Communication from the Commission on the methodology for handling the partial fulfilment of steps in the Ukraine Plan under the Ukraine Facility Regulation
Date: 2025-04-03
Institutions: Directorate-General for Enlargement and Eastern Neighbourhood, European Commission
Subjects: EU aid, EU loan, European integration, Ukraine, accession to the European Union, economic reconstruction, economic reform, investment, investment aid, macro-financial assistance








C_202502114EN.000101.fmx.xml












Official Journal of the European Union


EN
C series













C/2025/2114


3.4.2025







            COMMUNICATION FROM THE COMMISSION
         
on the methodology for handling the partial fulfilment of steps in the Ukraine Plan under the Ukraine Facility Regulation
(C/2025/2114)

Payment of financial support under the Ukraine Plan is conditional on the satisfactory fulfilment of the pre-defined qualitative and quantitative steps defined in the Annex to Decision 2024/1447 (1).
Regulation 2024/792 (2) stipulates that if one or more of these steps are not satisfactorily fulfilled, the Commission must inform the Council and the Parliament without undue delay and can suspend the non-repayable financial support and/or the loan support corresponding to such steps, thereby ensuring compliance with the principle of sound financial management (as laid down in Article 310(5) TFEU, Regulation 2024/2509 (3) and Article 6(8) of the Framework Agreement (4)).
Article 26(5) of Regulation 2024/792 requires the Commission to develop a methodology for handling the partial fulfilment of steps as guidance.
The methodology favours the continued implementation of the Plan, reflecting its performance-based nature and the combination of reforms and investments. It creates the conditions for a quick disbursement of funding and ensures that any suspension will be both proportional and predictable, while also protecting the financial interests of the Union.
Ukraine should continue to ensure its full commitment to deliver on the qualitative and quantitative steps in the Plan on time. A partial suspension of payments gives Ukraine additional time to tackle specific implementation issues while, in the meantime, benefitting from a partial payment linked to the steps that have been satisfactorily fulfilled.
If the respective step(s) is (are) fulfilled within 12 months of the initial suspension, the Commission will make a new assessment, following the procedure laid down in Article 26(4) of Regulation 2024/792. First, it will submit to the Council without undue delay a proposal for a Council implementing decision establishing the satisfactory fulfilment of the conditions for payment. Based on the decision adopted by the Council, the Commission will adopt a decision authorising the disbursement of due amount.
If the Commission considers that Ukraine has not taken the necessary measures within 12 months from the initial negative assessment, it will launch the procedure laid down in Article 26(6) of Regulation 2024/792. First, it will officially notify Ukraine that the period of 12 months has elapsed and that, based on the information available to the Commission, the necessary measures have not been taken. Ukraine then has two months from the communication of the Commission’s notification within which to present its observations.
If, following those observations, the Commission concludes that Ukraine has not taken the necessary measures, it will submit a proposal for a Council implementing decision reducing the amount of the non-repayable financial support and of the loan proportionately to the part corresponding to the relevant qualitative and quantitative steps. In line with Article 26(6) of Regulation 2024/792, the Council will act, as a rule, within one month of receiving the Commission’s proposal, while it may amend the Commission’s proposal and adopt the amended proposal by means of an implementing decision, acting by qualified majority.
If a step previously considered as having been satisfactorily fulfilled is reversed and no longer in line with the Annex to Decision 2024/1447, the Commission will apply the same methodology and suspend the corresponding amount from the payment in the next instalment, after the reversal has been confirmed. It follows from Article 26(3) of Regulation 2024/792 that the fulfilment of the precondition and the qualitative and quantitative steps can be considered satisfactory, provided that the measures related to the steps for which Ukraine has already achieved satisfactory fulfilment have not been reversed. If during the assessment of a subsequent instalment the Commission concludes that a step previously assessed as satisfactory fulfiled has been reversed, it will propose to the Council to suspend a corresponding amount from the next disbursements under the Plan and then follow the steps mentioned in the paragraphs above.
The methodology takes into account that not all steps contribute equally to the achievement of the Plan’s objectives. For example, the adoption of a strategy or an action plan cannot be awarded the same value as the entry into force of a law, in terms of their direct contribution to the achievement of the objectives of the Facility. Similarly, there is a different approach towards investment, to incentivise Ukraine to absorb all the funds available to it under the Facility. As such, the methodology distinguishes between three types of steps in the Plan, as follows:






1)



Primary reform steps – these are steps concerned with the entry into force and immediate application of Ukrainian laws that require the approval of the Ukrainian Parliament and ratification by the Office of the President. These steps have a coefficient of 2.










2)



Ordinary reform steps – this means all other reform steps that are different from the primary reform steps (e.g. adoption by the government of by-laws, resolutions, strategies, action plans, roadmaps, etc.; bringing IT systems online, etc.). These steps have a coefficient of 1.










3)



Investment steps – these are steps linked to investment. These steps have no coefficient allocated, as they use a different approach, as explained below.




The methodology consists of the following four phases:






1)



Calculating the average step value per instalment.




This will be done by dividing the total amount of the instalment (the sum of (i) the non-repayable financial support and (ii) the loan support) by the total number of steps (including both reforms and investment steps) in the respective instalment.






2)



Calculating the suspension value of step(s) not satisfactorily fulfilled.





To give due consideration to differences between steps, the Commission will apply coefficients to the primary and ordinary reform steps and a specific approach to investment steps as follows:






a.



Primary reform steps = average step value (calculated under point 1) multiplied by a coefficient of 2.










b.



Ordinary reform steps = average step value (calculated under point 1) multiplied by a coefficient of 1.










c.



Investment steps = difference between the amount specified in the description of the investment step (in the Annex to Council Decision 2024/1447) and the actual committed appropriations in the Ukrainian state budgets of the previous years since 14 May 2024. The Plan differentiates between three types of investment steps:






i)



final (covering investment committed in 2024-2027),










ii)



interim (covering investment committed in 2025-2026),










iii)



special (reflecting the steps under the ‘Decentralisation and regional policy’ chapter, reflecting the obligation under Article 16(4) of Regulation 2024/792 to allocate at least 20 % of the non-repayable support to the needs of sub-national authorities).








To avoid double-counting, suspension from the final investment steps and from the special investment steps mentioned above is not cumulative.
Similarly, any suspension on a final investment step will be adjusted for any previous suspension applied to the related interim investment step (if Ukraine has not taken the necessary measures to lift this suspension within a period of 12 months).






3)



Assigning the source of funding to each individual step in the quarterly instalment. Annex to Decision 2024/1447 does not assign a source of funding to the individual steps. Such assignment is specified in the relevant Council implementing decisions for each quarterly assessment.
This practice has already been applied to the Council implementing decisions linked to the first two instalments of the Plan (5). In each quarterly instalment, the Commission proposes to allocate certain steps to the non-repayable financial support and the rest of the steps to the loan support.
The proposed allocation remains to be determined at the discretion of the Commission in accordance with the principle of proportionality, which will act considering the best interests towards achieving the Ukraine Facility’s objectives.
When proposing the allocation, as a general rule, the Commission will first assign steps that are considered not to have been satisfactorily fulfilled to the non-repayable financial support.










4)



Calculating the revised amount to be disbursed. The suspended amount will be subtracted from the financial support available, based on the assignment of the source of funding, as proposed under point 3) above.
When the suspension value is higher than the non-repayable financial support made available in the quarterly instalment in question, the difference will be suspended from the loan support.
The suspended amount cannot be higher than the total amount of financing allocated to the respective instalment, namely the sum of the non-repayable and loan support.
When the loan support is impacted, the calculation of the revised amount to be disbursed will take into account the clearing of pre-financing.




The Commission can review and amend this methodology as it gathers more experience with its application.


(1)  Council Implementing Decision (EU) 2024/1447 of 14 May 2024 on the approval of the assessment of the Ukraine Plan (OJ L, 2024/1447, 24.5.2024, ELI: http://data.europa.eu/eli/dec_impl/2024/1447/oj).

(2)  Regulation (EU) 2024/792 of the European Parliament and of the Council of 29 February 2024 establishing the Ukraine Facility (OJ L, 2024/792, 29.2.2024, ELI: http://data.europa.eu/eli/reg/2024/792/oj).

(3)  Regulation (EU, Euratom) 2024/2509 of the European Parliament and of the Council of 23 September 2024 on the financial rules applicable to the general budget of the Union (OJ L, 2024/2509, 26.9.2024, ELI: http://data.europa.eu/eli/reg/2024/2509/oj).

(4)  Framework Agreement between the European Union and Ukraine on specific arrangements for implementation of Union funding under the Ukraine Facility of 22 May 2024.

(5)  Council Implementing Decision (EU) 2024/2149 of 6 August 2024 on establishing the satisfactory fulfilment of the conditions for the payment of the first instalment of the non-repayable financial support and of the loan support under the Ukraine Plan of the Ukraine Facility (OJ L, 2024/2149, 8.8.2024, ELI: http://data.europa.eu/eli/dec_impl/2024/2149/oj).
Council Implementing Decision (EU) 2024/3220 of 9 December 2024 on establishing the satisfactory fulfilment of the conditions for the payment of the second instalment of the non-repayable financial support and of the loan support under the Ukraine Plan of the Ukraine Facility (OJ L, 2024/3220, 30.12.2024, ELI: http://data.europa.eu/eli/dec_impl/2024/3220/oj).


ELI: http://data.europa.eu/eli/C/2025/2114/oj
ISSN 1977-091X (electronic edition)