuant to paragraph 5 of this Article. 

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2. 

3. 

4. 

5. 

1. 

2. 

3. 

1. 

The financial support pursuant to Chapter III in the form of a loan, shall be available 
for an amount of up to EUR 50 000 000 000 for the period from 1 January 2024 to 31 
December 2027.  

The overall amount of disbursements of the loans shall take into account the amounts 
made available pursuant to paragraph 1 and the amount referred to in paragraph 3. 

The  sum  of  the  resources  made  available  pursuant  to  paragraphs  1  and  2  shall  not 
exceed EUR 50 000 000 000  for the period 2024 to 2027. 

Additional contributions for financing the support referred to in paragraph 1 may be 
provided in accordance with Article 7. 

The resources  referred to in  point paragraphs 1(d) and 4 may be used for technical 
and  administrative  assistance  for  the  implementation  of  the  Facility,  such  as 
preparatory  actions,  monitoring,  control,  audit  and  evaluation  activities,  which  are 
required for the management of the Facility and the achievement of its objectives, in 
particular studies, meetings of experts, consultations with the Ukrainian authorities, 
conferences,  consultation  of  stakeholders,  information  and  communication  actions, 
including  inclusive  outreach  actions,  and  corporate  communication  of  the  political 
priorities of the Union, insofar as they are related to the objectives of this Regulation, 
expenses  linked  to  IT  networks  focusing  on  information  processing  and  exchange, 
corporate  information  technology  tools,  and  all  other  technical  and  administrative 
assistance expenses incurred by the Commission for the management and costs of the 
Facility at headquarters and in Union delegations. Expenses may also cover the costs 
of  other  supporting  activities  such  as  quality  control  and  monitoring  of  projects  on 
the  ground  and  the  costs  of  peer  counselling  and  experts  for  the  assessment  and 
implementation of reforms and investments. 

Article 7 
Additional financial resources for the Facility 

Member  States,  third  countries,  international  organisations,  international  financial 
institutions  or  other  sources  may  provide  additional  financial  contributions  to  the 
Facility.  Such  contributions  shall  constitute  external  assigned  revenue  within  the 
meaning  of  Article  21(2),  points  (a)(ii),  (d),  and  (e)  of  Regulation  (EU,  Euratom) 
2018/1046.  

Additional  amounts  received  as  external  assigned  revenue  within  the  meaning  of 
Article 21(5) of Regulation (EU, Euratom) 2018/1046 under the relevant Union legal 
acts  in  relation  to  restrictive  measures  in  view  of  Russia's  actions  destabilising  the 
situation in Ukraine shall be added to the resources referred to in Article 6. 

The contributions referred to in paragraph 1 shall be implemented in accordance with 
the same rules and conditions as the amount referred to in Article 6(1). 

The  contributions  to  the  Ukraine  Guarantee  and  to  the  financial  instruments  under 
Chapter IV shall be made in accordance with Article 28. 

Article 8 
Implementation and forms of Union funding 

The  Facility  shall  be  implemented  in  accordance  with  Regulation  (EU,  Euratom) 
2018/1046,  either in  direct  management or in  indirect  management  with  any of the 

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2. 

3. 

1. 

2. 

3. 

4. 

entities  referred  to  in  Article  62,  first  subparagraph,  point  (c)  of  Regulation  (EU, 
Euratom) 2018/1046. 

Union  funding  may  be  provided  in  any  of  the  forms  laid  down  in  Regulation  (EU, 
Euratom)  2018/1046,  in  particular  grants,  prizes,  procurement,  budget  support, 
financial  instruments,  budgetary  guarantees,  blending  operations  and  financial 
assistance.  

Financial  instruments,  budgetary  guarantees  and  blending  operations  combining 
support  from  financial  instruments  or  budgetary  guarantees  under  the  Facility  shall 
be  implemented  in  accordance  with  the  principles  laid  down  in  Title  X,  and  in 
particular  Articles  208  and  209(1),  (2)  and  (4),  of  Regulation  (EU,  Euratom) 
2018/1046.  Depending  on  the  required  operational  and  financial  capacity,  the 
counterpart  of  the  budgetary  guarantee,  or  the  entrusted  entity  implementing 
financial  instruments,  may  be  the  European  Investment  Bank  or  the  European 
Investment  Fund,  a  multilateral  European  finance  institution,  such  as  the  European 
Bank  for  Reconstruction  and  Development,  or  a  bilateral  European  finance 
institution,  such  as  development  banks.  Whenever  possible,  the  implementation  of 
financial  instruments,  budgetary  guarantees  and  blending  operations  under  the 
Facility shall be complemented by additional forms of financial support, from either 
Member States or third parties. 

Article 9 
Framework agreement 

The  Commission  shall  conclude  a  framework  agreement  with  Ukraine  for  the 
implementation of the Facility setting out specific arrangements for the management, 
control,  supervision,  monitoring,  evaluation,  reporting  and  audit of  funds under the 
Facility, as well as to prevent, investigate and correct irregularities, fraud, corruption 
and  conflicts  of  interest.  The  framework  agreement  shall  be  complemented  by 
financing  agreements  in  accordance  with  Article  10  and  loan  agreements  in 
accordance with  Article 21, setting out  specific provisions for the management and 
implementation of funding under the Facility.  

With the exception of bridge financing referred to in Article 24, funding shall only be 
granted to Ukraine after the framework agreement and the applicable financing and 
loan agreements, have entered into force.  

The  framework  agreement,  the  financing  agreements  and  the  loan  agreement 
concluded with Ukraine, taken as a whole, and contracts and agreements signed with 
person or entities receiving Union funds, shall ensure that the obligations set out in 
Article 129 of Regulation (EU, Euratom) 2018/1046 can be fulfilled.  

The  framework  agreement  shall  lay  down,  in  particular,  detailed  provisions 
concerning, in particular:  

(a) 

(b) 

the  commitment  of  Ukraine  to  progress  towards  more  efficient  and  effective 
control  systems,  and  to  strengthen  the  fight  against  money  laundering, 
terrorism financing, tax avoidance, tax fraud or tax evasion;  

the  activities  related  to  control,  supervision,  monitoring,  evaluation,  reporting 
and audit of Union funding under the  Facility, as  well as investigations, anti-
fraud measures and cooperation;  

(c) 

control requirements for release of funding to Ukraine; 

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(d) 

(e) 

(f) 

(g) 

(h) 

(i) 

(j) 

rules on taxes, duties and charges in accordance with Article 27(9) and (10) of 
Regulation (EU) 2021/947;  

the recognition of the responsibilities of the Audit Board referred to in Article 
34, and the modalities of Ukraine’s cooperation with it; 

the  obligation  for  persons  or  entities  implementing  Union  funds  under  the 
Facility to notify the Audit Board, the Commission and OLAF without delay of 
suspected  or  actual  cases  of  irregularities,  fraud,  corruption  and  conflict  of 
interests and their follow-up; 

the right of the Commission to monitor activities under the Facility carried out 
by the Ukrainian authorities, along the whole project cycle, including inter alia 
projects  selection  and  award  procedures  including  for  public  procurement,  to 
take part in these as observer, as appropriate, and to make recommendations for 
the  improvement  of  such  activities  and  commitment  from  the  Ukrainian 
authorities to  do their best  efforts to  implement  such recommendations of the 
Commission and to report on this implementation;  

the  obligations  referred  to  in  Article  33(2),  including  precise  rules  and 
timeframe on collection of data by Ukraine and access for the Commission and 
OLAF; 

the obligation for Ukraine to transmit electronically to the Commission the data 
referred to in Article 26; 

a  procedure  to  ensure  that  disbursement  requests  for  the  loan  support  fall 
within the available loan amount, taking into consideration Article 6(2). 

Article 10 
Financing agreements 

Financing agreements shall be concluded for Chapters III and V. They shall set out 
the responsibilities and obligations of Ukraine in the implementation of Union funds, 
including  the  obligations  set  out  in  Article  129  of  Regulation  (EU,  Euratom) 
2018/1046. They shall also set out the conditions for payment of the non-repayable 
financial support, including in relation to the internal control systems as referred to in 
Article  9(4),  points  (a)  and  (c).  The  financing  agreements  shall  also  set  out  the 
Union’s rights and obligations. 

The financing agreements shall include rules on reporting to the Commission on how 
activities are carried out, and on whether the conditions mentioned in Article 15(2) 
are fulfilled. 

Article 11 
Rules on eligibility of persons and entities, origin of supply and materials and restriction 
under the Facility 

Participation in procurement, grant and prize award procedures for activities financed 
under the Facility shall be open to international and regional organisations and to all 
natural  persons  who  are  nationals  of,  and  to  legal  persons  which  are  effectively 
established in: 

(a)  Member States, Ukraine, contracting parties to the Agreement on the European 
Economic  Area  and  countries  covered  by  Annex  I  to  Regulation  (EU) 

1. 

2. 

1. 

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2. 

3. 

4. 

5. 

6. 

7. 

2021/947  and  Annex  I  to  Regulation  (EU)  2021/1529  of  the  European 
Parliament and of the Council22;  

(b) 

countries  for  which  reciprocal  access  to  external  assistance  in  Ukraine  is 
established by the Commission. 

The  reciprocal  access  referred  to  in  paragraph  1,  point  (b),  may  be  granted  for  a 
limited  period  of  at  least  one  year,  whenever  a  country  grants  eligibility  on  equal 
terms to entities from the Union and from countries eligible under the Facility. 

The Commission shall decide on the reciprocal access after consulting Ukraine. 

All  supplies  and  materials  financed  and  procured  under  this  Facility  shall  originate 
from  any  country  referred  to  paragraph  1(a)  and  (b),  unless  if  the  supplies  and 
materials  cannot  be  sourced  at  reasonable  conditions  in  any  of  those  countries.  In 
addition, the rules on restrictions in paragraph 7 apply. 

The  eligibility  rules  under  this  Article  shall  not  apply  to,  and  shall  not  create 
nationality restrictions for, natural persons employed or otherwise legally contracted 
by  an  eligible  contractor  or,  where  applicable,  subcontractor  except  where  the 
nationality restrictions are based on the rules provided for in paragraph 7. 

For  actions  jointly  co-financed  by  an  entity  or  implemented  in  direct  or  indirect 
management  with  entities  as  referred  to  in  Article  62(1),  point  (c),  of  Regulation 
(EU,  Euratom)  2018/1046  or  for  actions  implemented  by  Ukrainian  entities  under 
Chapter III of this Regulation, the eligibility rules of those entities or Ukraine shall 
also  apply  in  addition  to  the  rules  established  under  this  Article,  including,  where 
applicable,  the  restrictions  provided  for  under  paragraph  7  of  this  Article  and  duly 
reflected  in  the  financing  agreements  and  contractual  documents  signed  with  those 
entities.  

Where  additional  contributions  are  provided  in  accordance  with  Article  7  through 
external  assigned  revenues,  the  eligibility  rules  in  the  agreement  with  the  person 
providing  the  additional  contribution  shall  apply  with  the  rules  on  restrictions 
provided for under paragraph 7 of this Article. 

The eligibility rules and origin of supplies and materials in paragraphs 1 and  3 and 
the  nationality  of  the  natural  persons  referred  to  in  paragraph  4  may  be  restricted 
with  regard  to  the  nationality,  geographical  location  or  nature  of  the  legal  entities 
participating  to  procurement  procedures  as  well  as  with  regard  to  the  geographical 
origin of supplies and materials, in the following cases: 

(a)  where  such  restrictions  are  required  on  account  of  the  specific  nature  and/or 
objectives  of  the  activity  or  specific  award  procedure  and/or  where  these 
restrictions are necessary for the action’s effective implementation; 

(b)  where the action or specific award procedures affect security or public order, in 
particular  concerning  strategic  assets  and  interests  of  the  Union,  its  Member 
States,  or  Ukraine,  including  the  protection  of  the  integrity  of  digital 
infrastructure,  communication  and  information  systems,  and  related  supply 
chains. 

22 

Regulation  (EU)  2021/1529  of  the  European  Parliament  and  of  the  Council  of  15  September  2021 
establishing the Instrument for Pre-Accession assistance (IPA III) (OJ L 330, 20.9.2021, p. 1). 

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8. 

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

Article 12 
Carry-overs, annual instalments, commitment appropriations, surpluses from the budgetary 
guarantee, repayments and revenue generated by financial instruments  

1. 

2. 

3. 

4. 

5. 

6. 

1. 

By  derogation  to  Article  12(4)  of  Regulation  (EU,  Euratom)  2018/1046,  unused 
commitment  and  payment  appropriations  under  the  Facility  shall  be  automatically 
carried over and may be committed and used, respectively, up to 31 December of the 
following financial year. The amount carried over shall be used first in the following 
financial year. 

The  Commission  shall  inform  the  European  Parliament  and  the  Council  of 
commitment  appropriations  carried  over  in  accordance  with  Article  12(6)  of 
Regulation (EU, Euratom) 2018/1046. 

By  derogation  to  Article  15  of  Regulation  (EU,  Euratom)  2018/1046  on  making 
appropriations  available  again,  commitment  appropriations  corresponding  to  the 
amount of decommitments made as a result of total or partial non-implementation of 
an action under the Facility shall be made available again to the benefit of the budget 
line of origin. 

By  way  of  derogation  from  the  first,  second  and  fourth  subparagraphs  of  Article 
209(3) of Regulation (EU, Euratom) 2018/1046, any revenues and repayments from 
financial  instruments  established  under  this  Regulation  shall  constitute  internal 
assigned revenue within the meaning of Article 21(5) of Regulation (EU, Euratom) 
2018/1046, to the Facility or its successor programme. 

By  way  of  derogation  from  Article  213(4),  point  (a),  of  Regulation  (EU,  Euratom) 
2018/1046, any surplus of the provisions for the Ukraine Guarantee shall constitute 
internal  assigned  revenue  within  the  meaning  of  Article  21(5)  of  Regulation  (EU, 
Euratom) 2018/1046 to the Facility or its successor programme. 

Budgetary commitments for actions extending over more than one financial year may 
be  broken  down  over  several  years  into  annual  instalments,  in  accordance  with 
Article 112(2) of Regulation (EU, Euratom) 2018/1046. 

The  third  subparagraph  of  Article  114(2)  of  Regulation  (EU,  Euratom)  2018/1046 
shall not apply to the actions referred to in the first subparagraph of this paragraph. 

Article 13 
Exceptional financing 

In  duly  justified  exceptional  circumstances,  in  particular  where  a  significant 
deterioration  of  the  war  makes  it  impossible  for  Ukraine  to  fulfil  the  conditions 
attached  to  the  forms  of  support  under  this  Regulation,  the  Facility  may  provide 
exceptional financing to Ukraine in order to maintain its macro-financial stability and 
to foster the achievement of the objectives referred to in Article 3. Such exceptional 
financing  shall  cease  as  soon  as  the  fulfilment  of  the  conditions  becomes  possible 
again. 

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2. 

3. 

1. 

2. 

1. 

2. 

3. 

4. 

5. 

For the purpose of paragraph 1, where the Commission finds that it is impossible for 
Ukraine to fulfil the conditions attached to the forms of support under this Regulation 
due to such duly justified exceptional circumstances, it may submit to the Council a 
proposal  for  an  implementing  decision  providing  exceptional  financing  to  Ukraine 
under the Facility.  

The exceptional financing shall in any case be subject to the precondition referred to 
in  Article  5  and  shall  be  financed  within  the  resources  referred  to  in  Article  6(1), 
point (a), and 6(2). 

CHAPTER III 

Pillar I: Ukraine Plan 

Article 14 
Relation of the Ukraine Plan to the Pillars of the Facility 

The Ukraine Plan (the “Plan”) shall provide for an overarching framework to achieve 
the objectives set out in Article 3.  

The Ukraine Plan shall constitute the basis for the support provided under Pillar I of 
the Facility as set out in Article 1(2)(a) and as referred to in this Chapter. It shall also 
serve as a reference to guide the support to be provided under Pillars II and III of the 
Facility referred to in Chapters IV and V. 

Article 15 
Principles for financing under the Ukraine Plan 

The  Ukraine  Plan  shall  set  out  the  reform  and  investment  agenda  of  Ukraine, 
integrated in an economic and fiscal policy framework, towards the achievement of 
the general and specific objectives mentioned in Article 3. The  Plan shall comprise 
measures  for  the  implementation  of  reforms  and  public  investment  through  a 
comprehensive  and  coherent  package,  which  may  also  include  public  schemes  that 
aim to incentivise private investments.  

The Facility shall provide financing under this Chapter upon satisfactory fulfilment 
of conditions stemming from the Plan, taking the form of qualitative or quantitative 
steps. Such conditions shall reflect the different objectives of the Facility, as defined 
in  Article  3,  and  shall  include  conditions  related  to  essential  requirements,  such  as 
the  maintenance  of  economic  and  financial  stability,  budget  oversight  and  public 
financial  management,  and  conditions  related  to  the  implementation  of  the  reforms 
and investments set out in the Plan.  

The  conditions  mentioned  in  paragraph  2  shall  reflect  the  amounts  referred  to  in 
Article 6(1)(a) and (2) and relevant contributions under paragraph 4 of that Article. 

Measures  started from 1 January 2023 onwards  shall be eligible provided that they 
comply with the requirements set out in this Regulation. 

The Ukraine Plan shall be consistent with reform priorities identified in the context 
of  Ukraine’s  accession  path,  as  outlined  in  the  Commission  Opinion  and  the 
Analytical  Report,  and 
including  a  Deep  and 
the  Association  Agreement 
Comprehensive  Free  Trade  Agreement.  It  shall  also  be  consistent  with  Ukraine’s 

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Nationally Determined Contribution under the Paris Agreement and, if available, the 
National Energy and Climate Plan. 

6. 

The Ukraine Plan shall respect the general principles set out in Article 4. 

Article 16 
Content of the Ukraine Plan 

1. 

2. 

In  order  to  receive  support  under  the  Facility,  Ukraine  shall  submit  to  the 
Commission a Ukraine Plan. 

The  Ukraine  Plan  shall  in  particular  set  out  the  following  elements,  which  shall  be 
duly reasoned and substantiated: 

(a)  measures  constituting  a  coherent,  comprehensive  and  adequately  balanced 
response to the objectives set out in Article 3, including structural reforms and 
measures  to  promote  the  convergence  with  the  Union  as  well  as  measures 
referred to in article 15(2), so that the Plan as a whole raises the growth rate of 
the Ukrainian economy; 

(b) 

(c) 

(d) 

(e) 

(f) 

(g) 

(h) 

an  explanation  of  how  the  Plan  is  consistent  with  the  principles,  plans  and 
programmes referred to in Article 15(5); 

for  the  reforms  and  investments,  an  indicative  timetable,  and  the  envisaged 
qualitative and quantitative steps to be implemented by 31 December 2027; 

the arrangements for the effective monitoring, reporting and evaluation of the 
Ukraine  Plan  by  Ukraine,  including  the  proposed  qualitative  and  quantitative 
steps, and the related indicators; 

an explanation of how the Plan corresponds to the recovery, reconstruction and 
modernisation  needs  stemming  from  the  war  in  Ukraine’s  regions  and 
municipalities, and thereby enhances their economic, social, environmental and 
territorial  development,  supports  the  decentralisation  reform  across  Ukraine 
and  convergence  towards  the  Union’s  standards;  an  explanation  of  the 
methodology  and  processes  used  for  the  selection  and  implementation  of 
projects, and the mechanisms to involve sub-national authorities, in particular 
municipalities, in decision-making on the use of support in the reconstruction 
process at local level; the methodology used to track related expenditure; and 
an explanation of how the Plan ensures that the reconstruction projects selected 
and  implemented  by  such  sub-national  authorities  constitute  an  adequately 
substantial share of the support;  

for the preparation and, where available, for the implementation of the Ukraine 
Plan, a summary of the consultation process, conducted in accordance with the 
national legal framework, of relevant stakeholders, including local and regional 
authorities, social partners and civil society organisations, and how the input of 
the stakeholders is reflected in the Ukraine Plan; 

an explanation of the extent to which the measures under the Plan are expected 
to contribute to climate and environmental objectives; 

an  explanation  of  Ukraine’s  system  to  effectively  prevent,  detect  and  correct 
irregularities, fraud, corruption and conflicts of interests, when using the funds 
provided under the Facility, and of the arrangements that aim to avoid double 
funding from the Facility and other Union programmes or donors; 

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3. 

1. 

2. 

3. 

1. 

2. 

(i) 

any other relevant information. 

The Ukraine Plan shall be results-based and include indicators for assessing progress 
towards the achievement of the general and specific objectives referred to in Article 
3. 

Article 17 
Preparation and submission of the Ukraine Plan 

The  Ukraine  Plan  shall  be  prepared  by  Ukraine.  Ukraine  shall  strive  to  submit  the 
Plan  to  the  Commission  by  two  months  after  entry  into  force  of  this  Regulation. 
Ukraine may submit a draft Plan to the Commission. 

When preparing the Plan in accordance with Article 16, Ukraine shall take particular 
account of the situation in Ukraine’s regional, local and urban areas, having regard to 
their  specific  needs  for  recovery  and  reconstruction,  reform,  modernisation  and 
decentralisation.  

The  preparation  and  implementation  of  the  Ukraine  Plan  shall  be  done  in 
consultation  with  regional,  local,  urban  and  other  public  authorities,  in  accordance 
with  the  multi-level  governance  principle  and  taking  into  account  a  bottom-up 
approach. 

Article 18 
Commission assessment of the Ukraine Plan 

The Commission shall assess the relevance, comprehensiveness and appropriateness 
of the Ukraine Plan or, where applicable, the amendment to that Plan referred to in 
Article  20,  without  undue  delay,  and  make  a  proposal  for  a  Council  implementing 
decision  in  accordance  with  Article  19(1).  When  carrying  out  that  assessment,  the 
Commission shall act in close cooperation with Ukraine, and may make observations 
or seek additional information.  

When  assessing  the  Ukraine  Plan,  and  in  the  determination  of  the  amount  to  be 
allocated  to  Ukraine,  the  Commission  shall  take  into  account  relevant  available 
analytical  information  on  Ukraine,  the  justification  and  the  elements  provided  by 
Ukraine as referred to in Article 16(2), as well as any other relevant information such 
as, in particular, the information listed in Article 15(5). 

3. 

In its assessment, the Commission shall take into account the following criteria: 

(a)  whether  the  Plan  represents  a  coherent,  comprehensive  and  adequately 
balanced  response  to  the  objectives  set  out  in  Article  3,  including  structural 
reforms and measures to promote the convergence with the Union, so that the 
Plan as a whole raises the growth rate of the Ukrainian economy; 

(b)  whether 

to 

the 

recovery, 

the  Plan  corresponds 

reconstruction  and 
modernisation  needs  stemming  from  the  war  in  Ukraine’s  regions  and 
municipalities, and thereby enhances their economic, social, environmental and 
territorial  development,  supports  the  decentralisation  reform  across  Ukraine 
and convergence towards the Union’s standards; whether the methodology and 
processes  used  for  the  selection  and  implementation  of  projects,  and  the 
mechanisms to involve sub-national authorities, in particular municipalities, in 
decision-making  on  the  use  of  support  in  the  reconstruction  process  at  local 
level  are  appropriate;  whether  the  methodology  used  to  track  related 

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36 

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expenditure for the reconstruction projects  selected and implemented by  such 
sub-national authorities is appropriate and whether such projects constitute an 
adequately substantial share of the support; 

(c)  whether  the  arrangements  proposed  by  Ukraine  are  expected  to  ensure  an 
effective  monitoring,  reporting  and  implementation  of  the  Ukraine  Plan, 
including  the  envisaged  timetable,  qualitative  and  quantitative  steps,  and  the 
related indicators; 

(d)  whether  the  arrangements  proposed  by  Ukraine  are  expected  to  effectively 
prevent,  detect  and  correct  irregularities,  fraud,  corruption  and  conflicts  of 
interests, when using the funds provided under the Facility, and are expected to 
allow avoiding double funding from the Facility and other Union programmes 
as well as other donors. 

For  the  purpose  of  the  assessment  of  the  Ukraine  Plan  submitted  by  Ukraine,  the 
Commission may be assisted by experts. 

Article 19 
Council implementing decision 

In  case  of  a  positive  assessment,  on  a  proposal  from  the  Commission,  the  Council 
shall approve by means of an implementing decision the assessment of the Ukraine 
Plan submitted by Ukraine in accordance with Article 17(1) or, where applicable, of 
its amendment submitted in accordance with Article 20(1) or (2). 

The Commission proposal for a Council implementing decision shall set out, for the 
part to be funded by the Facility, the reforms and investments to be implemented by 
Ukraine,  the  conditions  stemming  from  the  Plan  as  described  in  Article  15(2), 
including the indicative timetable, and the amounts referred to in Article 6(1) point 
(a) and (2) and relevant contributions under paragraph 4 of that Article. 

4. 

1. 

2. 

3. 

The Commission proposal referred to in paragraph 2 shall also lay down: 

(a) 

(b) 

(c) 

(d) 

(e) 

(f) 

the  indicative  non-repayable  financial  support  and  indicative  amount  of  the 
loan  support  to  be  paid  in  instalments,  structured  in  accordance  with  Article 
15(2),  once  Ukraine  has  achieved  satisfactory  fulfilment  of  the  relevant 
qualitative and quantitative steps identified in relation to the implementation of 
the Ukraine Plan;  

the  non-repayable  financial  support  and  the  amount  of  the  loan  support  to  be 
paid in the form of a pre-financing in accordance with Article 23; 

the time limit, which should be no later than 31 December 2027, by which the 
final qualitative and quantitative steps for both investment projects and reforms 
must be completed; 

the  arrangements  and  timetable  for  monitoring  and  implementation  of  the 
Ukraine  Plan  including,  where  relevant,  measures  necessary  for  complying 
with Article 33; 

the  indicators  for  assessing  progress  towards  the  achievement  of  the  general 
and specific objectives mentioned in Article 3; 

the  arrangements  for  providing  full  access  by  the  Commission  to  the 
underlying relevant data. 

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1. 

2. 

3. 

1. 

2. 

3. 

4. 

1. 

Article 20 
Amendments to 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, Ukraine may propose an amended Ukraine Plan. In that case, Ukraine 
may make a reasoned request to the Commission to make a proposal to amend all or 
part of the Council implementing decision referred to in Article 19(1).  

The  Commission  may,  in  agreement  with  Ukraine,  make  a  proposal  to  amend  the 
Council implementing decision referred to in Article 19(1), in particular to take into 
account a change of the amounts available, notably due to additional contributions by 
the Member States or from other sources as referred to in Article 6(4). 

Where the Commission considers that the reasons put forward by Ukraine justify an 
amendment to the Ukraine Plan, the Commission shall assess the amended  Ukraine 
Plan in accordance with Article 18 and shall make a proposal for an amendment of 
the Council implementing decision referred to in Article 19(1) without undue delay. 

Article 21 
Loan agreement, borrowing and lending operations 

In  order  to  finance  the  support  under  the  Facility  in  the  form  of  loans,  the 
Commission  shall  be  empowered,  on  behalf  of  the  Union,  to  borrow  the  necessary 
funds on the capital markets or from financial institutions in accordance with Article 
220a of Regulation (EU, Euratom) 2018/1046.  

Upon adoption of the Council implementing decision referred to in Article 19(1), the 
Commission shall enter into a loan agreement with Ukraine in respect of the amount 
referred to in Article 6(2). The loan agreement shall lay down the availability period 
and  the  detailed  terms  of  the  support  under  the  Facility  in  the  form  of  loans, 
including  in  relation  to  the  internal  control  systems  as  referred  to  in  Article  9(4), 
points (a) and (c). The loans shall have maximum duration of 35 years. In addition to 
the  elements  laid  down  in  Article  220(5)  of  Regulation  (EU,  Euratom)  2018/1046, 
the loan agreement shall contain the amount of pre-financing and rules on clearing of 
pre-financing. 

By  way  of  derogation  from  Article  31(3),  second  sentence,  of  Regulation  (EU) 
2021/947, the financial assistance provided to Ukraine in the form of loans under the 
Facility shall not be supported by the External Action Guarantee.  

No provisioning for the loans under this Regulation shall be constituted and, by way 
of  derogation  from  Article  211(1)  of  Regulation  (EU,  Euratom)  2018/1046,  no 
provisioning  rate  as  a  percentage  of  the  amount  referred  to  in  Article  6(2)  of  this 
Regulation shall be set. 

Article 22 
Borrowing costs subsidy 

By way of derogation from Article 220(5) of Regulation (EU, Euratom) 2018/1046, 
the  Union  may  bear  the  cost  of  funding,  cost  of  liquidity  management,  and  cost  of 
service  for  administrative  overheads  related  to  the  borrowing  and  lending 
(“borrowing costs subsidy”), except for costs related to early repayment of the loan. 

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2. 

1. 

2. 

3. 

4. 

1. 

For  the  period  from  1  January  2024  to  31  December  2027,  the  borrowing  costs 
subsidy shall be covered under Chapter V.  

Ukraine may request each year the borrowing costs subsidy referred to in paragraph 
1.  The  Commission  may  award  the  borrowing  costs  subsidy  for  an  amount  not 
exceeding the limits of the appropriations made available in the annual budget. 

Article 23 
Pre-financing 

Ukraine  may  request  together  with  the  submission  of  the  Ukraine  Plan  a  pre-
financing payment of an amount of up to 7% of the non-repayable financial support 
and loan to be provided under Chapter III.  

In  respect  of  the  non-repayable  financial  support,  the  Commission  may  make  the 
payment of pre-financing after the adoption of the Plan referred to in Article 19 and 
the entry into force of the financing agreement referred to in Article 10, subject to the 
available funding and to the respect of the precondition referred to in Article 5. 

In  respect  of  the  loan  support,  the  Commission  may  make  the  payment  of  pre-
financing  after  the  approval  of  the  Plan  referred  to  in  Article  19  and  the entry  into 
force  of  the  loan  agreement  referred  to  in  Article  21.  The  payments  shall  be  made 
subject to the available funding on capital markets referred to in Article 21(1) and to 
the respect of the precondition set out in Article 5. 

The  Commission  shall  decide  on  the  timeframe  for  the  disbursement  of  the  pre-
financing, which may be disbursed in one or more tranches. 

Article 24 
Exceptional bridge financing 

Without prejudice to Article 23, if the Framework Agreement referred to in Article 9 
is  not  signed  or  the  Ukraine  Plan  referred  to  in  Chapter  III  is  not  adopted  by  31 
December 2023, the Commission may decide to provide limited, exceptional support 
to Ukraine for a period of up to three months after either the entry into force of this 
Regulation,  or  1  January  2024,  whichever  is  later,  subject  to  having  made 
satisfactory progress on the preparation of the Ukraine Plan, in order to support the 
macro-financial  stability  of  the  country,  subject  to  conditions  to  be  agreed  in  a 
Memorandum of Understanding between the Commission and Ukraine, to the respect 
of  the  precondition  mentioned  in  Article  5,  to  compliance  with  Article  6  and  to 
available funding. 

2. 

The amount of such support shall not exceed EUR 1 500 000 000 on a monthly basis. 
The Commission shall enter into a financing or loan agreement with Ukraine, which 
shall comply as appropriate with Articles 10 and 21, respectively. 

Article 25 
Rules on payments, withholding and reduction of non-repayable financial support and loans 

1. 

Payments  of  the  non-repayable  financial  support  and  of  the  loan  to  Ukraine  under 
this Article shall be made in accordance with the budget  appropriations and subject 
to the available funding. Payments shall be made in instalments. An instalment may 
be disbursed in one or more tranches. 

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2. 

3. 

4. 

5. 

6. 

7. 

8. 

9. 

Every quarter, Ukraine shall submit a duly justified request for payment of the non-
repayable  financial  support  and  of  the  loan,  and  the  Commission  shall  pay  the 
relevant  non-repayable  financial  support  and  loan,  on  the  basis  of  the  assessment 
described in paragraph 3. 

The  Commission  shall  assess  without  undue  delay  whether  Ukraine  has  achieved 
satisfactory fulfilment of the qualitative and quantitative steps set out in the Council 
implementing  decision  referred  to  in  Article  19(1).  The  satisfactory  fulfilment  of 
qualitative and quantitative steps shall presuppose that measures related to the steps 
for  which  Ukraine  had  achieved  satisfactory  fulfilment  have  not  been  reversed  by 
Ukraine. The Commission may be assisted by experts. 

Where the Commission makes a positive assessment of the satisfactory fulfilment of 
qualitative  and  quantitative  steps,  it  shall  adopt  without  undue  delay  a  decision 
authorising the disbursement of the part of the non-repayable financial support and of 
the loan corresponding to such steps.  

Where the Commission makes a negative assessment of the fulfilment of qualitative 
and  quantitative  steps  as  per  the  indicative  timetable,  the  payment  of  the  non-
repayable  financial  support  and  of  the  loan  corresponding  to  such  steps  shall  be 
withheld.  The  payment  withheld  shall  only  be  disbursed  when  Ukraine  has  duly 
justified,  as  part  of  a  subsequent  payment  request,  that  it  has  taken  the  necessary 
measures to ensure satisfactory fulfilment of the qualitative and quantitative steps. 

Where the Commission concludes that Ukraine has not taken the necessary measures 
within a period of twelve months from the initial negative assessment referred to in 
paragraph 5, the Commission shall reduce the amount of the non-repayable financial 
support  and  of  the  loan  proportionately  to  the  part  corresponding  to  the  relevant 
qualitative  and  quantitative  steps.  Ukraine  may  present  its  observations  within  two 
months from the communication of the Commission’s conclusions.  

The  Commission  may  reduce  the  amount  of  the  non-repayable  financial  support, 
including  by  offsetting  in  line  with  Article  102  of  Regulation  (EU,  Euratom) 
2018/1046, or of the loan to be disbursed to Ukraine as referred to in paragraph 4, in 
the  event  of  identified  cases  of,  or  serious  concerns  in  relation  to,  irregularities, 
fraud,  corruption  and  conflicts  of  interests  affecting  the  financial  interests  of  the 
Union that have not been corrected by Ukraine, or a serious breach of an obligation 
resulting  from  such  agreements,  including  on  the  basis  of  the  reports  of  the  Audit 
Board referred to in Article 34 or information provided by OLAF.  

By way of derogation from Article 116(2) of Regulation (EU, Euratom) 2018/1046, 
the  payment  deadline  as  referred  to  in  point  (a)  of  paragraph  1  of  Article  116,  of 
Regulation  (EU,  Euratom)  2018/1046  shall  start  running  from  the  date  of  the 
communication of the decision authorising the disbursement to Ukraine pursuant to 
paragraph 4 of this Article. 

Article 116(5) of Regulation (EU, Euratom) 2018/1046 shall not apply to payments 
made pursuant to this Article and to Article 23 of this Regulation. 

Article 26 
Transparency with regard to persons and entities receiving funding for the implementation of 
the Plan 

1. 

Ukraine  shall  publish  data  on  persons  and  entities  receiving  amounts  of  funding 
exceeding  the  equivalent  of  EUR  500  000  for  the  implementation  of  reforms  and 

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investments  specified in  the Ukraine  Plan referred to  in  this  Chapter. Ukraine shall 
update those data twice a year, in June and December.  

2. 

For persons and entities referred to in paragraph 1, the following information shall be 
published, having due regard for the requirements of confidentiality and security, in 
particular the protection of personal data: 

(a) 

in  the  case  of  a  legal  person,  the  recipient’s  full  legal  name  and  VAT 
identification number or tax identification number, where available, or another 
unique identifier established at the national level; 

(b) 

in the case of a natural person, the first and last name(s) of the recipient; 

(c) 

the amount received by the recipient, as well as reforms and investments under 
the Ukraine Plan this amount contributes to implement.  

The  information  referred  to  in  paragraph  2  shall  not  be  published  where  disclosure 
risks  threatening  the  rights  and  freedoms  of  the  persons  or  entities  concerned  or 
seriously harming the commercial interests of the recipients. 

Ukraine shall transmit electronically to the Commission at least once a year the data 
on the persons and entities referred to in paragraph 1 with the exception of the data 
referred  to  in  paragraph  3,  in  a  format  to  be  defined  in  the  Framework  agreement 
referred to in Article 9(4), point (i). 

CHAPTER IV 

Pillar II: Ukraine Investment Framework 

Article 27 
Scope and structure 

Under the Ukraine Investment Framework the Commission shall provide the  Union 
support  to  Ukraine  in  the  form  of  budgetary  guarantee,  financial  instruments  or 
blending operations. 

The Commission shall be supported by an operational board in the implementation of 
the  Ukraine  Investment  Framework.  The  Commission  shall  propose  the  rules  of 
procedure for the operational board. 

The  operational  board  of  the  Ukraine  Investment  Framework  shall  comprise 
representatives  of  the  Commission,  of  each  Member  State,  and  representatives  of 
Ukraine.  Counterparts 
financial 
instruments supported by the Ukraine Investment Framework may be given observer 
status. The Commission shall chair the operational board.  

the  Ukraine  Guarantee  and 

implementing 

The  operational  board  shall  provide  advice  to  the  Commission  on  the  choice  of 
support  modalities,  the  design  of  financial  products  to  be  deployed,  and  on  non-
eligible sectors. It shall formulate opinions on the use of Union support through the 
Ukraine Guarantee, financial instruments and blending operations. 

The  Commission  shall  ensure  that  Union  support  provided  under  the  Ukraine 
Investment  Framework  is  consistent  with  the  Ukraine  Plan  and  contributes  to  its 
implementation, and complementary to Union support to Ukraine agreed under other 
Union programmes and instruments. 

3. 

4. 

1. 

2. 

3. 

4. 

5. 

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41 

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6. 

7. 

8. 

1. 

2. 

3. 

1. 

2. 

3. 

For the purpose of Article 209(2), points (d) and (h), of Regulation  (EU, Euratom) 
2018/1046,  the  requirement  on  ex  ante  evaluations  of  financial  instruments  and 
budgetary guarantees shall be met by the positive assessments of the Ukraine Plan by 
the Commission, referred to in Article 19(2) of this Regulation. 

The  support  under  the  Ukraine  Investment  Framework  shall  in  particular  serve  the 
implementation of the Ukraine Plan referred to in Chapter III, while complementing 
the financing sources established in this Regulation. 

The Commission shall report on the implementation of the support under the Ukraine 
Investment Framework in accordance with Articles 41(4) and (5) of Regulation (EU, 
Euratom)  2018/1046.  For  that  purpose,  each  counterpart  of  the  Ukraine  Guarantee 
and  each  entrusted  entity  implementing  financial  instruments  shall  provide  on  an 
annual basis the information necessary to allow the Commission to comply with its 
reporting obligations. 

Article 28 
Additional contributions to the Ukraine Guarantee and to the financial instruments 

Member  States,  third  countries,  and  third  parties  may  contribute  to  the  Ukraine 
Guarantee,  and  to  the  financial  instruments  set  up  under  the  Ukraine  Investment 
Framework.  Contributions  to  the  Ukraine  guarantee  shall  be  made  in  accordance 
with Article 218(2) of Regulation (EU, Euratom) 2018/1046. 

The contributions to the Ukraine Guarantee shall increase the amount of the Ukraine 
Guarantee without leading to additional contingent liabilities for the Union. 

For  all  contributions  referred  to  in  paragraph  1,  a  contribution  agreement  shall  be 
concluded between the Commission, on behalf of the Union, and the contributor. It 
shall contain, in particular, provisions concerning the payment conditions. 

Article 29 
Implementation of the Ukraine Guarantee and the financial instruments 

The  Ukraine  Guarantee  and  financial  instruments  supported  under  the  Ukraine 
Investment  Framework  shall  be  implemented  in  indirect  management  pursuant  to 
Article 62(1), first subparagraph, point (c), of Regulation (EU, Euratom) 2018/1046. 

The eligible counterparts for the purposes of the Ukraine Guarantee and the eligible 
entrusted entities for the purpose of financial instruments shall be those identified in 
Article  208(4)  of  Regulation  (EU,  Euratom)  2018/1046,  including  those  from  third 
countries contributing to the Ukraine Guarantee in accordance with Article 28 of this 
Regulation.  In  addition,  by  way  of  derogation  from  Article  62(1),  point  (c),  of 
Regulation (EU, Euratom) 2018/1046, bodies governed by private law of a Member 
State,  or  a  third  country  which  has  contributed  to  the  Ukraine  Guarantee  in 
accordance with Article 28 of this Regulation, and which provide adequate assurance 
of  their  financial  and  operational  capacity  shall  be  eligible  for  the  purpose  of  the 
Ukraine Guarantee.  

The  Commission  shall  ensure  the  effective,  efficient  and  fair  use  of  available 
resources among eligible counterparts and, where relevant, eligible entrusted entities, 
in an inclusive approach, while promoting cooperation between them and taking due 
account of their capacities, added value, experience and risk-taking capacity. 

EN 

42 

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4. 

1. 

2. 

The  Commission  shall  ensure  fair  treatment  for  all  eligible  counterparts  and  all 
eligible  entrusted  entities  and  shall  ensure  that  conflicts  of  interest  are  avoided 
throughout  the  implementation  period  of  the  Ukraine  Investment  Framework.  In 
order  to  ensure  complementarity,  the  Commission  may  request  any  relevant 
information  from  eligible  counterparts  for  the  purpose  of  the  Ukraine  guarantee  or 
from  eligible  entrusted  entities  for  the  purpose  of  financial  instruments  about  their 
non-EU-supported operations. 

Article 30 
Ukraine Guarantee 

The Ukraine Guarantee of EUR 8 914 000 000 in current prices shall be established 
to  guarantee  operations  supporting  the  objectives  of  the  Facility.  The  Ukraine 
Guarantee shall be independent and autonomous from the External Action Guarantee 
established  by  Regulation  (EU)  2021/947  and  shall  be  granted  as  an  irrevocable, 
unconditional  and  on  demand  guarantee  in  accordance  with  Article  219(1)  of 
Regulation (EU, Euratom) 2018/1046. 

The  Ukraine  Guarantee  shall  be  used  to  cover  the  risks  for  the  following  types  of 
operations:  

(a) 

loans, including local currency loans; 

(b)  guarantees; 

(c) 

counter-guarantees; 

(d) 

capital market instruments; 

(e) 

any  other  form  of  funding  or  credit  enhancement,  insurance,  and  equity  or 
quasi-equity participations. 

3. 

On  behalf  of  the  Union,  the  Commission  shall  conclude  with  eligible  counterparts 
Ukraine Guarantee agreements until 31 December 2027. The Ukraine guarantee may 
be granted gradually. 

The  Commission  shall  provide  information  on  the  signature  of  each  Ukraine 
Guarantee agreement in  the reports referred to in Article  27(8). Upon their request, 
those  agreements  shall  be  made  available  to  the  European  Parliament  and  the 
Council,  taking  into  account  the  protection  of  confidential  and  commercially 
sensitive information. 

4. 

The Ukraine Guarantee agreements shall contain, in particular:  

(a) 

detailed  rules  on  the  coverage,  estimated  annual  investments,  requirements, 
eligibility, and procedures; 

(b)  detailed  rules  on  the  provision  of  the  Ukraine  Guarantee,  including  its 
arrangements  on  the  coverage  and  its  defined  coverage  of  portfolios  and  of 
projects of specific types of instruments, as well as a  risk analysis of projects 
and project portfolios, including at sectoral, regional, and national levels;  

(c) 

(d) 

a reference to the objectives and purpose of the Facility, an assessment of the 
needs and an indication of the expected results;  

the remuneration of the Ukraine Guarantee, which shall be set on concessional 
terms  reflecting  the  specific  situation  of  war-damaged  Ukraine,  while  taking 

EN 

43 

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into account the respective risk profiles of the investment programmes in order 
to ensure a level playing field; 

(e) 

requirements  for  the  use  of  the  Ukraine  Guarantee,  including  payment 
conditions,  such  as  specific  time  frames,  interest  to  be  paid  on  due  amounts, 
expenses and recovery costs and possibly necessary liquidity arrangements; 

(f) 

claims procedures, including, but not limited to, triggering events and waiting 
periods, and procedures regarding the recovery of claims; 

(g)  monitoring, reporting, transparency and evaluation obligations; 

(h) 

clear  and  accessible  complaints  procedures  for  third  parties  that  could  be 
affected  by  the  implementation  of  projects  supported  by  the  Ukraine 
Guarantee. 

5. 

The Commission  may use up to  30% of the amount referred in  paragraph 1 of this 
Article  to  increase  the  amounts  of  the  guarantee  provided  through  External  Action 
Guarantee  agreements  concluded  pursuant  to  Article  38  of  Regulation  (EU) 
2021/947 subject to the following: 

(a) 

(b) 

(c) 

(d) 

for the purpose of this paragraph, the Ukraine Guarantee shall be implemented 
by an amendment or an addendum to agreements concluded pursuant to Article 
38  of  Regulation  (EU)  2021/947  with  the  eligible  counterparts  selected 
pursuant  to  Article  35  of  Regulation  (EU)  2021/947  increasing  the  guarantee 
amount  under  those  agreements,  to  be  signed  within  four  months  from  the 
entry into force of this Regulation; 

the eligible counterparts shall use the Ukraine Guarantee under this paragraph 
solely for the support of the implementation of the operations in Ukraine and 
only guarantee calls from operations in Ukraine are eligible for coverage by the 
Ukraine Guarantee under this paragraph;  

by  way  of  derogation  from  the  second  subparagraph  of  Article  36(1)  of 
Regulation  (EU)  2021/947  the  operations  covered  by  the  Ukraine  Guarantee 
under this paragraph shall constitute a separate portfolio of Ukraine Guarantee 
and  shall  not  be  taken  into  account  for  the  purposes  of  calculating  the  65% 
coverage referred to in Article 36(1) of Regulation (EU) 2021/947; 

the risk sharing in the separate portfolio of the Ukraine Guarantee shall ensure 
alignment of interest  between the Commission  and the eligible counterpart in 
accordance with Article 209(2)(e) of Regulation (EU, Euratom) 2018/1046 and 
the  counterpart  shall  contribute  with  their  own  resources  to  this  portfolio  in 
accordance with Article 219(4) of Regulation (EU, Euratom) 2018/1046; 

(e) 

the  counterparts  shall  establish  separate  accounting  and  reporting  for  the 
implementation of the Ukraine Guarantee under this paragraph; 

(f)  Article 31 shall apply to the provisioning of the Ukraine Guarantee under this 
paragraph.  The  provisioning  shall  be  exclusively  used  for  coverage  of  losses 
under Ukraine Guarantee. The provisioning established under Article 31(5) of 
Regulation (EU) 2021/947 shall not be used for the coverage of the operations 
under the Ukraine Guarantee. 

6. 

The  eligible  counterpart  shall  approve  financing  and  investment  operations  in 
accordance  with  its  own  rules  and  procedures  and  in  compliance  with  the  Ukraine 
Guarantee agreement. 

EN 

44 

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7. 

The  maximum  period  allowed  for  eligible  counterparts  to  sign  contracts  with 
financial intermediaries or final recipients shall be three years after the conclusion of 
the  relevant  Ukraine  Guarantee  agreement,  with  possible  extensions  when  an 
additional amount of guarantee is granted and the guarantee agreement is amended. 

8. 

The Ukraine Guarantee may cover:  

(a) 

(b) 

(c) 

(d) 

for  debt  instruments,  the  principal  and  all  interests  and  amounts  due  to  the 
selected  eligible  counterpart,  but  not  received  by  it  in  accordance  with  the 
terms of the financing operations after an event of default has occurred; 

for  equity  investments,  the  amounts  invested  and  their  associated  funding 
costs; 

for  other  financing  and  investment  operations  referred  to  in  paragraph  2,  the 
amounts used and their associated funding costs; 

all relevant  expenses  and  recovery  costs related  to  an event  of default, unless 
deducted from recovery proceeds. 

For  the  purposes  of  the  Commission’s  accounting  and  its  reporting  of  the  risks 
covered  by  the  Ukraine  Guarantee,  and  in  accordance  with  Article  209(4)  of 
Regulation  (EU,  Euratom)  2018/1046,  eligible  counterparts  with  which  an  Ukraine 
Guarantee  agreement  has  been  concluded  shall  provide  the  Commission  and  the 
Court  of  Auditors  annually  with  the  financial  reports  on  financing  and  investment 
operations  covered  by  this  Regulation,  audited  by  an  independent  external  auditor, 
containing, among others, information on:  

(a) 

including 

the  risk  assessment  of  financing  and  investment  operations  of  the  eligible 
counterparts, 
in 
information  on  Union 
compliance  with  the  accounting  rules  referred  to  in  Article  80  of  Regulation 
(EU,  Euratom)  2018/1046  and  International  Public  Sector  Accounting 
Standards; 

liabilities  measured 

(b) 

the  outstanding  financial  obligation  for  the  Union  arising  from  the  Ukraine 
Guarantee  provided  to  the  eligible  counterparts  and  their  financing  and 
investment operations, broken down by individual operation. 

The condition set out in  Article 219(4) of Regulation (EU, Euratom) 2018/1046 on 
contributions  with  own  resources  shall  apply  to  each  eligible  counterpart  allocated 
with a budgetary guarantee under the Ukraine Investment Framework on a portfolio 
basis. 

The European Fund for Sustainable Development Plus+ risk management framework 
referred to in Articles 33(7) and (8) of Regulation (EU) 2021/947 shall apply to the 
Ukraine  Guarantee.  The  overall  risk  profile  of  operations  covered  by  the  Ukraine 
Guarantee  may  be  different  from  the  overall  risk  profile  of  the  External  Action 
Guarantee.  The  Commission  shall  ensure  that  the  risk  entailed  by  the  guaranteed 
operations  does  not  exceed  the  capacity  of  the  Union  budget  to  bear  those  risks  as 
determined by the available budgetary resources and the provisioning rate referred to 
in Article 31(1) of this Regulation. 

9. 

10. 

10. 

1. 

The provisioning rate for the Ukraine Guarantee shall initially be 70%.  

Article 31 
Provisioning 

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By  derogation  from  Article  211(2),  second  sentence  of  the  second  subparagraph  of 
Regulation (EU, Euratom) 2018/1046, the provisioning shall be constituted until 31 
December  2027  and  be  equal  to  the  amount  of  provisioning  corresponding  to  the 
Ukraine guarantee granted and may be constituted gradually to reflect the progress in 
selection and implementation of the financing and investment operations supporting 
the objectives of the Facility. 

The provisioning rate shall be reviewed at least every year from the entry into force 
of this Regulation. 

The Commission is empowered to adopt a delegated act in accordance with Article 
38 to amend the provisioning rate while applying the criteria set out in Article 211(2) 
of  the  Regulation  (EU,  Euratom)  2018/1046,  and,  where  relevant,  to  increase  or 
decrease  the  maximum  amount  of  guarantee  referred  to  in  Article  30(1)  of  this 
Regulation by up to 30%. The Commission may only increase the maximum amount 
of  the  guarantee  if  the  provisioning  rate  is  decreased.  Without  prejudice  to  Article 
30(3), the Commission may provide that the increased amount of the guarantee shall 
be available for signature of guarantee agreements gradually over three years. 

By way of derogation from Article 213 of Regulation (EU, Euratom) 2018/1046, the 
effective  provisioning  rate  shall  not  apply  to  the  provisioning  set  aside  in  the 
common provisioning fund in respect of the Ukraine Guarantee. 

CHAPTER V 

Pillar III: Union accession assistance and support measures 

Article 32 
EU accession assistance and support measures 

Assistance under this Chapter shall support Ukraine in attaining the objectives set out 
in Article 3. In particular, assistance provided under this Chapter shall aim to support 
Ukraine’s  progressive  alignment  to  Union  ‘acquis’  with  a  view  to  future  Union 
membership, thereby contributing to mutual stability, security, peace and prosperity. 
Such  support  shall  include  strengthening  of  the  rule  of  law,  democracy,  respect  of 
human  rights  and  fundamental  freedoms,  reinforcing  of  the  effectiveness  of  public 
administration and supporting transparency, structural reforms, sectoral policies and 
good  governance  at  all  levels.  Such  support  should  also  contribute  to  the 
implementation of the Plan. 

Assistance  under  this  Chapter  shall  also  be  provided  to  ensure  that  capacities  of 
stakeholders,  including  social  partners,  civil  society  organisations  and  local 
authorities are strengthened. 

Assistance  under  this  Chapter  shall  also  support  confidence-building  measures  and 
processes  that  promote  justice,  truth-seeking,  reparations  as  well  as  collection  of 
evidence  of  crimes  committed  during  the  war.  Funding  for  initiatives  and  bodies 
involved  in  supporting  and  enforcing  international  justice  in  Ukraine  may  be 
provided under this Chapter. 

Assistance  under  this  Chapter  shall  support  the  creation  and  strengthening  of 
Ukrainian authorities responsible for ensuring appropriate use of funds and effective 

2. 

3. 

4. 

1. 

2. 

3. 

4. 

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46 

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5. 

6. 

1. 

fight  against  mismanagement  of  public  funding,  in  particular  fraud,  corruption, 
conflict  of  interests  and  irregularities  incurred  in  relation  to  any  amount  spent  to 
achieve the objectives of the Facility. 

The functioning of the Audit Board as referred to in Article 34 shall be funded under 
this Chapter. 

The  borrowing  costs  subsidy  referred  to  in  Article  22  shall  be  funded  under  this 
Chapter. 

CHAPTER VI 

Protection of the financial interests of the Union 

Article 33 
Protection of the financial interests of the Union 

In  implementing  the  Facility,  the  Commission  and  Ukraine  shall  take  all  the 
appropriate  measures  to  protect  the  financial  interests  of  the  Union,  taking  into 
account the principle of proportionality and the specific conditions under which the 
Facility will operate, the precondition set out in Article 5(1) and conditions set out in 
the  framework  agreement  and  specific  financing  or  loan  agreements,  in  particular 
regarding  the  prevention,  detection  and  correction  of  fraud,  corruption,  conflicts  of 
interests  and  irregularities.  Ukraine  shall  commit  to  progressing  towards  effective 
and efficient management and control systems and ensure that amounts wrongly paid 
or incorrectly used can be recovered.  

2. 

The agreements referred to in Articles 9, 10 and 21 shall provide for the obligations 
of Ukraine: 

(a) 

(b) 

(c) 

(d) 

to regularly check that the financing provided has been used in accordance with 
the  applicable  rules,  in  particular  regarding  the  prevention,  detection  and 
correction of fraud, corruption, conflicts of interests and irregularities; 

to  take  appropriate  measures  to  prevent,  detect  and  correct  fraud,  corruption, 
conflicts  of  interests  and  irregularities  affecting  the  financial  interests  of  the 
Union, to avoid double funding and to take legal actions to recover funds that 
have  been  misappropriated,  including  in  relation  to  any  measure  for  the 
implementation of reforms and investment projects under the Ukraine Plan; 

to accompany a request for payment as set out in Chapter III by a declaration 
that  the  funds  were  used  in  accordance  with  the  principle  of  sound  financial 
management  and  for  their  intended  purpose  and  managed  appropriately  in 
particular  in  accordance  with  Ukrainian  rules  complemented  by  international 
standards,  on  prevention,  detection  and  correction  of  irregularities,  fraud, 
corruption and conflicts of interests;  

for  the  purpose  of  paragraph  1  of  this  Article,  in  particular  for  checks  on  the 
use  of  funds  in  relation  to  the  implementation  of  reforms  and  investments  of 
the Ukraine  Plan, to  ensure the collection of, and access  to,  adequate data on 
persons  and  entities  receiving  funding  for  the  implementation  of  measures  of 
the Ukraine Plan under chapter III of the Facility; 

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(e) 

to  expressly  authorise  the  Commission,  OLAF,  the  Court  of  Auditors  and, 
where applicable, EPPO to exert their rights as provided for in Article 129(1) 
of  Regulation  (EU,  Euratom)  2018/1046,  in  application  of  the  principle  of 
proportionality. 

The  Commission  shall  strive  to  make  available  to  Ukraine  an  integrated  and 
interoperable information and monitoring system including a single data-mining and 
risk-scoring tool to access and analyse the relevant data, including the data listed in 
paragraph  2(d).  Where  such  a  system  is  available,  Ukraine  shall  use  and  feed  the 
relevant data into the system, including with support referred to under Chapter V. 

The agreements referred to in Articles 9, 10 and 21 shall also provide for the right of 
the  Commission  to  reduce  proportionately  the  support  provided  under  the  Facility 
and recover any amount spent to achieve the objectives of the Facility or to ask for 
early repayment of the loan, in cases of irregularities, fraud, corruption and conflicts 
of interests affecting the financial interests of the Union that have not been corrected 
by Ukraine, or of a serious breach of an obligation resulting from such agreements. 
When  deciding  on  the  amount  of  the  recovery  and  reduction,  or  the  amount  to  be 
repaid early, the Commission shall respect the principle of proportionality and shall 
take into account the seriousness of the irregularity, fraud, corruption or conflict of 
interests affecting the financial interests of the Union, or of a breach of an obligation. 
Ukraine  shall  be  given  the  opportunity  to  present  its  observations  before  the 
reduction is made or early repayment is requested. 

Persons and entities implementing funds under the Facility shall report any suspected 
or actual  cases, of fraud, corruption, conflict of interests and irregularities affecting 
financial  interests  of  the  Union  without  delay,  to  the  Audit  Board  referred  to  in 
Article 34, the Commission and OLAF. 

Article 34 
Audit Board 

The Commission shall establish an Audit Board before the submission by Ukraine of 
the first payment request.  

The  Audit  Board  shall  be  composed  of  independent  members  appointed  by  the 
Commission. Representatives of Member States and other donors may be invited by 
the Commission to participate in the activities of the Audit Board. 

The  Audit  Board  shall  exercise  its  functions in  complete  objectivity  and  operate  in 
compliance  with  best  applicable  international  practices  and  standards.  It  shall  act 
without  prejudice  to  the  powers  of  the  Commission,  OLAF,  the  Court  of  Auditors 
and, where applicable, the EPPO. 

The  Audit  Board  shall  ensure  regular  dialogue  and  cooperation  with  the  European 
Court of Auditors.  

In carrying out their duties, the Audit Board, its members and its staff shall neither 
seek  nor  take  instructions  from  the  Ukrainian  government  or  any  institution,  body, 
office or agency. Strong guarantees of independence shall apply for the selection of 
its staff, management and budget.  

The Audit  Board shall assist  the Commission in fighting mismanagement of Union 
funding  under  the  Facility  and,  in  particular  fraud,  corruption,  conflict  of  interests 

3. 

4. 

5. 

1. 

2. 

3. 

4. 

5. 

6. 

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48 

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and irregularities incurred in relation to any amount spent to achieve the objectives of 
the Facility.  

7. 

For  that  purpose,  the  Audit  Board  shall  regularly  report  to  the  Commission,  and 
transmit  to  the  Commission  without  delay  any  information  it  obtains  or  is  made 
aware  of,  on  any  identified  cases  of,  or  serious  concerns  in  relation  to, 
mismanagement  of  public  funding  incurred  in  relation  with  any  amount  spent  to 
achieve the objectives of the Facility. 

In  addition,  the  Audit  Board  shall  adopt  recommendations  to  Ukraine  on  all  cases 
where  in  its  views  competent  Ukrainian  authorities  have  not  taken  the  necessary 
steps  to  prevent,  detect  and  correct  fraud,  corruption,  conflict  of  interests  and 
irregularities  that  have  affected  or  seriously  risk  affecting  the  sound  financial 
management of the expenditure financed under the Facility and in all cases where it 
identifies weaknesses affecting the design and functioning of the control system put 
in  place  by  Ukrainian  authorities.  Ukraine  shall  implement  such  recommendations, 
or provide a justification on why it has not done so.  

The  reports  of,  and  information  from,  the  Audit  Board  shall  also  be  sent  to  OLAF 
and  may  be  shared  with  the  relevant  Ukrainian  authorities,  especially  in  case  they 
need to take steps to prevent, detect and correct fraud, corruption, conflict of interests 
and irregularities.  

The Audit Board shall have access to information, databases and registries required 
to carry out its tasks. The framework agreement referred to in Article 9 shall define 
rules  and  details  for  the  access  to  relevant  information  by  the  Audit  Board  and  the 
provision of relevant information by Ukraine to the Audit Board.  

The  Audit  Board  may  assist  the  Commission  in  supporting  Ukraine  with  capacity 
building activities in the field of fight against mismanagement of public funding. 

8. 

9. 

10. 

The functioning of the Audit Board shall be funded under Chapter V. 

CHAPTER VII 

Work programmes, monitoring, reporting and evaluation 

Article 35 
Work programmes 

1. 

2. 

Assistance under the Facility shall be implemented by work programmes referred to 
in Article 110 of Regulation (EU, Euratom) 2018/1046. Implementing acts adopting 
work  programmes  shall  be  adopted  in  accordance  with  the  examination  procedure 
referred to in Article 39. 

Assistance under Chapter V of the Facility can also be implemented by specific work 
programmes  when  the  implementation  of  this  assistance  does  not  require  the 
conclusion of agreements referred to in Articles 9 and 10. 

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1. 

2. 

3. 

4. 

5. 

1. 

2. 

Article 36 
Monitoring and reporting 

The  Commission  shall  monitor  the  implementation  of  the  Facility  and  assess  the 
achievement of the objectives set out in Article 3. The monitoring of implementation 
shall be targeted and proportionate to the activities carried out under the Facility. 

The financing agreements and loan agreement referred to in Article 10 and 21 shall 
set out ules and modalities for Ukraine to report to the Commission for the purpose 
of paragraph 1 of this Article.  

The  Union  support  provided  under  the  Ukraine  Investment  Framework  shall  be 
reported in accordance with Article 27(8). 

The Commission shall provide an annual report to the European Parliament and the 
Council on progress towards the achievement of the objectives of this Regulation.  

The Commission shall provide the report referred to in paragraph 4 to the Committee 
referred to in Article 39. 

Article 37 
Evaluation of the Facility 

After  31  December  2027,  but  by  31  December  2031  at  the  latest,  the  Commission 
shall carry out an ex-post evaluation of the Regulation. That ex-post evaluation shall 
assess the Union contribution to the achievement of the objectives of this Regulation. 

This ex-post evaluation shall make use of the good practice principles of the OECD 
Development  Assistance  Committee,  seeking  to  ascertain  whether  the  objectives 
have  been  met  and  to  formulate  recommendations  with  a  view  to  improving  future 
actions.  

The  Commission  shall  communicate  the  findings  and  conclusions  of  this  ex-post 
evaluation  accompanied  by  its  observations  and  follow-up,  to  the  European 
Parliament,  the  Council  and  the  Member  States.  This  ex-post  evaluation  may  be 
discussed at the request of Member States. The results shall feed into the preparation 
of programmes and actions and resource allocation. These evaluations and follow-up 
shall be made publicly available.  

The Commission shall, to an appropriate extent, associate all relevant  stakeholders, 
including  beneficiaries,  social  partners,  civil  society  organisations  and  local 
authorities  in  the  evaluation  process  of  the  Union’s  funding  provided  under  this 
Regulation, and may, where appropriate, seek to undertake joint evaluations with the 
Member States and other partners with close involvement of Ukraine. 

CHAPTER VIII 

Final provisions 

Article 38 
Exercise of delegation 

1. 

The power to adopt delegated acts shall be conferred on the Commission subject to 
the conditions laid down in this Article. 

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50 

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2. 

3. 

4. 

5. 

6. 

1. 

2. 

1. 

2. 

3. 

The power to adopt delegated acts referred to in Article 31 shall be conferred on the 
Commission for an indeterminate period from seven days after the entry into force of 
this Regulation. 

The delegations of power referred to in Article 31 may be revoked at any time by the 
European Parliament or by the Council. A decision to revoke shall put an end to the 
delegation  of  the  power  specified  in  that  decision.  It  shall  take  effect  on  the  day 
following  the  publication  of  the  decision  in  the  Official  Journal  of  the  European 
Union  or  at  a  later  date  specified  therein.  It  shall  not  affect  the  validity  of  any 
delegated acts already in force. 

Before adopting a delegated act, the Commission shall consult experts designated by 
each  Member  State 
the 
in  accordance  with 
Interinstitutional Agreement of 13 April 2016 on Better Law-Making. 

the  principles 

laid  down 

in 

As soon as it adopts a delegated act, the Commission shall notify it simultaneously to 
the European Parliament and to the Council. 

A  delegated  act  adopted  pursuant  to  Article  31  shall  enter  into  force  only  if  no 
objection  has  been  expressed  either  by  the  European  Parliament  or  by  the  Council 
within a period of one month of notification of that act to  the European Parliament 
and the Council or if, before the expiry of that period, the European Parliament and 
the  Council  have  both  informed  the  Commission  that  they  will  not  object.  That 
period shall be extended by one month at the initiative of the European Parliament or 
of the Council. 

Article 39 
Committee procedure 

The  Commission  shall  be  assisted  by  a  committee.  That  committee  shall  be  a 
committee within the meaning of Regulation (EU) No 182/2011. 

Where  reference  is  made  to  this  paragraph,  Article  5  of  Regulation  (EU)  No 
182/2011 shall apply. 

Article 40 
Information, communication and publicity 

The Commission may engage in communication activities to ensure the visibility of 
the Union funding for the financial support envisaged in the Ukraine Plan, including 
through  joint  communication  activities  with  Ukraine.  The  Commission  may,  as 
is  communicated  and 
that  support  under 
appropriate,  ensure 
acknowledged through a funding statement. 

the  Facility 

The  recipients  of  Union  funding  shall  acknowledge  the  origin  and  ensure  the 
visibility  of  the  Union  funding,  including,  where  applicable,  by  displaying  the 
emblem of the Union and an appropriate funding statement that reads ‘funded by the 
European  Union  –  Ukraine  Facility’,  in  particular  when  promoting  the  actions  and 
their results, by providing coherent, effective and proportionate targeted information 
to multiple audiences, including the media and the public. 

The Commission shall implement information and communication actions relating to 
the  Facility,  to  actions  taken  pursuant  to  the  Facility  and  to  the  results  obtained. 
Financial  resources  allocated  to  the  Facility  shall  also  contribute  to  the  corporate 

EN 

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communication of the political priorities of the Union, insofar as they are related to 
the objectives referred to in Article 3. 

Article 41 
Entry into force 

This  Regulation  shall  enter  into  force  on  the  day  following  that  of  its  publication  in  the 
Official Journal of the European Union. 

This Regulation shall be binding in its entirety and directly applicable in all Member States. 

Done at Brussels, 

For the European Parliament 
The President 

For the Council 
The President 

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LEGISLATIVE FINANCIAL STATEMENT 

FRAMEWORK OF THE PROPOSAL/INITIATIVE 

Title of the proposal/initiative 

Policy area(s) concerned 

The proposal/initiative relates to: 

Objective(s) 

1. 

1.1. 

1.2. 

1.3. 

1.4. 

1.4.1.  General objective(s) 

1.4.2. 

Specific objective(s) 

1.4.3.  Expected result(s) and impact 

1.4.4. 

Indicators of performance 

1.5. 

Grounds for the proposal/initiative 

1.5.1.  Requirement(s) to be met in the short or long term including a detailed timeline for 

roll-out of the implementation of the initiative 

1.5.2.  Added  value  of  Union  involvement  (it  may  result  from  different  factors,  e.g. 
coordination gains, legal certainty, greater effectiveness or complementarities). For 
the purposes of this point 'added value of Union involvement' is the value resulting 
from  Union  intervention,  which  is  additional  to  the  value  that  would  have  been 
otherwise created by Member States alone. 

1.5.3.  Lessons learned from similar experiences in the past 

1.5.4.  Compatibility  with  the  Multiannual  Financial  Framework  and  possible  synergies 

with other appropriate instruments 

1.5.5.  Assessment  of  the  different  available  financing  options,  including  scope  for 

redeployment 

1.6. 

Duration and financial impact of the proposal/initiative 

1.7.  Method(s) of budget implementation planned 

2. 

MANAGEMENT MEASURES 

2.1.  Monitoring and reporting rules 

2.2.  Management and control system(s) 

2.2.1. 

2.2.2. 

Justification of the management mode(s), the funding implementation mechanism(s), 
the payment modalities and the control strategy proposed 

Information concerning the risks identified and the internal control system(s) set up 
to mitigate them 

2.2.3.  Estimation and justification of the cost-effectiveness of the controls (ratio of "control 
costs ÷ value of the related funds managed"), and assessment of the expected levels 
of risk of error (at payment & at closure) 

2.3.  Measures to prevent fraud and irregularities 

3. 

ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE 

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3.1. 

Heading(s)  of  the  multiannual  financial  framework  and  expenditure  budget 
line(s) affected 

3.2. 

Estimated financial impact of the proposal on appropriations 

3.2.1. 

Summary of estimated impact on operational appropriations 

3.2.2.  Estimated output funded with operational appropriations 

3.2.3. 

Summary of estimated impact on administrative appropriations 

3.2.3.1.  Estimated requirements of human resources 

3.2.4.  Compatibility with the current multiannual financial framework 

3.2.5.  Third-party contributions 

3.3. 

Estimated impact on revenue 

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1. 

FRAMEWORK OF THE PROPOSAL/INITIATIVE  

1.1. 

Title of the proposal/initiative 

Proposal  for  a  Regulation  of  the  European  Parliament  and  of  the  Council  on 
establishing the Ukraine Facility 

1.2. 

Policy area(s) concerned  

EU relations with the rest of the world 

1.3. 

The proposal/initiative relates to:  

 a new action  

 a new action following a pilot project/preparatory action23  

 the extension of an existing action  

 a merger or redirection of one or more actions towards another/a new action  

1.4. 

Objective(s) 

1.4.1.  General objective(s) 

The strategic objective of the Ukraine Facility is to provide an integrated, medium-
term policy response to Ukraine’s recovery, reconstruction and modernisation needs, 
also supporting Ukraine’s accession path. 

The  Facility  is  designed  as  a  flexible  instrument,  adapted  to  the  uncertainty  and 
unprecedented  challenge  of  supporting  a  country  at  war,  while  ensuring 
predictability, transparency, and accountability of the funds. 

1.4.2. 

Specific objective(s) 

The  Facility  will  support  Ukraine’s  efforts  to  recover  from  the  impacts  of  the  war, 
rebuild  and  modernise  the  country  whilst  implementing  key  reforms  on  its  EU 
accession path, with the aim to support Ukraine’s transition towards a green, digital, 
and inclusive economy that is progressively aligned with Union rules and standards. 

1.4.3.  Expected result(s) and impact 

Specify the effects which the proposal/initiative should have on the beneficiaries/groups targeted. 

Support under the Facility is expected to  enable Ukraine to implement reforms and 
investments  needed  for  its  recovery,  reconstruction  and  modernisation,  raise  the 
growth rate of the Ukrainian economy and help the country emerge stronger after the 
war. It is also expected to promote Ukraine’s convergence with the Union. 

1.4.4. 

Indicators of performance 

Specify the indicators for monitoring progress and achievements. 

Output indicators: 

Adoption of the Ukraine Plan by the Council;  

Overall financial contribution allocated to the plans; 

Result indicators: 

23 

As referred to in Article 58(2)(a) or (b) of the Financial Regulation. 

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Implementation of the Ukraine Plan;  

Impact indicators: 

The objectives set out in Article 3, in particular as regards recovery, reconstruction 
and modernisation, as well as alignment of Ukraine with  the Union acquis, and the 
objectives  set  in  the  Ukraine  Plan,  being  achieved  due,  inter  alia,  to  the  financial 
support received. 

1.5. 

Grounds for the proposal/initiative  

1.5.1.  Requirement(s) to be met in the short or long term including a detailed timeline for 

roll-out of the implementation of the initiative 

Russia’s  war  of  aggression  has  caused  extensive  damage  to  infrastructure  and 
services  across Ukraine. The resulting humanitarian crisis has displaced millions of 
Ukrainians  from  their  homes  and  left  many  in  desperate  need  of  food,  shelter  and 
medical assistance. 

1.5.2.  Added  value  of  Union  involvement  (it  may  result  from  different  factors,  e.g. 
coordination gains, legal certainty, greater effectiveness or complementarities). For 
the purposes of this point 'added value of Union involvement' is the value resulting 
from  Union  intervention,  which  is  additional  to  the  value  that  would  have  been 
otherwise created by Member States alone. 

Action  at  Union  level  is  necessary  to  achieve  a  fast  and  robust  Ukraine 
reconstruction,  and  to  support  investments  needed  for  rebuilding  the  country  and 
reforms that will foster Ukraine’s EU accession path. The size of damages caused to 
Ukraine  by  Russia’s  war  of  aggression  is  such  that  Ukraine  will  require  extensive 
and sustained external support that no Member State, or single donor, could provide 
alone. The Union is in a unique position to deliver multi-annual external assistance to 
Ukraine in a timely, coordinated and predictable manner. The Union can leverage its 
borrowing capacity to lend to Ukraine on advantageous terms and cover the costs of 
interest  rates,  as  well  as  providing  grants  and  guarantees  in  a  multi-annual 
perspective.  

1.5.3.  Lessons learned from similar experiences in the past 

While  the  Facility  is  to  a  large  extent  an  unprecedented  instrument  designed  to 
respond  to  a  specific  situation  faced  by  a  country  at  war,  which  is  a  neighbouring 
country of the Union as well as being a candidate for membership of the Union, the 
proposal  Facility  builds  on  the  experience  of  past  and  current  support  provided  to 
Ukraine  and  other  third  countries,  as  well  as  on  the  lessons  learned  from  the 
Recovery and Resilience Facility, which was established in 2020, while accounting 
for the specific circumstances of Ukraine being a country at war. 

1.5.4.  Compatibility  with  the  Multiannual  Financial  Framework  and  possible  synergies 

with other appropriate instruments 

The  proposed  Facility  aims  at  equipping  the  Union  with  a  legal  instrument  which 
will allow it to ensure an integrated and consistent approach to supporting Ukraine. 
This  single,  integrated  instrument  will  encompass  and  thereby  replace  existing 
bilateral support provided to Ukraine through separate instruments (Macro-financial 
assistance+,  NDICI)  while  providing  support  that  Ukraine,  as  a  candidate  country, 
would normally receive under the Instrument for Pre-accession Assistance. This will 
enhance  coherence,  effectiveness,  efficiency  and  EU  added  value  of  the  Union’s 

EN 

4 

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support  to  Ukraine.  It  will  contribute  to  leveraging  the  use  of  Union  funds  and 
avoiding duplication.  

This new legislative proposal for the Ukraine Facility is accompanied by a proposal 
for  a  Council  Regulation  COM(2023)  337,  amending  Regulation  2020/2093  laying 
down  the  multiannual  financial  framework  (MFF)  for  the  years  2021  to  2027  (see 
sections 1.5.5 and 3.2.4). 

The  overall  amount  of  the  Facility  proposed  in  the  context  of  the  MFF  mid-term 
review is to be provided through loans, non repayable support, and provisioning for 
budgetary guarantees. The amount other than in the form of loans is to be decided by 
the Council and the European Parliament as part of the annual budgetary procedure. 
The overall amount of disbursements of the loans will take into account the amounts 
made  available  for  all  other  forms  of  support  and  the  overall  maximum  amount  of 
EUR 50 billion for 2024-2027. 

1.5.5.  Assessment  of  the  different  available  financing  options,  including  scope  for 

redeployment 

the  2021-2027  MFF  was  not  designed 

The  Union  budget  provided  tremendous  support  through  flexibilities  and  re-
prioritisations,  but 
the 
consequences  of  a  war  in  Europe.  Ukraine’s  liquidity  needs  for  macro-financial 
stability  remain  high,  and  investment  in  Ukraine’s  fast  recovery  and  reconstruction 
cannot wait until the war ends. The Union should be in a position to provide support 
for evolving needs, with the ability to adjust and scale up forms of support over time. 
Sustaining  economic  activity  and  rebuilding  basic  infrastructure  would  generate 
employment and revenues, give refugees a perspective to return home, raise revenues 
for  the  state  budget,  attract  private  sector  investment  and,  ultimately,  lower  the 
volume of international assistance needed. 

to  address 

To  cater  for  Ukraine’s  short-term  recovery  as  well  as  long-term  reconstruction,  the 
Commission proposes to establish the Ukraine Facility. Support will be provided in 
the  form  of  repayable  (loans)  and  non-repayable  support  and  provisioning  for 
budgetary guarantees. 

The Facility will be funded by loans guaranteed over and above the MFF ceilings as 
well as a new special instrument over and above the ceilings of the MFF, the Ukraine 
Reserve,  as  part  of  the  amendment  to  Council  Regulation  (EU,  Euratom) 
2020/209324.  The  Ukraine  Reserve  may  support  all  expenditure  other  than  in  the 
form  of  loans,  including  non-repayable  support,  grants  and  provisioning  for 
guarantees. The amendment to the MFF Regulation also establishes that the Ukraine 
Reserve shall aim at providing at least EUR 2.5 billion in current prices as an annual 
indicative amount.  

Member  States,  third  countries,  international  organisations,  international  financial 
institutions  or  other  sources  may  provide  additional  financial  contributions  to  the 
Facility,  which  will  constitute  external  assigned  revenue  within  the  meaning  of 
Article  21(2),  points  (a)(ii),  (d),  and  (e)  of  Regulation  (EU,  Euratom)  2018/1046. 
Additional  amounts  received  as  external  assigned  revenue  within  the  meaning  of 
Article 21(5) of Regulation (EU, Euratom) 2018/1046 under the relevant Union legal 

24 

COM(2023) 337 final 

EN 

5 

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acts  in  relation  to  restrictive  measures  in  view  of  Russia's  actions  destabilising  the 
situation in Ukraine will be added to the resources for the Facility. 

EN 

6 

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1.6. 

Duration and financial impact of the proposal/initiative 

 limited duration  

–    in effect from [DD/MM]YYYY to [DD/MM]YYYY  

–   Financial impact from 2024 to 2027 for commitment appropriations and from 

2024 for payment appropriations.  

 unlimited duration 

–  Implementation with a start-up period from YYYY to YYYY, 

–  followed by full-scale operation. 

1.7.  Method(s) of budget implementation planned25  

 Direct management by the Commission 

–   by its departments, including by its staff in the Union delegations;  

–    by the executive agencies  

 Shared management with the Member States  

 Indirect management by entrusting budget implementation tasks to: 

–   third countries or the bodies they have designated; 

–   international organisations and their agencies (to be specified); 

–   the EIB and the European Investment Fund; 

–   bodies referred to in Articles 70 and 71 of the Financial Regulation; 

–   public law bodies; 

–   bodies governed by private law with a public service mission to the extent that 

they are provided with adequate financial guarantees; 

–   bodies governed by the private law of a Member State that are entrusted with 
the  implementation  of  a  public-private  partnership  and  that  are  provided  with 
adequate financial guarantees; 

–   bodies or persons entrusted with the implementation of specific actions in the 
CFSP pursuant to Title V of the TEU, and identified in the relevant basic act. 

– 

If more than one management mode is indicated, please provide details in the ‘Comments’ section. 

Comments  

Article 8 details the forms of implementation for the pillars of the Facility, i.e. direct 
and indirect management in accordance with the Financial Regulation. 

25 

Details of budget implementation methods and references to the Financial Regulation may be found on 
the BUDGpedia site: https://myintracomm.ec.europa.eu/corp/budget/financial-rules/budget-
implementation/Pages/implementation-methods.aspx 

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2. 

MANAGEMENT MEASURES  

2.1.  Monitoring and reporting rules  

Specify frequency and conditions. 

Specific indicators will be defined in the Ukraine Plan, so that the  fulfilment of the 
conditions attached to the support under Pillar I can be monitored. Under Pillar I of 
the  Facility,  Ukraine  will  submit  according  to  a  fixed  quarterly  schedule  a  duly 
justified request for payment of the non-repayable financial support and of the loan, 
setting  out  how  the  satisfactory  fulfilment  of  those  conditions  has  been  achieved, 
based on indicators identified in the Decision approving the Plan. 

Under Pillar II of the Facility, the Commission will report on the implementation of 
the  support  provided  in  accordance  with  Articles  41(4)  and  (5)  of  Regulation  (EU, 
Euratom)  2018/1046.  For  that  purpose,  each  counterpart  of  the  Ukraine  Guarantee 
and  each  entrusted  entity  implementing  financial  instruments  will  provide,  on  an 
annual basis, the information necessary to allow the Commission to comply with its 
reporting obligations. 

The Commission will report annually to the European Parliament, the Council, and 
the  Committee  referred  to  in  Article  39  on  the  implementation  of  funds  provided 
under the Facility.  

The Commission will also carry out an ex-post evaluation of the Regulation. 

2.2.  Management and control system(s)  

2.2.1. 

Justification of the management mode(s), the funding implementation mechanism(s), 
the payment modalities and the control strategy proposed 

The Facility will be implemented under direct and indirect management. While pillar 
II  will  mainly  be  implemented  under  indirect  management  (through  guarantee 
agreements  concluded  with  pillar  assessed  financial  institutions),  and  pillar  III 
through  a  mix  of  direct  management  (e.g.  grant, 
twinning  and 
procurement)  and  indirect  management  (through  cooperation  with  pillar  assessed 
entities),  the  main  management  mode  for  pillar  I  will  be  direct  management  with 
direct transfer of funds to Ukraine State Budget.  

including 

The control strategy will be adapted to the implementation under each of these pillars 
with use of monitoring, evaluation and audits.  

Special  attention  will  be  paid  to  implementation  by  Ukraine  of  the  funds  made 
available under Pillar I. Payments will occur according to a fixed quarterly schedule, 
based  on  payment  requests  submitted  by  Ukraine  and  following  verification  by  the 
Commission  of  the  fulfilment  of  the  relevant  conditionalities.  The  quarterly 
frequency of payment windows will ensure both predictability of support to Ukraine 
and a constant policy dialogue between the Commission and Ukraine. 

The  multilayer  structure  of  the  control  mechanisms  in  place  (see  also  section  2.3) 
provides  an  integrated  framework  to  ensure  that  all  the  appropriate  measures  to 
protect  the  financial  interests  of  the  Union  are  in  place.  It  will  guarantee  that  the 
principle  of  proportionality  is  taken  into  account  and  the  specific  conditions  under 
which the Facility will operate. 

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2.2.2. 

Information concerning the risks identified and the internal control system(s) set up 
to mitigate them 

The main risk identified in relation to the financing relates to the non-achievement of 
conditions associated to the disbursement of funding.  

The measures that will be put in place to mitigate this risk are the following: 

– 

– 

– 

assessment by the Commission of the fulfilment of relevant conditions before 
the disbursement of funds, with possibility of withholding the funds;  

reduction of support provided, or recovery of any amount spent to achieve the 
objectives  of  the  Facility,  in  cases  of  irregularities,  fraud,  corruption  and 
conflicts of interests affecting the financial interests of the Union that have not 
been  corrected  by  Ukraine,  or  of  a  serious  breach  of  an  obligation  resulting 
from the agreements concluded with Ukraine 

suspension of funding in the event that Ukraine fails to fulfil the precondition 
set out in Article 5. 

2.2.3.  Estimation and justification of the cost-effectiveness of the controls (ratio of "control 
costs ÷ value of the related funds managed"), and assessment of the expected levels 
of risk of error (at payment & at closure)  

Financial contribution will be provided to Ukraine in the form of financing not linked 
to cost referred to in point (a) of Article 125(1) of the Financial Regulation.  

2.3.  Measures to prevent fraud and irregularities  

Specify existing or envisaged prevention and protection measures, e.g. from the Anti-Fraud Strategy. 

The proposal contains specific provisions for the protection of the financial interests 
of  the  Union.  The  Facility  will  be  equipped  with  a  strong  system  of  audit  and 
controls set out in a multilayer mechanism: first, the reform of the audit and control 
systems  of  the  Ukrainian  State  will  be  needed  as  part  of  the  reforms  under  the 
Ukraine  Plan;  second,  the  Commission  will  be  able  to  carry  out  checks  of  the 
implementation  of  the  funds  spent  in  relation  with  the  Plan  at  any  moment  of  the 
project  cycle;  third,  an  independent  Audit  Board  will  report  to  the  Commission  on 
possible mismanagement of funds under the whole Facility.  

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3. 

ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE  

3.1.  Multiannual financial framework- expenditure budget line(s) affected  

  New budget lines requested  

Budget line 

Type of 
expenditure 

Over and 
above MFF 
ceilings 

Number  

Diff./Non-
diff. 

from 
EFTA 
countries 

Contribution  

from 
candidate 
countries 
and 
potential 
candidates 

from 
other 
third 
countries 

other assigned 
revenue  

O 

O 

16.0106-  Support  expenditure  for  the 
Ukraine Facility 

16.06- Ukraine Facility 

NDA 

DA 

YES 

p.m. 

YES 

YES 

YES 

p.m. 

YES 

YES 

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3.2. 

Estimated financial impact of the proposal on appropriations  

3.2.1. 

Summary of estimated impact on operational appropriations  

–    The proposal/initiative does not require the use of operational appropriations  

–   The proposal/initiative requires the use of operational appropriations, as explained below: 

Heading of multiannual financial  
framework  

7 

‘Administrative expenditure’ 

EN 

11 

EN 

Type of support2024202520262027TotalNon repayable (grants)4.250                   4.250                 4.250                 4.250                 17.000                of which Pillar I 1.500                   1.500                1.500                1.500                6.000                 of which Pillar II 2.000                   2.000                2.000                2.000                8.000                 of which Pillar III 625                      625                    625                    625                    2.500                 of which administrative support (max amount)                        125                        125                        125                        125                        500   Loans for (pillar I only)8.250                   8.250                 8.250                 8.250                 33.000               Total**12.500                 12.500               12.500               12.500               50.000               Ukraine Facility indicative financing over and above the ceilings* (EUR million)*Annual and overall distribution of the non repayable support and loans is purely indicative and for illustrative purposes only. The actual distribution will be subject to the annual decision making.** Table assumes commitment appropriations equal payment appropriations. This is for pure illustrative purposes. Actual calibration of the two will be assessed on an annual needs basis. 
 
 
 
 
DG: NEAR 

 Human resources  

 Other administrative expenditure  

TOTAL DG NEAR 

Appropriations  

TOTAL appropriations 
under HEADING 7 
of the multiannual financial 
framework  

(Total 
commitments 
Total payments) 

= 

EUR million (to three decimal places) 

Year 
2024 

2,453 

0,238 

2,691 

Year 
2025 

2,453 

0,238 

2,691 

Year 
2026 

2,453 

0,238 

2,691 

Year 
2027 

2,453 

0,238 

2,691 

TOTAL 

9,811 

0,952 

10,763 

2,691 

2,691 

2,691 

2,691 

10,763 

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3.2.3. 

Summary of estimated impact on administrative appropriations  

–    The  proposal/initiative  does  not  require  the  use  of  appropriations  of  an 

administrative nature  

–  The proposal/initiative requires the use of appropriations of an administrative 

nature, as explained below: 

EUR million (to three decimal places) 

Year 
2024 26 

Year 
2025 

Year 
2026 

Year 
2027 

TOTAL 

HEADING 7 
of the multiannual 
financial framework 

Human resources  

Other administrative 
expenditure  

Subtotal HEADING 7 
of the multiannual 
financial framework  

Outside HEADINGS 
1727 
of the multiannual 
financial framework  

2,453 

0,238 

2,691 

2,453 

0,238 

2,453 

0,238 

2,453 

0,238 

9,811 

0,952 

2,691 

2,691 

2,691 

10,763 

Human resources  

16,224 

16,224 

16,224 

16,224 

64,896 

Other expenditure  
of an administrative 
nature 

Subtotal  
outside HEADINGS 1-
7 
of the multiannual 
financial framework  

26,970 

26,970 

26,970 

26,970 

107,880 

43,194 

43,194 

43,194 

43,194 

172,776 

TOTAL 

45,885 

45,885 

45,885 

45,885 

183,538 

The  appropriations  required  for  human  resources  and  other  expenditure  of  an  administrative  nature  will  be  met  by 
appropriations from the DG that are already assigned to  management of the action and/or have been redeployed within the 
DG,  together  if  necessary  with  any  additional  allocation  which  may  be  granted  to  the  managing  DG  under  the  annual 
allocation procedure and in the light of budgetary constraints. 

26 
27 

Year 2024 is the year in which implementation of the proposal/initiative starts.  
Technical  and/or  administrative  assistance  and  expenditure  in  support  of  the  implementation  of  EU programmes 
and/or actions (former ‘BA’ lines), indirect research, direct research. 

EN 

13 

  EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
3.2.3.1.  Estimated requirements of human resources  

–    The proposal/initiative does not require the use of human resources.  

–  The  proposal/initiative  requires  the  use  of  human  resources,  as  explained 

below: 

Estimate to be expressed in full time equivalent units 

Year 
2024 

Year 
2025 

Year 2026 

Year 2027 

 Establishment plan posts (officials and temporary staff) 

20 01 02 01 (Headquarters and Commission’s Representation 
Offices) 

20 01 02 03 (Delegations) 

01 01 01 01 (Indirect research) 

 01 01 01 11 (Direct research) 

Other budget lines (specify) 

 External staff (in Full Time Equivalent unit: FTE)28 

20 02 01 (AC, END, INT from the ‘global envelope’) 

20 02 03 (AC, AL, END, INT and JPD in the delegations) 

 16.0106-  Support  expenditure 
for the Ukraine Facility29 

- at Headquarters 

- in Delegations  

Other budget lines (specify) 

TOTAL 

11 

2 

11 

2 

11 

2 

68 

54 

68 

54 

68 

54 

11 

2 

68 

54 

135 

135 

135 

135 

The human resources required will be met by staff from the DG who are already assigned to management of the 
action  and/or  have  been  redeployed  within  the  DG,  together  if  necessary  with  any  additional  allocation  which 
may  be  granted  to  the  managing  DG  under  the  annual  allocation  procedure  and  in  the  light  of  budgetary 
constraints. 

Description of tasks to be carried out: 

Officials and temporary staff 

The  FTEs  sought  will  work  on  the  policy  development,  legal  issues,  with  particular 
focus on procurement matters, financial management, contract management, audit and 
evaluation. 

External staff 

The  FTEs  sought  will  work  on  the  policy  development,  legal  issues,  with  particular 
focus on procurement matters, financial management, contract management, audit and 
evaluation. 

28 

29 

AC=  Contract  Staff;  AL  =  Local  Staff;  END=  Seconded  National  Expert;  INT  =  agency  staff; 
JPD= Junior Professionals in Delegations.  
Sub-ceiling  for  external  staff  covered  by  operational  appropriations  of  the  Ukraine  Facility  (former 
‘BA’ lines). 

EN 

14 

  EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
3.2.4.  Compatibility with the current multiannual financial framework  

The proposal/initiative: 

–    can be fully financed through redeployment within the relevant heading of the 

Multiannual Financial Framework (MFF). 

Explain what reprogramming is required, specifying the budget lines concerned and the corresponding 
amounts. Please provide an excel table in the case of major reprogramming. 

–    requires use of the unallocated margin under the relevant heading of the MFF 

and/or use of the special instruments as defined in the MFF Regulation. 

Explain  what  is  required,  specifying  the  headings  and  budget  lines  concerned,  the  corresponding 
amounts, and the instruments proposed to be used. 

–    requires a revision of the MFF. 

This  new  legislative  proposal  for  the  Ukraine  Facility  is  accompanied  by  a  proposal  for  a  Council 
Regulation COM(2023) 337, amending Regulation 2020/2093 laying down the multiannual financial 
framework (MFF) for the  years 2021 to 2027. The amendment of that Regulation is necessary to  a) 
establish the Ukraine Reserve for 2024-2027 to provide financing to this Facility in support in forms 
other than loans as well as b) to provide a guarantee by the EU budget for the support in the form of 
loans. Both type of support are accounted for over and above the MFF expenditure ceilings. 

3.2.5.  Third-party contributions  

The proposal/initiative: 

–  does not provide for co-financing by third parties 

–    provides for the co-financing by third parties estimated below: 

Appropriations in EUR million (to three decimal places) 

3.3. 

Estimated impact on revenue  

–    The proposal/initiative has no financial impact on revenue. 

–  The proposal/initiative has the following financial impact: 

– 

– 

– 

 

 

on own resources  

on other revenue 

please indicate, if the revenue is assigned to expenditure lines  

Budget revenue line: 

Appropriations 
available for 
the current 
financial year 

Year 
N 

Year 
N+1 

Year 
N+2 

Article …………. 

p.m. 

p.m. 

p.m. 

Year 
N+3 

p.m. 

Enter as many years as necessary to show 
the duration of the impact (see point 1.6) 

p.m. 

p.m. 

p.m. 

EUR million (to three decimal places) 

Impact of the proposal/initiative30 

30 

As regards traditional own resources (customs duties, sugar levies), the amounts indicated must be net 
amounts, i.e. gross amounts after deduction of 20 % for collection costs. 

EN 

15 

  EN