Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL implementing enhanced cooperation on the establishment of the Ukraine Support Loan for 2026 and 2027
Date: 2026-01-14
Institutions: European Commission, Secretariat-General
Subjects: EU aid, EU loan, Russo-Ukrainian issue, Ukraine, defence industry, economic aid, enhanced cooperation, financial aid, macro-financial assistance

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   EUROPEAN COMMISSION  Brussels, 14.1.2026  COM(2026) 20 final 2026/0008 (COD)  Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL implementing enhanced cooperation on the establishment of the Ukraine Support Loan for 2026 and 2027  
 
EXPLANATORY MEMORANDUM  

1. 

• 

CONTEXT OF THE PROPOSAL  

Reasons for and objectives of the proposal  

independence,  sovereignty  and 

The  EU  is  steadfast  in  its  support  to  Ukraine,  whose  future  lies  within  the  EU.  The  EU 
supports  Ukraine’s 
its 
internationally recognised borders and is unwavering in its commitment to provide political, 
financial, economic, humanitarian, military and diplomatic support1. In light of the escalating 
Russian aggression, it is necessary to act swiftly to ensure Ukraine has access to the resources 
it urgently needs. This proposal is designed to ensure the establishment of a new instrument to 
address those urgent needs, by providing Union assistance to Ukraine in the form of a loan to 
be repaid by reparations due by Russia. 

integrity  within 

territorial 

The large-scale invasion by Russia of Ukraine, which began on 24 February 2022, has had a 
profoundly damaging impact on the country and its citizens. Despite diplomatic efforts by the 
US  and  Europe  to  achieve  a  peaceful  resolution,  and  Ukraine’s  readiness  to  engage  in 
dialogue to end the war, Russia has intensified its attacks on Ukraine, deliberately targeting 
civilians and critical infrastructures. This escalation has further exacerbated the humanitarian 
crisis, caused immense suffering for the Ukrainian people and raised the colossal human and 
financial cost of this unprovoked and unjustified military aggression. Russia’s illegal war of 
aggression is  a blatant violation of the territorial integrity, sovereignty and independence of 
Ukraine, as well as a violation of the prohibition on the use of force enshrined in Article 2(4) 
of the United Nations (UN) Charter, which is a peremptory rule of international law, and of 
the other principles of the UN Charter. The unwavering determination and courage shown by 
Ukrainians  in  defending  their  homeland  is  a  testament  to  their  strength  and  warrants  deep 
admiration and appreciation.  

However,  Russia’s  intensified  aggression  has  increased  Ukraine’s  financing  needs  and  calls 
for urgent investment in the Ukrainian Defence Technological and Industrial Base. It is now 
clear that additional sources of funding both from the EU and the international community are 
necessary. Ukraine’s financing needs for 2026 and 2027 are set to surpass existing projections 
by  the  International  Monetary  Fund  (IMF),  whose  eighth  review  of  the  IMF  Programme 
underlines that risks and uncertainty remain exceptionally high, with the existing programme 
having limited scope to absorb any new shocks, including from a more prolonged and intense 
war.  On  9  September  2025,  Ukraine  has  submitted  an  official  request  for  a  new  IMF 
programme  to  cover  additional  financing  needs  from  2026  to  2029.  The  IMF’s  ability  to 
proceed  with  this  programme  is  contingent  upon  receiving  sufficient  financing  assurances 
from partners, including the Union. 

Ukraine’s recently  presented draft budget  for 2026, developed in  cooperation with  the IMF, 
projects defence and security expenditure of EUR 56 billion, supported by EUR 51.6 billion 
of in-kind military assistance. Given the negative impact of the war on Ukraine’s economy, 
that  budget  projects  that,  in  addition  to  the  necessary  in-kind  assistance,  EUR  43  billion  of 
international  aid  is  needed.  As  of  January  2026,  only  EUR  25  billion  has  been  firmly 
committed.  Ukraine  has  limited  room  for  additional  fiscal  adjustments,  as  further  spending 
cuts  or  tax  increases  could  further  harm  the  economy,  which  is  already  vulnerable  due  to 
damage  to  key  infrastructure,  labour  shortages,  and  the  ongoing  displacement  and 
mobilisation  of  people. Swift  financial  assistance  is  vital  to  help  Ukraine  maintain  essential 

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European Council Conclusions, 27 June 2024; EUCO 15/24. 

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state  functions,  ensure  macroeconomic  stability,  rehabilitate  critical  energy  infrastructures, 
and  invest  into  its  Defence  Technological  and  Industrial  Base.  These  needs  come  on  top  of 
significant requirements for medium-term recovery and reconstruction. 

In their summit statement of 8 December 2025, G7 Finance Ministers agreed to  continue to 
work  together  to  develop  a  wide  range  of  financing  options  to  support  Ukraine,  including 
potentially  using  the  full  value  of  Russian  assets  immobilised  in  G7  jurisdictions  until 
reparations  are  paid  for  by  Russia,  to  end  the  war  and  ensure  a  just  and  lasting  peace  in 
Ukraine, consistent with G7 legal frameworks.  

In  its  conclusions  of  27  June  2024,  17  October  2024,  19  December  2024  and  23  October 
2025,  the  European  Council  has  stated  that,  subject  to  Union  law,  Russia’s  assets  should 
remain  immobilised  until  Russia  ceases  its  war  of  aggression  against  Ukraine  and 
compensates  it  for  the  damage  caused  by  this  war.  Additionally,  Council  Regulation  (EU) 
2025/26002  temporarily  prohibits  the  transfer  of  assets  or  reserves  of  the  Central  Bank  of 
Russia until Russia ceases its war of aggression against Ukraine, Russia provides reparations 
to  Ukraine  to  the  extent  necessary  to  allow  for  reconstruction  without  adverse  economic  or 
financial  consequences  for  the  Union,  and  Russia’s  actions  in  the  context  of  its  war  of 
aggression against Ukraine have objectively ceased to pose a serious risk of severe difficulties 
to the economy of the Union and its Member States.  

In that context, on 18 December 2025, the European Council has agreed to provide a loan to 
Ukraine  of  EUR  90  billion  for  the  years  2026-2027  based  on  EU  borrowing  on  the  capital 
markets  backed  by  the  EU  budget  headroom.  The  European  Council  also  agreed  that  by 
means of enhanced cooperation (Article 20 TEU) in respect of the instrument based on Article 
212 TFEU, any mobilisation of resources of the Union’s budget as a guarantee for this loan 
will  not  have  an  impact  on  the  financial  obligations  of  the  Czech  Republic,  Hungary  and 
Slovakia. On the same date, 25 Member States have agreed that this loan would be repaid by 
Ukraine only  once reparations are received and that  until  then,  Russian Central  Bank  assets 
will  remain  immobilised  and  the  Union  reserves  its  right  to  make  use  of  them  to  repay  the 
loan, in full accordance with EU and international law. Those Member States underlined the 
importance of the following elements in relation to the loan: (a) strengthening of the European 
and Ukrainian defence industries; (b) Ukraine continuing to uphold the rule of law, including 
the fight against corruption; and (c) the specific character of the security and defence policy of 
certain Member States and the security and defence interests of all Member States. 

Against this background, it is proposed to establish a new support instrument for Ukraine of 
up  to  EUR  90  billion,  which  Ukraine  would  only  repay  once  it  receives  reparations  from 
Russia (the ‘Ukraine Support Loan’). Following requests from the Kingdom of Belgium, the 
Republic  of  Bulgaria,  the  Kingdom  of  Denmark,  the  Federal  Republic  of  Germany,  the 
Republic  of  Estonia,  the  Republic  of  Croatia,  Ireland,  the  Hellenic  Republic,  the  French 
Republic,  the  Republic  of  Cyprus,  the  Republic  of  Latvia,  the  Republic  of  Lithuania,  the 
Grand  Duchy  of  Luxembourg,  the  Republic  of  Malta,  the  Kingdom  of  the  Netherlands,  the 
Republic of Austria, the Republic of Poland, the Portuguese Republic, Romania, the Republic 
of  Slovenia,  the  Republic  of  Finland,  the  Kingdom  of  Spain,  the  Republic  of  Italy,  the 
Kingdom  of  Sweden,  an  accompanying  proposal  from  the  Commission  proposes  that 
enhanced cooperation be authorised for this loan. 

A Ukraine Support Loan 

2 

Council  Regulation  (EU)  2025/2600  of  12  December  2025  on  emergency  measures  addressing  the 
serious economic difficulties caused by Russia’s actions in the context of the war of aggression against 
Ukraine (OJ L, 2025/2600, 13.12.2025, ELI: http://data.europa.eu/eli/reg/2025/2600/oj). 

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Despite the massive needs of Ukraine, the ability for the Ukrainian state to take on more debt 
is severely limited. Ukraine’s debt to GDP has drastically expanded since the start of the war, 
jumping from less than 50% of GDP at end 2021 to 85% of GDP in 2025 (more than 100% of 
GDP  including  ERA  loans).  Given  the  significant  destruction  that  the  war  has  had  on 
productivity  and  the  on-going  drag  that  the  war  has  on  growth  dynamics,  the  significant 
financing needs of Ukraine are not possible to be addressed by Ukraine taking on further debt.  

At  the  same  time,  Member  State’s  finances  are  still  recovering  from  a  succession  of  crises 
during  the  last  decade,  including  the  significant  expenses  generated  by  Russia’s  war  in 
Ukraine  and  Russia’s  hybrid  campaign  against  the  Union.  The  mobilisation  of  additional 
significant  resources  by  Member  States  to  be  able  to  finance  Ukraine  would  constitute  an 
important economic challenge. 

In this context of difficult debt dynamics of Ukraine due to the on-going Russian aggression 
and the challenges associated with Member States finances, including as of Russia’s actions, 
it  is  appropriate  to  develop  an  innovative  solution  that  is  not  expected  to  place  a  financial 
burden on either Ukraine or Member States. 

In line with the International Law Commission’s Draft Articles on the Responsibility of States 
for Internationally Wrongful Acts (ARSIWA)3 and customary international law, Russia  – as 
the responsible state – is under an obligation to make full reparation for the injury caused by 
its war of aggression against Ukraine. In particular, Articles 30 – 32 of ARSIWA provide that 
“The  State  responsible  for  the  internationally  wrongful  act  is  under  an  obligation:  (a)  to 
cease that act, if it is continuing; [...]; “The responsible State is under an obligation to make 
full  reparation  for  the  injury  caused  by  the  internationally  wrongful  act.”  “Injury  includes 
any  damage,  whether  material  or  moral,  caused  by  the  internationally  wrongful  act  of  a 
State.” 

In the context of this legal obligation on Russia to make reparations for the damage that it has 
caused  through  its  illegal  war  of  aggression,  it  is  appropriate  for  the  Union  to  provide  the 
Ukraine  Support  Loan  as  a  limited  recourse  loan  that  will  become  due  and  payable  when 
Ukraine receives from Russia cash or non-monetary assets as war reparations, indemnities or 
any financial settlement from Russia, other than territory. 

Use of funds 

Given Ukraine’s financing needs and the considerable uncertainty on the future of the war, it 
is critical that the Ukraine Support Loan is designed in a flexible manner that is reactive to the 
situation.  There  should  be  flexibility  to  use  the  money  towards  the  most  pressing  financing 
needs,  whether  driven  by  the  current  war  situation  or  also  to  support  reconstruction  should 
peace prevail. 

This  proposal  provides  for  a  Ukraine  Support  Loan  that  will  be  delivered  in  a  predictable, 
continuous,  orderly,  flexible  and  timely  manner  with  a  view  to  supporting  Ukraine  in 
covering its financing and defence needs in 2026 and 2027, in particular those resulting from 
Russia’s  war  of  aggression.  Specifically,  the  Ukraine  Support  Loan  should  support  macro-
financial  stability  in  Ukraine  and  ease  its  external  financing  constraints,  whether  driven  by 
war  or  by  reconstruction,  and  support  Ukraine’s  defence  industrial  capacities  through 
economic, financial and technical cooperation.  

3 

Articles  on  Responsibility  of  States  for  Internationally  Wrongful  Acts,  2001,  International  Law 
Commission. 

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To support macro-financial stability in Ukraine and ease its external financing constraints, the 
proposal creates multiple options via which the funds can be channelled to support Ukraine, 
where support would be able to be provided through macro-financial assistance and through 
the  Ukraine  Facility.  Under  both  instruments,  disbursements  will  be  linked  to  preconditions 
and policy conditions. For macro-financial assistance, those conditions would be set out in a 
memorandum  of  understanding  (MoU)  between  the  Commission  and  Ukraine  including 
conditions to strengthen revenue mobilisation, tackle root causes of corruption, improving the 
sustainability and quality of public expenditure and enhance the efficiency, transparency and 
accountability  of  the  public  finance  management  systems.  For  the  Ukraine  Facility,  the 
Ukraine  Plan  should  be  updated  to  reflect  these  additional  amounts,  including  measures  to 
strengthen the rule of law and the fight against corruption. 

To support Ukraine’s defence industrial capacities through economic, financial and technical 
cooperation,  the  proposal  provides  for  assistance  that  aims  at  enabling  Ukraine  to  carry  out 
urgent  and  major  public  investments  in  support  of  the  Ukrainian  defence  industry  and  its 
integration into the European defence industry in response to and following the current crisis 
situation. In order to  urgently reinforce the  Ukrainian defence  industrial  base in  an efficient 
and autonomous manner, eligibility criteria should be structured in a manner that directs the 
activities,  expenditures  and  measures  to  support  Ukraine’s  defence  industrial  capacities 
towards 
the  Ukrainian  Defence 
Technological and Industrial Base, taking into account its gradual future integration into the 
European Defence Technological and Industrial Base. Furthermore, in order to allow Ukraine 
to  use  the  financial  and  economic  assistance  in  the  way  that  is  the  most  adapted  to  the 
circumstances, it is appropriate to allow it to employ the funds to support Ukraine’s defence 
industrial  capacities  by  different  implementation  methods  that  reflect  the  diversity  of  the 
needs. 

the  reconstruction,  recovery  and  modernisation  of 

The  financial  and  economic  assistance  available  under  the  Ukraine  Support  Loan  will  be 
made accessible to Ukraine in line with its financing needs. To that end, Ukraine will submit a 
Ukrainian Financing Strategy on Ukraine’s financing needs and sources. Upon assessment of 
the  Commission,  the  Council  would  approve  that  assessment  and  determine  the  amount  of 
assistance to be made accessible to Ukraine to assist in the implementation of the Ukrainian 
Financing Strategy. 

• 

Consistency with existing policy provisions in the policy area 

The support under the  Ukraine Support Loan will  be consistent  with and  complementary to 
the  support  provided  through  Regulation  (EU)  2024/7924,  Regulation  (EU)  2021/9475, 
Regulation  (EC)  No  1257/966,  Regulation  (EC)  No  2024/27737  and  Regulation  (EU) 

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L, 

the 

(OJ 

Facility 

Ukraine 

2024/792, 

29.2.2024, 

Regulation  (EU)  2024/792  of  the  European  Parliament  and  of  the  Council  of  29  February  2024 
establishing 
ELI: 
http://data.europa.eu/eli/reg/2024/792/oj).   
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) (OJ  L 209,  14.6.2021, p.  1,  ELI: 
http://data.europa.eu/eli/reg/2021/947/2021-06-14). 
Council  Regulation  (EC)  No  1257/96  of  20  June  1996  concerning  humanitarian  aid  (OJ  L  163, 
2.7.1996, p. 1, ELI: http://data.europa.eu/eli/reg/1996/1257/2019-07-26). 
Regulation  (EU)  2024/2773  of  the  European  Parliament  and  of  the  Council  of  24  October  2024 
establishing  the  Ukraine  Loan  Cooperation  Mechanism  and  providing  exceptional  macro-financial 
assistance to Ukraine (OJ L, 2024/2773, 28.10.2024, ELI: http://data.europa.eu/eli/reg/2024/2773/oj). 

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2025/11068, and is in line with the respective objectives, intervention logic and rules of these 
instruments. 

In  particular,  the  Ukraine  Support  Loan  comes  in  addition  and  is  complementary  to  the 
support  provided  by  the  EU  under  the  G7  ERA  Loans  initiative  and  the  Ukraine  Facility. 
Specific attention is paid to the consistency and mutual reinforcement of the Ukraine Support 
Loan and the implementation  of defence policies, provided under the SAFE Regulation  and 
the proposed EDIP Regulation. 

• 

Consistency with other Union Policies 

The  support  under  the  Ukraine  Support  Loan  initiative  is  consistent  with  the  application  of 
restrictive  measures  (sanctions)  against  Russia  and  complementary  to  the  European  Peace 
Facility. 

Furthermore, the candidate status granted by the European Council on 23 June 2022 and the 
decision of the 14-15 December 2023 European Council to open accession negotiations with 
Ukraine anchors Ukraine firmly on its European path. For this reason, the whole EU response 
in  support  of  Ukraine’s  resilience  and  recovery  –  including  through  the  Ukraine  Support 
Loan, which will in turn be consistent with and supporting the implementation of the Ukraine 
Facility – will also contribute to the early phase of Ukraine’s pre-accession process. 

2. 

• 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

Article 212 TFEU is an appropriate legal basis for financial assistance programmes granted by 
the Union for third countries, which are not developing countries. 

• 

Subsidiarity (for non-exclusive competence) 

The  subsidiarity  principle  is  respected  as  the  need  for  a  common  response  in  providing 
support to  Ukraine on adequate scale cannot  be  sufficiently achieved by the Member States 
alone  and,  by  reasons  of  its  scale  and  effect,  can  be  better  achieved  by  the  EU.  The  main 
reasons  are  the  fiscal  capacity  and  budgetary  constraints  faced  at  the  national  level  and  the 
need  for  strong  donor  coordination  in  order  to  maximise  the  scale  and  effectiveness  of  the 
support,  while  limiting  the  burden  on  the  administrative  capacity  of  Ukrainian  authorities, 
which is very stretched in the current circumstances. The EU is in a unique position to deliver 
external  assistance  to  Ukraine  to  provide  support  in  covering  urgent  budgetary  needs  in  a 
predictable,  continuous,  orderly  and  timely  manner,  including  those  linked  to  supporting 
Ukraine’s defence industrial capacities. 

• 

Proportionality 

The  continued  unprovoked  and  unjustified  military  aggression  by  Russia  requires  granting 
additional financial assistance to Ukraine in line with the objectives and modalities described 
under this proposal. 

The proposed financial support to Ukraine is considered adequate in size for 2026 and 2027, 
based on the elevated funding needs and best estimates of Ukraine’s defence needs submitted 
by  the  national  authorities,  while  taking  into  account  the  high  uncertainty  of  the  war 

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Council  Regulation  (EU)  2025/1106  of  27  May  2025  establishing  the  Security  Action  for  Europe 
(SAFE)  through  the  Reinforcement  of  the  European  Defence  Industry  Instrument  (OJ  L,  2025/1106, 
28.5.2025, ELI: http://data.europa.eu/eli/reg/2025/1106/oj). 

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circumstances. Such support does not go beyond what is necessary for the sought purpose to 
provide structured support to Ukraine and its related financing. 

The  proposal  is  proportionate  to  the  scale  and  gravity  of  the  deficiencies  that  have  been 
identified, including the need to provide budget support to Ukraine, and the need to carry out 
urgent and major public investments in support of the Ukrainian Defence  Technological and 
Industrial  Base  and  its  integration  into  the  European  Defence  Technological  and  Industrial 
Base. The proposal respects the limits of possible Union intervention under the Treaties. 

• 

Choice of the instrument 

A Regulation of the European Parliament and of the Council is the appropriate instrument as 
it provides directly applicable rules for the implementation of the Ukraine Support Loan.  

3. 

• 

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EX-POST 

EVALUATIONS, 

OF 

STAKEHOLDER 

Ex-post evaluations/fitness checks of existing legislation 

The  proposal  follows  a  series  of  macro-financial  assistance  operations  provided  to  Ukraine 
since  2015.  Past  ex-post  evaluations  of  previous  macro-financial  assistance  operations  to 
Ukraine  have  shown  that  in  general  they  were  highly  relevant  in  terms  of  their  objectives, 
financial envelope and policy conditions. In particular, macro-financial assistance operations 
proved  crucial  to  support  Ukraine  in  addressing  its  balance-of-payment  problems  and 
implementing key structural reforms to stabilise the economy and enhance the sustainability 
of its external position. They allowed for fiscal savings and financial benefits and acted as a 
catalyst for additional financial support and investor confidence. The conditionality attached 
to  the  macro-financial  assistance  operations  was  found  complementary  to  the  related  IMF 
programmes. It created a politically reinforcing effect that contributed to the mobilisation of 
the  Ukrainian  authorities  around  essential  reforms,  especially  in  structural  policy  areas  that 
are less covered by other international donor programmes. 

• 

Stakeholder consultations 

The proposal follows up on the European Council conclusions of 18 December  2025 where 
the  European  Council  agreed  to  provide  a  loan  to  Ukraine  of  EUR  90  billion  for  the  years 
2026-2027  based  on  EU  borrowing  on  the  capital  markets  backed  by  the  EU  budget 
headroom. In the preparation of this proposal, the Commission services have consulted with 
international  financial  institutions  and  other  bilateral  (including  Member  States  and  G7 
members)  and  multilateral  donors.  The  Commission  is  also  in  regular  contact  with  the 
Ukrainian authorities. 

Due  to  the  urgency  of  preparing  the  proposal  for  timely  adoption  by  the  co-legislators  and 
ensuring its operational status by early 2026, a formal stakeholder consultation could not be 
conducted. This approach aims to address the emerging and escalating defence and budgetary 
demands resulting from Russia’s war of aggression. These needs encompass efforts related to 
recovery  and  reconstruction.  The  European  Union  will  ensure  adequate  communication  and 
visibility  regarding  the  objectives  and  actions  implemented  under  the  scope  of  the  Ukraine 
Support Loan, both within Ukraine, across the Union, and internationally. 

• 

Collection and use of expertise 

The proposal builds on decades long experience with macro-financial assistance as well as on 
experience  with  the  Union’s  external  action  support,  including  the  Ukraine  Facility  since 
2024.  

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The  Commission  based  this  proposal  on  a  careful  analysis,  also  building  on  inputs  from 
international  financial  institutions  and  other  competent  international  institutions,  of  the 
defence needs and broader macro-economic situation of Ukraine. This includes discussions on 
a regular basis of the latest projections of Ukraine’s funding needs within international fora, 
such  as  the  G7  and  the  IMF,  as  well  as  continuous  direct  contact  with  the  Ukrainian 
authorities. 

• 

Impact assessment 

Due to the urgent nature of the proposal, which is designed to provide urgent assistance to a 
country at war, no impact assessment could be carried out. The ex-ante assessment of needs 
proposed to be covered by the Ukraine Support Loan inter alia draw upon recent data from 
the IMF and Ukrainian authorities. The support under the Ukraine Support Loan should build 
upon the lessons learned and achievements of recent support initiatives, such as the G7 ERA 
Loans initiative. 

• 

Regulatory fitness and simplification 

The proposal is not linked to regulatory fitness and simplification. 

• 

Fundamental rights 

A precondition for granting support under the Ukraine Support Loan is that Ukraine continues 
to uphold and respect effective democratic mechanisms and its institutions, including a multi-
party  parliamentary  system,  and  the  rule  of  law,  and  to  guarantee  respect  for  human  rights, 
including those of persons belonging to minorities. Upholding and respecting the rule of law 
should include the fight against corruption. 

The reform-commitment and political will by the Ukrainian authorities is a positive sign, in 
particular as evidenced by the European Council granting candidate status to Ukraine in June 
2022  and  the  European  Council  decision  of  December  2023  to  open  accession  negotiations 
with  Ukraine,  by  the  renewed  successful  completion  of  the  structural  policy  conditionality 
attached  to  the  recent  macro-financial  assistance  operations  to  Ukraine  and  the  continuing 
implementation of the Ukraine Plan. On 14 May 2025, Ukraine adopted roadmaps on (among 
others)  the  rule  of  law,  public  administration  reform  and  on  the  functioning  of  democratic 
institutions.  Bilateral  screening  meetings  were  completed  in  September  2025.  Since  the 
Russian aggression, the Ukrainian authorities have shown an impressive degree of resilience 
and have remained committed to pursue these reforms in a transparent manner and working 
towards EU standards and in line with the country’s path towards EU integration. 

In  view  of  this,  the  precondition  for  the  Ukraine  Support  Loan  is  considered  to  be  met  at 
present.  Concurrently, the continuous adherence to this precondition  will be further ensured 
by specific conditions relating to the Commission’s assessment of future Ukrainian Financing 
Strategies  and  before  disbursements.  A  similar  precondition  for  support  is  applicable  to  the 
implementation of the Ukraine Plan. 

4. 

BUDGETARY IMPLICATIONS 

The Ukraine Support Loan will take the form of a limited recourse loan to Ukraine of up to 
EUR  90  billion  to  be  repaid  by  reparations  due  by  Russia.  The  loan  will  be  based  on  EU 
borrowing on the capital markets backed by the EU budget headroom. The Union budget will 
also cover the debt service costs (cost of funding and costs of issuing and managing liquidity) 
related  to  the  borrowing  as  well  the  associated  administrative  costs.  To  cater  for  these 

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elements,  the  Regulation  on  the  multiannual  financial  framework  for  2021-2027  will  be 
revised.  

The debt service costs will be financed by a new special instrument over and above the MFF 
expenditure  ceilings,  the  Ukraine  Loan  Instrument,  which  may  be  mobilised  solely  for  this 
purpose.  When  mobilising  the  Ukraine  Loan  Instrument  in  the  framework  of  the  budgetary 
procedure, budgetary availabilities in other special instruments, applicable sectoral rules, any 
legal or other obligations including under the EURI Instrument, priorities, prudent budgeting 
and sound financial management will be considered. 

This loan will be financed under enhanced cooperation, which in accordance with Article 332 
of  the  Treaty  on  the  Functioning  of  the  European  Union  implies  that  the  resulting 
expenditures, other than administrative costs entailed for the institutions, shall be borne by the 
participating Member States. 

A new budget line will be created to clearly and transparently identify the expenditure related 
to  the  debt  service  costs  resulting  from  the  enhanced  cooperation.  The  methodology  to 
calculate  the  contributions  of  participating  Member  States  is  defined  in  Article  11  of  the 
Making Available Regulation (Regulation EU, Euratom No 609/2014). Similarly, should the 
EU  budget  guarantee  be  called,  the  amounts  will  be  mobilised  over  and  above  the  MFF 
expenditure  ceilings  and  the  financial  contributions  will  be  borne  by  participating  Member 
States, calculated with the same methodology. 

Details  on  the  budgetary  implications  are  provided  in  the  Legislative  Financial  Statement 
attached to this proposal. 

5. 

• 

OTHER ELEMENTS 

Implementation plans and monitoring, evaluation and reporting arrangements 

The  Ukraine  Support  Loan  will  be  for  a  maximum  amount  of  EUR  90  billion,  to  be  made 
available in accordance with Ukraine’s financing needs per the provisions of this proposal. 

Specifically, for the purposes of implementing the Ukraine Support Loan Regulation, Ukraine 
is to submit to the European Commission a Ukrainian Financing Strategy providing details on 
Ukraine’s financing needs and financing sources in principle for the forthcoming 12 months. 
The  Commission  is  to  assess  the  Ukrainian  Financing  Strategy  and,  in  case  of  a  positive 
assessment, submit a proposal to the Council for the approval of its assessment by means of 
an implementing decision. The Commission’s proposal will outline the amount of assistance 
to  be  made  available  to  Ukraine  to  assist  in  the  implementation  of  the  Ukrainian  Financing 
Strategy,  including  the  amount  of  that  assistance  accessible  for  (i)  assistance  through  the 
Ukraine  Facility,  (ii)  macro-financial  assistance  and  (iii)  assistance  to  support  Ukraine’s 
defence industrial capacities.  

To receive financial and economic assistance under the Ukraine Support Loan, Ukraine will 
submit  to  the  Commission  a  duly  justified  request  for  funds,  which  may  be  submitted  by 
Ukraine to the Commission, in principle, six times a year. 

Furthermore,  the  Commission  will  submit  to  the  European  Parliament  and  to  the  Council  a 
report on the implementation of the Ukraine Support Loan Regulation in the preceding year, 
which will include an evaluation of that implementation. Additionally, by  30 June 2029, the 
Commission will submit to the European Parliament and to the Council an evaluation report, 
assessing the results and efficiency of the Ukraine Support Loan provided under the Ukraine 
Support  Loan  Regulation  and  the  extent  to  which  it  has  contributed  to  the  aims  of  the 
assistance. 

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Finally,  in  order  to  enhance  the  dialogue  between  the  Union  institutions,  in  particular  the 
European  Parliament,  the  Council  and  the  Commission,  and  to  ensure  greater  transparency 
and  accountability,  the  competent  committee  of  the  European  Parliament  may  invite  the 
Commission to discuss the implementation of this Regulation. 

• 

Detailed explanation of the specific provisions of the proposal 

Chapter I of the Regulation concerns its general provisions. 

Article  1  provides  the  subject  matter  of  the  Regulation,  which  is  the  establishment  of  the 
Ukraine Support Loan. 

Article 2 defines the general and specific objectives of the Ukraine Support Loan, which are 
to provide financial and economic assistance to Ukraine in a predictable, continuous manner, 
through supporting Ukraine’s macro-financial stability and defence industrial capacities. 

Article 3 provides the definitions applicable under the Regulation. 

Article 4 sets the available assistance under the Ukraine Support Loan. 

Article 5 prescribes the preconditions for assistance under the Ukraine Support Loan. 

Chapter II of the Regulation concerns the implementation of the Ukraine Support Loan. 

Article  6  stipulates  that  Ukraine  shall  submit  to  the  Commission  the  Ukrainian  Financing 
Strategy,  providing  details  on  its  contents,  with  specific  reference  to  Ukraine’s  needs  and 
financing resources for the next 12 months. 

Article 7 provides for the assessment by the Commission of the Ukrainian Financing Strategy, 
defining the necessary criteria to be observed. 

Article  8  provides  for  a  Council  implementing  decision  making  the  financial  and  economic 
assistance accessible. 

Article  9  provides  for  the  close  cooperation  between  the  Commission,  Ukraine,  Member 
States, relevant international bodies and donors to Ukraine to ensure a coherent and consistent 
approach to address Ukraine’s financial and economic assistance needs. 

Chapter III of the Regulation concerns the Macro-Financial Assistance. 

Article  10  provides  for  the  purpose  of  macro-financial  assistance,  notably  to  contribute  to 
covering  Ukraine’s  financing  gap  as  identified  in  a  positively  assessed  Ukrainian  Financing 
Strategy. 

Article 11 sets out that the Commission shall agree with Ukraine on the policy conditions to 
which  the  support  is  to  be  linked,  which  shall  be  described  in  a  memorandum  of 
understanding. 

Chapter  IV  of  the  Regulation  concerns  assistance  to  support  Ukraine’s  Defence  Industrial 
Capacities. 

Article 12 provides for the purpose of the assistance to support Ukraine’s defence industrial 
capacities,  notably  to  carry  out  urgent  and  major  public  investments  in  support  of  the 
Ukrainian defence industry and its integration into the European defence industry.  

Article  13  defines  the  eligibility  conditions  for  the  activities,  expenditures  and  measures  to 
support Ukraine’s defence industrial capacities.  

Article 14 requires  Ukraine to  produce a schedule for each  activity, expenditure or measure 
related  to  a  defence  product  or  other  product  for  defence  purposes  for  which  it  intends  to 
request assistance.  

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Article 15 prescribes the establishment of the Ukraine’s Defence Industrial Capacities Expert 
Group.  

Article  16  provides  for  the  opening  of  a  special  account  for  the  sole  purpose  of  the 
management  of  the  financial  and  economic  assistance  received  by  Ukraine  to  support  its 
defence industrial capacities.  

Article  17  sets  out  the  monitoring  requirements  for  the  assistance  provided  to  support 
Ukraine’s defence industrial capacities.  

Article 18 defines the conditions for the modification of an existing framework agreement or 
contract for defence products.  

Article  19  allows  for  Member  States,  for  the  sole  purpose  of  the  Regulation,  to  request  an 
economic operator on its territory, to prioritise certain order of defence products.  

Chapter  V  of  the  Regulation  concerns  the  financing  and  implementation  of  the  Ukraine 
Support Loan.  

Article 20 stipulates that the detailed financial terms of the Ukraine Support Loan shall be laid 
down in the Ukraine Support Loan Agreement and sets out certain mandatory requirements.  

Article 21 sets out that in order for Ukraine to receive financial and economic assistance, it 
shall submit to the Commission a duly justified request for funds.  

Article 22 provides for a borrowing cost subsidy for the Ukraine Support Loan. 

Article 23 prescribes the requirements on the Commission for making a decision to release an 
instalment under the Ukraine Support Loan.  

Article 24 empowers the Commission to borrow the necessary funds, on behalf of the Union, 
to finance the Ukraine Support Loan.  

Article 25 lays out the rules on classified information and sensitive information.  

Chapter VI concerns final provisions.  

Article 26 empowers the Commission to adopt delegated acts, subject to conditions.  

Article 27 regulates the governance through committee procedures.   

Article  28  provides  for  a  Ukraine  Support  Loan  dialogue,  which  foresees  to  enhance 
communication  between  the  Union  institutions,  in  particular  the  European  Parliament,  the 
Council and the Commission.  

Article  29  prescribes  the  provision  of  information  to  the  European  Parliament  and  to  the 
Council.  

Article 30 regulates the entry into force.  

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2026/0008 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

implementing enhanced cooperation on the establishment of the Ukraine Support Loan 
for 2026 and 2027 

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 TFEU thereof, 

Having  regard  to  Council  Decision  [XX]  of  [date]  authorising  enhanced  cooperation  on  the 
establishment of a Loan for Ukraine, and in particular Article 1 thereof, 

Having regard to the proposal from the Commission, 

After transmission of the draft legislative act to the national parliaments, 

Acting in accordance with the ordinary legislative procedure, 

Whereas: 

(1) 

(2) 

(3) 

9 

10 

11 

On  24  February  2022,  the  President  of  the  Russian  Federation  announced  a  military 
operation in Ukraine, and Russia’s armed forces began an unprovoked and unjustified 
military  aggression  against  Ukraine.  This  illegal  war  of  aggression  is  a  blatant 
violation of the territorial integrity, sovereignty and independence of Ukraine, as well 
as  a  violation  of  the  prohibition  on  the  use  of  force  enshrined  in  Article  2(4)  of  the 
United Nations (UN) Charter, which is a peremptory rule of international law, and of 
the other principles of the UN Charter. 

Since the beginning of Russia’s unprovoked and unjustified war of aggression against 
Ukraine,  the  Union,  its  Member  States  and  European  financial  institutions  have 
mobilised  unprecedented  support  for  Ukraine’s  economic,  social,  financial  and 
defence  resilience.  That  support  combines  support  from  the  Union  budget,  including 
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. 
Decision (EU) 2022/313 of the European Parliament and the Council9, Decision (EU) 
2022/1201 of the European Parliament and the Council10, Decision (EU) 2022/1628 of 
the  European  Parliament  and  the  Council11  and  Regulation  (EU)  2022/2463  of  the 

assistance 

to  Ukraine 

Decision (EU) 2022/313 of the European Parliament and of the Council of 24 February 2022 providing 
macro-financial 
ELI: 
http://data.europa.eu/eli/dec/2022/313/oj). 
Decision  (EU)  2022/1201  of  the  European  Parliament  and  of  the  Council  of  12  July  2022  providing 
exceptional  macro-financial  assistance 
(OJ  L  186,  13.7.2022,  p.  1,  ELI: 
to  Ukraine 
http://data.europa.eu/eli/dec/2022/1201/oj). 
Decision  (EU)  2022/1628  of  the  European  Parliament  and  of  the  Council  of  20  September  2022 
providing exceptional macro-financial assistance to Ukraine, reinforcing the common provisioning fund 

28.2.2022, 

(OJ 

55, 

4, 

p. 

L 

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1 

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European Parliament and the Council12 collectively made available EUR 25.2 billion 
of  macro-financial  assistance  to  Ukraine  throughout  2022  and  2023.  This  support 
constituted  a  major  contributing  factor  to  Ukraine’s  macroeconomic  and  financial 
resilience at a critical time. 

 On 29 February 2024, Regulation (EU) 2024/792 of the European Parliament and of 
the  Council13  established  the  Ukraine  Facility  as  an  exceptional  medium-term 
instrument that brings together the bilateral support provided by the Union to Ukraine, 
ensuring coordination and efficiency (the ‘Ukraine Facility’). Over the period 2024 to 
2027, the Ukraine Facility helps address Ukraine’s financing needs and contributes to 
its  recovery,  reconstruction  and  modernisation  needs,  while  at  the  same  time 
supporting Ukraine’s reforms effort as part of its path towards accession to the Union. 

On 24 October 2024, Regulation (EU) 2024/2773 of the European Parliament and the 
Council14  established  the  Ukraine  Loan  Cooperation  Mechanism  and  provided 
exceptional  macro-financial  assistance  to  Ukraine.  That  assistance  was  the  Union 
contribution  as  part  of  the  G7  ‘Extraordinary  Revenue  Acceleration  Loans  for 
Ukraine’ initiative, which collectively assisted in addressing Ukraine’s financing gap 
for 2025. 

Russia’s  war  of  aggression  against  Ukraine  has  caused  tremendous  damage  in 
Ukraine, with estimated recovery and reconstruction costs of EUR 506 billion as of 31 
December 2024. Moreover, Ukraine has lost access to international financial markets 
and  experienced  a  significant  drop  in  public  revenue,  while  public  expenditure  has 
increased  substantially.  Against  that  background,  substantive  funding  needs  for  the 
coming years can be foreseen. 

On  9  September  2025,  Ukraine  submitted  an  official  request  to  the  International 
Monetary Fund (IMF) for a new programme to cover additional financing needs from 
2026  to  2029.  That  programme  would  succeed  the  successful  implementation  of  the 
existing  IMF  programme,  where  Ukraine  completed  eight  reviews,  but  takes  into 
consideration  that  Russia’s  war  of  aggression  has  continued.  The  IMF’s  ability  to 
proceed  with  this  programme  is  contingent  upon  receiving  sufficient  financing 
assurances from other partners, including the European Union. 

Despite ongoing international efforts to broker a peaceful resolution to the conflict, the 
prolongation  of  Russia's  war  of  aggression  has  resulted  in  significant  damage  to 
Ukraine's  critical  defence,  civilian  and  energy  infrastructure,  necessitating  the 
mobilisation  of  substantial  additional  resources  to  address  the  country's  immediate 
financing needs.  

by  guarantees  by  Member  States  and  by  specific  provisioning  for  some  financial  liabilities  related  to 
Ukraine guaranteed under Decision No 466/2014/EU, and amending Decision (EU) 2022/1201 (OJ L 
245, 22.9.2022, p. 1, ELI: http://data.europa.eu/eli/dec/2022/1628/oj). 
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, ELI: http://data.europa.eu/eli/reg/2022/2463/oj). 
Regulation  (EU)  2024/792  of  the  European  Parliament  and  of  the  Council  of  29  February  2024 
establishing 
ELI: 
http://data.europa.eu/eli/reg/2024/792/oj). 
Regulation  (EU)  2024/2773  of  the  European  Parliament  and  of  the  Council  of  24  October  2024 
establishing  the  Ukraine  Loan  Cooperation  Mechanism  and  providing  exceptional  macro-financial 
assistance to Ukraine (OJ L, 2024/2773, 28.10.2024, ELI: http://data.europa.eu/eli/reg/2024/2773/oj). 

29.2.2024, 

2024/792, 

Ukraine 

Facility 

(OJ 

the 

L, 

(4) 

(5) 

(6) 

(7) 

(8) 

12 

13 

14 

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(9) 

Russia’s war of aggression against Ukraine represents a strategic geopolitical threat to 
the  Union  as  a  whole  and  requires  Member  States  to  stand  strong  and  united.  It  is 
therefore  essential  that  Union  support  be  deployed  rapidly  and  be  able  to  adapt 
flexibly  for  immediate  relief  and  short-term  rehabilitation  on  the  way  to  future 
reconstruction. 

(10) 

In line with  the Articles on the Responsibility of States for Internationally Wrongful 
Acts and customary international law, Russia – as the responsible state – is under an 
obligation to make full reparation for the injury caused by its war of aggression. 

(11)  Decision (CFSP) 2022/335 of 28  February 2022  amending Decision 2014/512/CFSP 
concerning restrictive measures in view of Russia’s actions destabilising the situation 
in  Ukraine15  and  Council  Regulation  (EU)  2022/334  of  28  February  2022  amending 
Council  Regulation  (EU)  No  833/201416  prohibits  transactions  related  to  the 
management of reserves as well as of assets of the Central Bank of Russia including 
transactions  with  any  legal  person,  entity  or  body  acting  on  behalf  of,  or  at  the 
direction  of,  the  Central  Bank  of  Russia.  In  its  conclusions  of  27  June  2024,  17 
October 2024 and 19 December 2024, the European Council has stated that, subject to 
Union law, Russia’s assets  should remain immobilised until Russia ceases its war of 
aggression against Ukraine and compensates it for the damage caused by this war. 
(12)  Additionally, Council Regulation (EU) 2025/260017 prohibits the transfer of assets or 
reserves of the Central Bank of Russia on a temporary basis until Russia ceases its war 
of  aggression  against  Ukraine;  Russia  provides  reparations  to  Ukraine  to  the  extent 
necessary  to  allow  for  reconstruction  without  adverse  economic  or  financial 
consequences  for  the  Union;  and  Russia’s  actions  in  the  context  of  its  war  of 
aggression  against  Ukraine  have  objectively  ceased  to  pose  a  serious  risk  of  severe 
difficulties to the economy of the Union and its Member States. 

(13)  On 18 December 2025, the European Council has agreed to provide a loan to Ukraine 
of  EUR  90  billion  for  the  years  2026  and  2027  based  on  Union  borrowing  on  the 
capital  markets  backed  by  the  Union  budget  headroom.  The  European  Council  also 
agreed  that  by  means  of  enhanced  cooperation  in  accordance  with  Article  20  of  the 
Treaty on European Union, any mobilisation of resources of the Union’s budget as a 
guarantee for this  loan  should not  have an impact  on the financial obligations  of the 
Czech  Republic,  Hungary  and  Slovakia.  On  the  same  date,  25  Member  States  have 
agreed that this loan should be repaid by Ukraine only once reparations are received. 
Until then, the assets of the Central Bank of Russia should remain immobilised and the 
Union  should  reserve  its  right  to  make  use  of  them  to  repay  the  loan,  in  full 
accordance  with  EU  and  international  law.  Those  Member  States  underlined  the 
importance of the following elements in relation to the loan: (a) strengthening of the 
European and Ukrainian defence industries; (b) Ukraine continuing to uphold the rule 
of  law,  including  the  fight  against  corruption;  and  (c)  the  specific  character  of  the 

15 

16 

17 

Council  Decision  (CFSP)  2022/335  of  28  February  2022  amending  Decision  2014/512/CFSP 
concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine (OJ L 
57, 28.2.2022, p. 4, ELI: http://data.europa.eu/eli/dec/2022/335/oj). 
Council  Regulation  (EU)  2022/334  of  28  February  2022  amending  Council  Regulation  (EU)  No 
833/2014  concerning  restrictive  measures  in  view  of  Russia’s  actions  destabilising  the  situation  in 
Ukraine (OJ L 57, 28.2.2022, p. 1, ELI: http://data.europa.eu/eli/reg/2022/334/oj). 
Council  Regulation  (EU)  2025/2600  of  12  December  2025  on  emergency  measures  addressing  the 
serious economic difficulties caused by Russia’s actions in the context of the war of aggression against 
Ukraine (OJ L, 2025/2600, 13.12.2025, ELI: http://data.europa.eu/eli/reg/2025/2600/oj). 

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security  and  defence  policy  of  certain  Member  States  and  the  security  and  defence 
interests of all Member States. 

(14)  On  [DATE],  the  Council  adopted  Decision  [XX]  authorising  enhanced  cooperation 
between  Belgium,  Bulgaria,  Denmark,  Germany,  Estonia,  Ireland,  Greece,  Spain, 
France,  Italy,  Croatia,  Cyprus,  Latvia,  Lithuania,  Luxembourg,  Malta,  Netherlands, 
Austria,  Poland,  Portugal,  Romania,  Slovenia,  Finland  and  Sweden  on 
the 
establishment of a Loan for Ukraine. 

(15)  Given the financing position of Ukraine, the criticality that Ukraine has the resources 
to counter Russia’s aggression and, where possible, reconstruct, it is appropriate that 
the  Union  provide  additional  support  to  address  Ukraine's  urgent  financing 
requirements and facilitate the implementation of the IMF programme. To that end, it 
is  appropriate  to  establish  an  instrument  for  providing  Union  support  to  Ukraine  in 
2026  and  2027  in  the  form  of  a  loan  to  be  repaid  by  reparations  due  by  Russia  (the 
‘Ukraine Support Loan’). 

(16)  The  Ukraine  Support  Loan  should  provide  financial  assistance  to  Ukraine  in  a 
predictable, continuous, orderly, flexible and timely manner with a view of supporting 
Ukraine in covering its financing and defence needs, in particular those resulting from 
Russia’s  war  of  aggression.  Specifically,  the  Ukraine  Support  Loan  should  support 
macro-financial  stability  in  Ukraine  and  ease  its  external  financing  and  support 
Ukraine’s  defence  industrial  capacities  through  economic,  financial  and  technical 
cooperation, thereby contributing to providing Ukraine a Qualitative Military Edge. 

(17)  The Ukraine Support Loan should, subject to conditions, provide support to Ukraine in 
the form  of a loan of up to  EUR  90  000 000 000.  In view of the principle of sound 
financial  management,  the  Ukraine  Support  Loan  should  be  made  available  by  the 
Commission in instalments, which may be disbursed in one or more tranches. 

(18)  The  support  to  Ukraine  under  the  Ukraine  Support  Loan  should  be  made  available 
under  the  precondition  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 those of persons belonging 
to minorities. Upholding and respecting the rule of law should include the fight against 
corruption. 

(19)  The  financial  and  economic  assistance  available  under  the  Ukraine  Support  Loan 
should  be  made  accessible  to  Ukraine  in  line  with  its  financing  needs.  To  that  end, 
Ukraine  should  submit  a  Ukrainian  Financing  Strategy  on  its  financing  needs  and 
sources.  That  Ukrainian  Financing  Strategy  should  contain  the  main  information  on 
Ukraine’s budget, financial and economic situation, as well as the support that Ukraine 
is receiving from the international community. 

(20)  The Commission should assess the Ukrainian Financing Strategy without undue delay 
and  should  act  in  close  cooperation  with  Ukraine.  Given  the  significant  scale  of 
Ukraine’s  needs  for  both  budget  assistance  and  assistance  for  defence  industrial 
capacities, as well as the constraints that some external partners have on the provision 
of their support, it is appropriate to establish an indicative distribution of the Ukraine 
Support  Loan  between  those  two  financing  needs.  Whilst  ensuring  that  Ukraine’s 
financing needs as calculated by the IMF for 2026 are fully addressed, that distribution 
should  be  indicative  in  order  to  reflect  changing  circumstances  that  may  impact 
Ukraine’s financing needs and to ensure that those needs continue to be addressed in a 
predictable, continuous,  orderly, flexible and timely manner. In its assessment of the 

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(21) 

Ukrainian Financing Strategy, the Commission should consider the consistency of the 
expected external financing gap with that indicative distribution. 

In  view  of  the  importance  of  the  financial  effects  of  the  measures  imposed, 
implementing  powers  should  be  conferred  on  the  Council  which  should  act  on  the 
basis  of  a  Commission  proposal.  The  Council  should  approve  the  assessment  of  the 
Ukrainian Financing Strategy by means of an implementing decision, which it should 
endeavour  to  adopt  without  undue  delay  from  the  adoption  of  the  proposal.  That 
implementing  decision  should  determine  the  amount  of  assistance  to  be  made 
accessible  to  Ukraine  to  assist  in  the  implementation  of  the  Ukrainian  Financing 
Strategy,  including  the  amount  for  budget  assistance  and  the  amount  for  supporting 
Ukraine’s defence industrial capacities.  

(22)  Financial  and  economic  assistance  in  the  form  of  budget  assistance  should  be  made 
available in view of supporting Ukraine in covering its financing needs. The financial 
and economic assistance under this Regulation provides important input into Ukraine’s 
post-war economic recovery, long-term growth  and prosperity all of which will have 
an  important  role  to  play  in  a  future  peace  agreement.  To  ensure  flexibility  in 
addressing  those  needs,  it  is  appropriate  to  use  multiple  means  of  delivery,  where 
support should be able to be provided through macro-financial assistance and through 
a loan to be implemented pursuant to Chapter III of the Ukraine Facility. 

(23)  Chapter III of the Ukraine Facility provides for financing to Ukraine upon satisfactory 
fulfilment of the conditions laid down in the Ukraine Plan, which sets out the reform 
and  investment  agenda  of  Ukraine.  As  a  medium-term  instrument  that  has  the 
objective  to  support  Ukraine’s  recovery  and  reconstruction,  gradual  integration  into 
the  internal  market,  as  well  as,  inter  alia,  the  adoption  and  implementation  of  the 
political,  institutional,  legal,  administrative,  social  and  economic  reforms  required  to 
align to Union values and to progressively align to Union rules, standards, policies and 
practices (‘acquis’) with a view to future Union membership, thereby contributing to 
mutual  stability,  security,  peace,  prosperity  and  sustainability,  it  is  appropriate  to 
provide for amounts stemming from the Ukraine Support Loan to be utilised through 
the  Ukraine  Facility.  The  Ukraine  Plan  should  be  updated  to  reflect  these  this 
additional budget assistance, including measures to strengthen the rule of law and the 
fight against corruption. 

(24)  Macro-financial  assistance  should  be  linked  to  policy  conditions  to  be  set  out  in  the 
MoU.  The  MoU  should  include  robust  and  ambitious  reform  commitments  by 
Ukraine,  including  those  to  strengthen  revenue  mobilisation  to  support  Ukraine’s 
financing needs and tackle the root causes of corruption in public finances, including 
via improving the sustainability  and quality  of public expenditure and  enhancing the 
efficiency, transparency and accountability of the public finance management systems. 
Such macro-financial assistance may be used by Ukraine to assist in the financing of 
compensation,  as  a  form  of  reparations,  to  those  individuals  who  have  suffered 
damage from the illegal actions of Russia, including through the Claims Commission 
for  Ukraine  established  under  the  auspices  of  the  Council  of  Europe.  The  Council 
implementing decision approving the assessment of the Ukrainian Financing Strategy 
should  establish  the  maximum  number  and  indicative  value  of  instalments  for  the 
macro-financial  assistance.  In  view  of  the  principle  of  sound  financial  management 
and  to  facilitate  the  Ukrainian  authorities’  liquidity  management  and  ensure 
predictability,  there  should,  in  principle,  be  a  maximum  of  four  instalments  of  that 
macro-financial assistance. 

EN 

5 

  EN 

(25) 

In order to ensure uniform conditions for the implementation of this Regulation, and 
for  reasons  of  efficiency,  the  Commission  should  be  empowered  to  negotiate 
conditions for the macro-financial assistance with the Ukrainian authorities under the 
supervision of the committee of representatives of the Participating Member States in 
accordance with Regulation (EU) No 182/2011 of the European Parliament and of the 
Council18. Considering the potentially significant impact of assistance, it is appropriate 
that the examination procedure as specified in Regulation (EU) No 182/2011 be used. 
Considering  the  amount  of  the  Ukraine  Support  Loan,  the  examination  procedure 
should apply to the adoption of the MoU and to  any reduction or cancellation of the 
Ukraine Support Loan. 

(26)  The  Ukraine  Support  Loan  should  provide  financial  and  economic  assistance  to 
Ukraine as  a  country at  war, the financial stability  of which is  intrinsically linked to 
and depends on its ability to defend itself against the aggression. This justifies that a 
specific amount of the financial and economic assistance to Ukraine is used to increase 
Ukraine’s  capacity  to  cope  with  budgetary  needs  in  relation  with  the  capacity  of  the 
country  to  strengthen  its  defence  and  military  capabilities,  thereby  contributing  to 
providing Ukraine a qualitative military edge. This financial and economic assistance 
should  aim  at  enabling  Ukraine  to  carry  out  urgent  and  major  public  investments  in 
support  of  the  Ukrainian  defence  industry  and  its  integration  into  the  European 
defence  industry  in  response  to  and  following  the  current  crisis  situation.  This 
assistance  should  contribute,  in  particular,  to  the  reconstruction,  recovery  and 
modernisation  of  the  Ukrainian  Defence  Technological  and  Industrial  Base,  with  a 
view  to  increasing  its  defence  industrial  readiness,  taking  into  account  its  gradual 
future  integration  into  the  European  Defence  Technological  and  Industrial  Base  and 
through support for the timely availability of defence products and other products for 
defence purposes, through cooperation between the Union and Ukraine. 

(27)  Financial  and  economic  assistance  to  support  Ukraine’s  defence  industrial  capacities 
should be made available for activities, expenditures and measures related to defence 
products or other products for defence purposes that meet certain eligibility criteria. In 
order  to  urgently  reinforce  the  Ukrainian  defence  industrial  base  in  an  efficient  and 
autonomous  manner,  those  eligibility  criteria  should  be  structured  in  a  manner  that 
directs  the  activities,  expenditures  and  measures  to  support  Ukraine’s  defence 
industrial  capacities  towards  the  reconstruction,  recovery  and  modernisation  of  the 
Ukrainian Defence Technological and Industrial Base, taking into account its gradual 
future  integration  into  the  European  Defence  Technological  and  Industrial  Base.  In 
that context, when examining whether manufacturers are controlled by third countries 
or  third-country  entities,  control  should  be  understood  as  the  ability  to  exercise  a 
decisive  influence  over  a  legal  entity,  directly  or  indirectly,  through  one  or  more 
intermediate legal entities. 

(28) 

18 

In order to allow Ukraine to use the financial and economic assistance in the way that 
is  the  most  adapted  to  the  circumstances,  it  is  appropriate  to  allow  it  to  employ  the 
funds  to  support  Ukraine’s  defence  industrial  capacities  by  different  implementation 
methods  that reflect  the  diversity of the needs. The funds may also  contribute to  the 
Ukraine  Support  Instrument  under  Regulation  (EU)  [the  EDIP  Regulation],  the 

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 
(OJ  L  55,  28.2.2011,  p.  13, 
of 
ELI: http://data.europa.eu/eli/reg/2011/182/oj). 

the  Commission’s  exercise  of 

implementing  powers 

EN 

6 

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Ukraine Investment Framework established by the Ukraine Facility for dual-use goods 
or other Union programmes. Moreover, the funds should allow Ukraine to engage in a 
massive intervention in the demand of defence products in order to create the suitable 
conditions  to  incentivise  massive  investments  in  the  ramp  up  of  the  production 
capacity and in the development of new products. To this purpose, Ukraine should be 
allowed  to  use  the  funds  to  launch  massive  procurements  of  defence  products  made 
from  the  Ukrainian  Defence  Technological  and  Industrial  Base  and  the  European 
Defence  Technological  and  Industrial  Base  via  procurements  under  the  SAFE 
Instrument set out by Council Regulation (EU) 2025/110619 or, subject to validations, 
under other modalities. 

(29)  For certain defence products whose underlying technologies are  not widely available 
in the Union and which may be difficult to substitute at a large scale, such as air and 
missile  defence  systems  and  strategic  enablers  additional  conditions  should  be 
required in order to ensure Ukraine’s armed forces freedom related to those products 
without limitations imposed by third countries. Therefore, for such defence products, 
the  manufacturer  should  have  the  ability  to  decide,  without  any  restriction  being 
imposed  by  third  countries  or  third-country  entities,  on  the  definition,  adaptation  or 
evolution of the design of the defence products procured, including the legal authority 
to  substitute  or  remove  those  components  that  are  subject  to  restrictions  imposed  by 
third countries or by third-country entities. 

(30)  To ensure a smooth implementation of this Regulation in conjunction with the SAFE 
Instrument,  it  is  appropriate  to  apply  similar  eligibility  conditions.  The  SAFE 
instrument  supports  the  procurement  of  defence  products  as  identified  in  the  SAFE 
regulation. The list of products being part of Category 1 and 2 has been agreed by the 
Council,  and  it  has  proven  comprehensive  enough  to  allow  support  for  the 
procurement of products needed by Member States, including air platforms. Given the 
constantly  evolving  situation  on  the  battlefield,  it  is  essential  to  avoid  that  the 
existence of a list of products that can be supported constrains Ukraine in getting the 
assistance it needs. Taking into account the fact that Ukraine is a country at war whose 
capacity to defend its territory might depend on the availability of a given product at 
very short term, Ukraine should be allowed to procure products which do not comply 
with these eligibility conditions where there is an urgent need for a product and where 
no  alternative  product  is  available  by  procurement.  To  that  end,  Ukraine  should 
provide to  the Commission the information  reasonably  available to  it to  demonstrate 
that a derogation is necessary, where whilst the war is ongoing, when Ukraine’s needs 
are as such urgent, it should not require extensive market research. In order to ensure 
uniform  conditions  for  the  implementation  of  this  Regulation,  and  for  reasons  of 
efficiency,  the  Commission  should  be  empowered  to  examine  such  requests  for 
derogations  under  the  supervision  of  the  committee  of  representatives  of  the 
Participating  Member  States  in  accordance  with  Regulation  (EU)  No  182/2011. 
Considering  the  potentially  significant  impact  of  assistance,  it  is  appropriate  that  the 
examination procedure as specified in Regulation (EU) No 182/2011 be used. Due to 
the  exceptional  situation  caused  by  Russia’s  war  of  aggression  and  the  necessity  for 
the timely availability of defence products, it is appropriate that the duly justified case 
referred to in Article 3(3) of Regulation (EU) No 182/2011 is invoked to allow for an 

19 

Council  Regulation  (EU)  2025/1106  of  27  May  2025  establishing  the  Security  Action  for  Europe 
(SAFE)  through  the  Reinforcement  of  the  European  Defence  Industry  Instrument  (OJ  L,  2025/1106, 
28.5.2025, ELI: http://data.europa.eu/eli/reg/2025/1106/oj). 

EN 

7 

  EN 

 
opinion of the committee within a time limit which the chair of the committee may lay 
down according to the urgency of the matter. Where necessary, the written procedure 
referred to in Article 3(5) of that Regulation should be used. 

(31)  To  further  ensure  a  smooth  implementation  of  Regulation  in  conjunction  with  the 
SAFE  Instrument,  it  is  appropriate  that  there  is  the  possibility  to  extend  eligibility 
conditions  to  manufacturers within  third countries that  have concluded an agreement 
with the Union in accordance with Article 17 of Council Regulation 2025/1106. 

(32)  This  Regulation  is  without  prejudice  to  applicable  international  law  prohibiting  the 
use, development or production of certain defence products and technologies.  

(33)  The  implementation  of  the  assistance  to  support  Ukraine’s  defence  industrial 
capacities  should  be  carried  out  in  line  with  the  principles  of  sound  financial 
management ensuring the protection of the financial interests of the Union as set out in 
Article  223(4)  of  Regulation  (EU,  Euratom)  2024/2509  of  the  European  Parliament 
and  the  Council20.  Detailed  requirements  in  this  respect  might  be  entered  into  an 
arrangement to be signed between the Commission and Ukraine. Furthermore, for the 
management  of  the  financial  and  economic  assistance  received  to  support  Ukraine’s 
defence  industrial  capacities,  Ukraine  should  open  a  single  account  via  which  to 
manage the assistance, where the Commission should be able to monitor that account. 

(34)  To  support  the  implementation  of  assistance  to  support  Ukraine’s  defence  industrial 
capacities,  the  Commission  should  establish  the  Ukraine’s  Defence  Industrial 
Capacities  Expert  Group.  That  Expert  Group  should  advise  the  Commission  on 
matters related to the assistance to support Ukraine’s defence industrial capacities. 

(35)  The  Commission  should  monitor  the  implementation  of  assistance  to  support 
Ukraine’s defence industrial capacities, notably including the delivery of products. To 
that end, various monitoring arrangements should be established to reflect the different 
methods of implementation. 

(36)  Directive  2009/81/EC  of  the  European  Parliament  and  of  the  Council21  concerns, 
amongst other things, the establishment of an appropriate legislative framework on the 
coordination of procurement procedures for the award of contracts to meet the security 
requirements of Member States and the obligations arising from the TFEU. To achieve 
that  aim,  that  Directive  2009/81/EC  caters,  in  particular,  for  addressing  crisis 
situations,  notably  by  providing  specific  provisions  applicable  in  cases  of  urgency 
resulting  from  a  crisis,  such  as  shortening  periods  for  the  receipt  of  tenders  and  the 
possibility  to  use  the  negotiated  procedure  without  prior  publication  of  a  contract 
notice.  However,  in  certain  cases  of  urgency,  those  rules  might  be  insufficient, 
especially where the urgency resulting from the crisis can be addressed only by having 
Ukraine  and  at  least  one  Participating  Member  State  engaging  in  a  common 
procurement. In those cases, often the only solution that ensures the security interests 
of  those  countries  is  to  open  an  existing  framework  agreement  or  contract  of  a 
Participating  Member  State  to  contracting  authorities  of  Ukraine  that  was  not 

20 

21 

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). 
Directive 2009/81/EC of the European Parliament and of the Council of 13 July 2009 on the coordination 
of  procedures  for  the  award  of  certain  works  contracts,  supply  contracts  and  service  contracts  by 
contracting  authorities  or  entities  in  the  fields  of  defence  and  security,  and  amending  Directives 
2004/17/EC and 2004/18/EC (OJ L 216, 20.8.2009, p. 76, ELI: http://data.europa.eu/eli/dir/2009/81/oj). 

EN 

8 

  EN 

 
originally  party  to  it,  even  though  that  possibility  had  not  been  provided  for  in  the 
original  framework  agreement  or  contract.  As  those  possibilities  are  not  foreseen  in 
Directive  2009/81/EC  at  the  moment  of  the  entry  into  force  of  this  Regulation,  the 
latter  provides  for  the  possibility  to  complement  or  derogate  from  the  provisions  of 
that  Directive  in  the  current  crisis  situation  stemming  from  the  war  of  aggression  of 
Russia,  provided  that  the  agreement  of  the  undertaking  which  concluded  the 
framework  agreement  is  obtained.  With  respect  to  additional  quantities  for  Ukraine, 
Ukrainian  contracting  authorities  should  enjoy  the  same  conditions  as  the  original 
contracting  authority  that  concluded  the  original  framework  agreement.  In  addition, 
appropriate  transparency  measures  should  be  taken  to  ensure  that  all  potentially 
interested parties are informed. 

(37)  Council  Regulation  (EU)  2025/1106  provides  for  financial  assistance  to  Member 
States, enabling them to carry out urgent and major public investments in support of 
the  European  defence  industry  in  response  to  the  crisis  situation  resulting  from  the 
stark  deterioration  in  the  Union’s  security  context.  With  that  instrument,  the  Union 
started  to  support  Member  States  so  that they  can  place  orders  rapidly,  incentivising 
the defence industrial sector to invest, in the very short term, in the strengthening of 
production  capacities  in  order  to  be  able  to  serve  Member  States  needs  by  2030.  In 
addition,  this  Regulation  supports  the  placement  of  Ukrainian  orders  with  the 
European  Defence  Technological  and  Industrial  Base  in  order  to  support  the 
cooperation between the European Defence Technological and Industrial Base and the 
Ukrainian  Defence  Technological  and  Industrial  Base.  Such  an  exceptionally  high 
demand  for  a  wide  range  of  defence  products  carries  an  imminent  risk  of  a  severe 
negative impact on the proper functioning of the internal market.  In order to address 
this  risk  and  in  view  of  the  objectives  of  this  Regulation,  taking  into  account  the 
specific situation of Ukraine, prioritisation measures at Union level that aim to ensure 
the availability of the defence products concerned could prove to be indispensable in 
ensuring  the  proper  functioning  of  the  internal  market  for  defence  products  and  its 
supply chains. The Commission should be able to use in this respect, upon a request of 
a  Participating  Member  State,  priority-rated  requests  for  facilitating  the  supply  of 
defence products to meet the objectives of this Regulation. 

(38)  Priority-rated  requests  should  consist  of  requests  by  the  Commission,  upon  an 
initiative of a Participating Member State, to relevant economic operators established 
in  the  Union  to  accept  or  to  prioritise  orders  of  crisis-relevant  products.  Only  to  be 
used when necessary and proportionate for the purpose of ensuring that defence supply 
chains  can  operate  normally,  those  priority-rated  requests  should  be  aimed  at 
supporting Ukraine which faces severe difficulties either in the placing of an order or 
in the execution of a contract for the supply of defence products. Economic operators 
should  have  the  possibility  to  refuse  to  be  subject  to  a  priority-rated  request.  A 
priority-rated  request  should  be  taken  based  on  objective,  factual,  measurable  and 
substantiated data. It should have regard for the legitimate interests of the undertakings 
and  the  cost  and  effort  required  for  any  change  in  production  sequence.  When 
accepted,  the  obligation to  perform  the  priority-rated  request  should  take  precedence 
over performance obligations under private or public law. In light of the importance of 
ensuring  the  supply  of  defence  products,  which  are  indispensable  to  the  correct 
functioning  of  the  internal  market  and  its  supply  chains,  compliance  with  the 
obligation to perform a priority-rated request should not entail liability to third parties 
for damages that might result from any breach of contractual obligations governed by 
the law of a Member State, to the extent that the breach of contractual obligations was 
necessary  for  compliance  with  the  mandated  prioritisation.  Where  the  economic 

EN 

9 

  EN 

operator  has  expressly  accepted  a  priority-rated  request  and  the  Commission  has 
adopted  an  implementing  act  following  such  an  acceptance,  the  economic  operator 
should  comply  with  all  the  conditions  of  that  implementing  act.  Non-compliance  by 
the economic operator with the conditions laid down in the implementing act should 
result  in  a  loss  of  the  benefit  of  a  waiver  of  contractual  liability.  Where  the  non-
compliance is  intentional  or attributable to  gross negligence, the Commission  should 
be  able  to  impose  on  the  economic  operator  a  fine,  subject  to  the  proportionality 
principle. 

(39)  Given  that  specific  amounts  should  be  made  available  for  budget  assistance  and 
industrial  capacities,  coherence  and 

assistance 
complementarity should be ensured in their respective implementation. 

to  support  Ukraine’s  defence 

(40)  This Regulation should apply without prejudice to the specific character of the security 

and defence policy of certain Member States. 

(41)  This  Regulation  does  not  apply  to  Member  States  that  are  not  participant  to  the 
enhanced cooperation. In this context, it should be recalled that  the non-participation 
of certain Member States to this enhanced cooperation does not exempt them from the 
obligation to ensure the full enforcement of Article 325 TFEU and the Union acquis 
aiming  at  ensuring  the  protection  of  Union’s  financial  interests,  including  Council 
Regulation  (EC,  Euratom) No 2988/9522;  Regulation  (EU,  Euratom) No 883/2013  of 
the  European  Parliament  and  of  the  Council23,  Directive  (EU)  2017/1371  of  the 
European  Parliament  and  of  the  Council24,  the  rules  of  Regulation  (EU,  Euratom) 
2024/2509  and  where  applicable,  Council  Regulation  (EU)  2017/193925.  These 
Member  States  and  the  economic  entities  under  their  jurisdiction  should  thus  fully 
collaborate with the Court of Auditor, OLAF, the Commission and, where applicable 
EPPO, in the exercise of their competences. 

(42)  The Ukraine Support Loan Agreement to be concluded between the Commission and 
the  Ukrainian  authorities  should  contain  provisions  aligned  with  the  rights, 
responsibilities  and  obligations  provided  for  in  the  framework  agreement  under  the 
Ukraine Facility referred to in Article 9 of Regulation (EU) 2024/792 signed between 
the Union and Ukraine that entered into force on 20 June 2024. That will ensure that 
the  Union’s  financial  interests  linked  to  the  Ukraine  Support  Loan  are  protected 
efficiently, providing the appropriate measures relating to the prevention of, and fight 
against,  fraud,  corruption  and  any  other  irregularities  linked  to  the  assistance.  It  will 
also,  in  accordance  with  Regulation  (EU,  Euratom)  2024/2509,  grant  the  necessary 
rights  and  access  to  the  Commission,  the  European  Anti-Fraud  Office  (OLAF),  the 
European Court of Auditors and, where applicable, the European Public Prosecutor’s 

22 

23 

24 

25 

L 

(OJ 

312, 

interests 

financial 

23.12.1995, 

Council Regulation (EC, Euratom) No 2988/95 of 18 December 1995 on the protection of the European 
Communities 
ELI: 
http://data.europa.eu/eli/reg/1995/2988/oj). 
Regulation (EU, Euratom) No 883/2013 of the European Parliament and of the Council of 11 September 
2013  concerning  investigations  conducted  by  the  European  Anti-Fraud  Office  (OLAF)  and  repealing 
Regulation  (EC)  No 1073/1999 of  the  European  Parliament  and  of  the  Council  and  Council  Regulation 
(Euratom) No 1074/1999 (OJ L 248, 18.9.2013, p. 1, ELI: http://data.europa.eu/eli/reg/2013/883/oj). 
Directive  (EU)  2017/1371  of  the  European  Parliament  and  of  the  Council  of  5  July  2017  on  the  fight 
against  fraud  to  the  Union's  financial  interests  by  means  of  criminal  law  (OJ  L  198,  ,  p.  29, 
ELI: http://data.europa.eu/eli/dir/2017/1371/oj). 
Council  Regulation  (EU)  2017/1939  of  12  October  2017  implementing  enhanced  cooperation  on  the 
establishment of the European Public Prosecutor’s Office (‘the EPPO’) (OJ L 283, 31.10.2017, p. 1, ELI: 
http://data.europa.eu/eli/reg/2017/1939/oj). 

1, 

p. 

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10 

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Office,  including  from  third  parties  involved  in  the  implementation  of  Union  funds 
during and after the availability period of the  Ukraine Support Loan. Ukraine should 
also report irregularities in relation to the use of the funds to the Commission, in line 
with  the  procedures  provided  for  in  the  framework  agreement  under  the  Ukraine 
Facility. 

(43)  Given the difficult  situation of Ukraine caused by Russia’s war of aggression  and in 
order to support Ukraine on its long-term stability path, it is appropriate for the Union 
to provide the Ukraine Support Loan as a limited recourse loan that is to become due 
and payable when Ukraine receives from Russia cash or non-monetary assets for war 
reparations, indemnities or any financial settlement from Russia, other than territory.  

(44)  The  release  of  funds  under  the  Ukraine  Support  Loan  should  be  contingent  on  the 
positive assessment by the Commission of a request for funds submitted by Ukraine. 
For the macro-financial assistance, the assessment of the conditions should be without 
prejudice  to  the  assessment  of  the  fulfilment  of  conditions  under  other  Union 
programmes  and  instruments.  For  the  assistance  to  support  Ukraine’s  defence 
industrial capacities, the release of funds should be linked to contracts or agreements 
for  activities,  expenditures  and  measures  to  support  Ukraine’s  defence  industrial 
capacities related to defence products or other products for defence purposes. 

(45)  This  Regulation  should  lay  down  appropriate  provisions  for  the  financing  of  the 

Ukraine Support Loan. 

(46) 

(47) 

In the context of Ukraine’s financing needs, it is appropriate to organise the financial 
assistance  under  the  diversified  funding  strategy  provided  for  in  Article  224  of 
Regulation (EU, Euratom) 2024/2509. 

In line with the firm support of 25 Heads of State and Government in the margins of 
the  European  Council  of  18  December  2025,  the  Ukraine  Support  Loan  should  be 
repaid by Ukraine once reparations from Russia are received, and the Union reserves 
its right to make use of the Russian assets immobilised in the Union to repay the loan, 
in full accordance with EU and international law. 

(48)  By  way  of  derogation  from  Article  31(3)  of  Regulation  (EU)  2021/947  of  the 
European Parliament and of the Council26, the financial liability from loans under this 
Regulation should not be supported by the External Action Guarantee, established by 
that Regulation. Support in the form of loans under this Regulation should constitute 
financial assistance within the meaning of Article 223(1) of Regulation (EU, Euratom) 
2024/2509.  In  considering  the  financial  risks  and  the  presence  of  guarantees,  no 
provisioning  should  be  constituted  for  the  support  in  the  form  of  loans  under  this 
Regulation, to be guaranteed over and above the ceilings, and, by way of derogation 
from  Article  214(1)  of  Regulation  (EU,  Euratom)  2024/2509,  no  provisioning  rate 
should be set. 

(49)  Given the situation of Ukraine, caused by Russia’s war of aggression and to support it 
on its long-term stability path, it is appropriate to derogate from Article 223(4), point 

26 

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) (OJ  L 209,  14.6.2021, p.  1,  ELI: 
http://data.europa.eu/eli/reg/2021/947/2021-06-14). 

EN 

11 

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(50) 

(e), of Regulation (EU, Euratom) 2024/2509 and to allow the Union the possibility to 
provide a borrowing costs subsidy to cover the costs that would otherwise be borne by 
Ukraine. These costs comprise debt service costs (cost of funding and cost of liquidity 
management)  and  related  administrative  costs.  The  borrowing  costs  subsidy  to  be 
granted  is  deemed  appropriate  to  ensure  the  effectiveness  of  the  support  under  the 
Ukraine  Support  Loan  within  the  meaning  of  Article  223(1)  of  Regulation  (EU, 
Euratom) 2024/2509, notably to avoid adding pressure on Ukraine’s public finances.  

In  accordance  with  Article  332  TFEU,  expenditure  other  than  administrative  costs 
entailed for the institutions  resulting  from  the enhanced cooperation should be borne 
by  the  Participating  Member  States.  To  that  effect,  Member  States  which  do  not 
participate in enhanced cooperation should be entitled to an adjustment in accordance 
with Article 11 of Council Regulation (EU, Euratom) No 609/201427 in respect of any 
operational  expenditure  borne  by  the  Union  budget,  comprising  in  particular  debt 
service  costs,  as  well  as  calls  on  the  guarantee.  Administrative  costs  entailed  for  the 
institutions  when  implementing  enhanced  cooperation  should  be  borne  by  the  Union 
budget  without  any  adjustment  for  the  Member  States  which  do  not  participate  in 
enhanced cooperation. 

(51)  Union  support  to  Ukraine  under  this  Regulation  should  be  managed  by  the 

Commission. 

(52)  The  assistance  to  Ukraine  under  the  Ukraine  Support  Loan  should  be  additional  and 
complementary  to  the  Union  support  provided  under  the  Ukraine  Facility.  The 
Commission  should,  wherever  possible,  seek  to  minimise  the  administrative  and 
reporting burden on Ukraine. 

(53)  The Commission should duly take into account Council Decision 2010/427/EU28 and 
the role of the European External Action Service, in line with their competences. 

(54)  The competent committee of the European Parliament might invite the Commission to 
discuss in a Ukraine Support Loan dialogue matters that concern the implementation 
of the Regulation. The Commission should take into account elements arising from the 
views expressed through the Ukraine Support Loan dialogue, including the resolutions 
from the European Parliament if provided. 

(55) 

(56) 

27 

28 

In order to ensure that the European Parliament and the Council are able to follow the 
implementation  of this  Regulation,  the Commission  should regularly inform them of 
developments  relating  to  Union  assistance  to  Ukraine  under  this  Regulation  and 
provide them with the relevant documents. 

In order to ensure the continued effectiveness of the arrangements established by this 
Regulation, the Commission should regularly review their adequacy and report to the 
European  Parliament  and  to  the  Council  thereon,  thereby  guaranteeing  transparency 
and accountability. 

Council  Regulation  (EU,  Euratom)  No  609/2014  of  26  May  2014  on  the  methods  and  procedure  for 
making available the traditional, VAT and GNI-based own resources and on the measures to meet cash 
requirements (Recast) (OJ L 168, 7.6.2014, p. 39, ELI: http://data.europa.eu/eli/reg/2014/609/oj). 
Council  Decision  2010/427/EU  of  26  July  2010  establishing  the  organisation  and  functioning  of  the 
ELI: 
(OJ 
European 
http://data.europa.eu/eli/dec/2010/427/oj). 

3.8.2010, 

External 

Service 

Action 

201, 

30, 

p. 

L 

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(57) 

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. 

(58)  Since  the  objectives  of  this  Regulation,  namely  to  provide  financial  and  economic 
assistance  to  Ukraine  for  2026  and  2027  in  a  predictable,  continuous,  orderly  and 
timely  manner  with  a  view  to  supporting  Ukraine  in  coverings  its  financing  needs 
resulting  from  Russia’s  war  of  aggression,  cannot  be  sufficiently  achieved  by  the 
Member States but can rather, by reasons of their scale and effect, be better achieved 
at  Union  level,  the  Union  may  adopt  measures,  where  appropriate  by  means  of 
enhanced  cooperation,  in  accordance  with  the  principle  of  subsidiarity  as  set  out  in 
Article  5  of  the  Treaty  on  European  Union.  In  accordance  with  the  principle  of 
proportionality, as set out in that Article, this Regulation does not go beyond what is 
necessary in order to achieve those objectives. 

(59) 

In view of the urgency entailed by the exceptional circumstances caused by Russia’s 
unprovoked  and  unjustified  war  of  aggression,  it  is  considered  to  be  appropriate  to 
invoke the exception to the eight-week period provided for in Article 4 of Protocol No 
1 on the role of national Parliaments in the European Union, annexed to the Treaty on 
European Union, to the Treaty on the Functioning of the European Union and to the 
Treaty establishing the European Atomic Energy Community. 

(60) 

In light of the situation in Ukraine, 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, 

HAVE ADOPTED THIS REGULATION: 

CHAPTER I 
GENERAL PROVISIONS 

Article 1 
Subject matter 

1.  This Regulation implements enhanced cooperation on the establishment of an instrument 

for providing Union assistance to Ukraine for 2026 and 2027 in the form of a loan to be 

repaid by reparations due by Russia (the ‘Ukraine Support Loan’). 

2. 

It lays down the objective of the Ukraine Support Loan, its financing, the forms of Union 

funding under it and the rules for providing such funding. 

Article 2 
Objectives of the Ukraine Support Loan 

1.  The  general  objective  of  the  Ukraine  Support  Loan  shall  be  to  provide  financial  and 

economic assistance to Ukraine in a predictable, continuous, orderly, flexible and timely 

manner  with  a  view  to  supporting  Ukraine  in  covering  its  financing  needs  notably 

resulting from Russia’s war of aggression and Russia’s non-payment of reparations due. 

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2.  To  achieve  this  general  objective,  the  specific  objectives  of  the  Ukraine  Support  Loan 

shall be: 

a.  To  support  macro-financial  stability  via  easing  Ukraine’s  external  and  internal 

financing constraints; 

b. 

to support Ukraine’s defence industrial capacities through economic, financial and 

technical cooperation. 

For the purposes of this Regulation the following definitions apply: 

Article 3 
Definitions 

(1) 

(2) 

(3) 

(4) 

(5) 

(6) 

‘defence product’ means goods, services and works that fall within the scope of 
Directive 2009/81/EC, as set out in Article 2 thereof; 

‘EEA EFTA State’ means a Member of the European Free Trade Association 
which is a member of the European Economic Area; 

‘ERA  Loans’  means  eligible  bilateral  loans  and  the  Union’s  Macro-financial 
Assistance loan pursuant to Regulation (EU) 2024/2773; 

‘Non-Participating  Member  State’  means  a  Member  State  which  does  not 
participate in the enhanced cooperation established by Council Decision [XX]; 

‘Participating Member State’ means a Member State which participates in the 
enhanced cooperation established by Council Decision [XX]; 

‘other products for defence purposes’ means any good, service and work other 
than  those  falling  within  the  scope  of  Directive  2009/81/EC,  as  set  out  in 
Article 2 thereof, which are necessary for or aimed at defence purposes. 

Article 4 
Available assistance under the Ukraine Support Loan 

1.  The  Ukraine  Support  Loan  shall  be  for  a  maximum  amount  of  EUR  90  000  000  000. 

That amount shall be made available to Ukraine in accordance with Ukraine’s financing 

needs, as provided for in the Ukrainian Financing Strategy approved in accordance with 

Article 8. 

2.  The Ukraine Support Loan shall be available until 31 December 2027. It shall be made 

available  by  the  Commission  in  instalments,  which  may  be  disbursed  in  one  or  more 

tranches. The disbursement of all such tranches shall take place by 31 December 2028. 

3. 

If  the  financing  needs  of  Ukraine  decrease  fundamentally  during  the  period  of 

availability of the Ukraine Support Loan, including in the event of a settlement by Russia 

of Ukraine’s war damages, the Commission, acting in accordance with the examination 

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procedure  referred  to  in  Article  27(3),  may  reduce  the  undisbursed  amount  of  the 

Ukraine Support Loan or cancel it. 

4. 

In accordance with Article 332 TFEU, Non-Participating Member States shall be entitled 

to an adjustment in accordance with Article 11 of Council Regulation (EU, Euratom) No 

609/2014  in  respect  of  expenditure  financed  from  the  voted  budget  resulting  from  the 

implementation of the enhanced cooperation other than administrative costs entailed for 

the institutions, borne by the Union budget. Such adjustment shall in particular comprise 

any debt service costs as well as calls on the guarantee. 

Article 5 
Preconditions for assistance under the Ukraine Support Loan 

1.  A precondition for granting the assistance under the Ukraine Support Loan shall be that 

Ukraine  continue  to  uphold  and  respect  effective  democratic  mechanisms,  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. Upholding and respecting 

the rule of law shall include the fight against corruption. 

2.  The  Commission  services  and  the  European  External  Action  Service  shall  monitor  the 

fulfilment of the precondition set out in paragraph 1, in particular before the adoption of 

the  Council  implementing  decision  referred  to  in  Article  8  and  the  release  of  funds 

referred to in Article 23. Furthermore, the monitoring shall take into account the relevant 

recommendations of international bodies, such as the Council of Europe and its Venice 

Commission. The Commission shall inform the European Parliament and the Council of 

its monitoring. 

CHAPTER II 
IMPLEMENTATION OF THE UKRAINE SUPPORT LOAN 

Article 6 
Ukrainian Financing Strategy 

1. 

In order to  receive  financial and economic  assistance under the  Ukraine  Support Loan, 

Ukraine shall submit, in principle each year, to the Commission a Ukrainian Financing 

Strategy that shall provide details on Ukraine’s financing needs and financing sources, in 

principle for the forthcoming 12 months.  

2.  The Ukrainian Financing Strategy shall contain: 

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a. 

the  main  macroeconomic  assumptions  underpinning  the  Ukrainian  Financing 

Strategy; 

b. 

information on Ukraine’s budget, per quarter and year, including: 

i. 

the  targeted  budget  balance  for  the  general  government,  broken  down  by 

subsector of general government; 

ii. 

the projections for expenditure and revenue for the general government and its 

main  subsectors,  and  their  main  components  according  to  the  economic 

classification; 

iii.  relevant  information  on  the  general  government  expenditure  by  function, 

notably on defence; 

iv.  a description and quantification of the expenditure and revenue measures to be 

included in the budget; 

v. 

an annex containing the methodology and assumptions, and any other relevant 

parameters underpinning the budgetary forecasts. 

c. 

information on Ukraine’s past and projected financial developments in the general 

government, per quarter and year, including: 

i. 

information  on  the  liquidity  situation  (cash  balance)  for  the  general 

government and its main subsectors; 

ii.  debt amortisations; 

iii.  a debt issuance strategy; 

iv.  other debt creating and reducing flows; 

v. 

the stock of payment arrears and its projected developments. 

d. 

information  on  the  implementation  of  previously  granted  assistance  under  the 

Ukraine Support Loan, including any financial recoveries thereof; 

e. 

information on projected in-kind military assistance needs; 

f. 

on the basis of Ukraine’s budget and the projected in-kind military assistance needs, 

the  expected  external  financing  needs  for  the  period  covered  by  that  Ukrainian 

Financing Strategy, including a breakdown of the amounts in that budget necessary 

for the purposes of Article 2(2)(a) and (b) of this Regulation. That breakdown shall 

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contain  the  value  of  defence  products  to  be  purchased  outside  the  Union  and 

Ukraine; 

g. 

committed  and  expected  external  financing  and  in-kind  military  assistance  at  the 

time of submission  of the Ukrainian Financing  Strategy for the period covered by 

that  Ukrainian  Financing  Strategy,  including  a  breakdown  of  the  amounts  of  that 

external financing to be used in line with the purposes of Article 2(2)(a) and (b) of 

this Regulation; 

h.  on the basis of the information in points (f) and (g) of this paragraph, the expected 

external  financing  gap  for  which  Ukraine  seeks  assistance  under  the  Ukraine 

Support  Loan  under  that  Ukrainian  Financing  Strategy,  including  a  breakdown  of 

the  amounts  of  that  expected  external  financing  gap  for  the  purposes  of  Article 

2(2)(a) and (b) of this Regulation; 

i. 

in  order  to  support  multiannual  expenditure  under  Chapter  IV  of  this  Regulation, 

information on potential multiannual needs and a corresponding budget. 

3.  Ukraine  may  submit  updated  Ukrainian  Financing  Strategies  until  such  time  as  the 

maximum  amount  of  the  Ukraine  Support  Loan  as  referred  to  in  Article  4(1)  has  been 

made accessible under the Ukraine Support Loan in accordance with Article 8. 

Article 7 
Commission’s assessment of the Ukrainian Financing Strategy 

1.  The Commission shall assess the Ukrainian Financing Strategy submitted in accordance 

with Article 6 without undue delay.  

2.  When carrying out the assessment referred to in paragraph 1, the Commission shall act in 

close  cooperation  with  Ukraine.  The  Commission  may  make  observations  or  seek 

additional  information,  including  verifying  information  with  Member  States,  third 

countries and international organisations. Ukraine shall provide any requested additional 

information and may revise the Ukrainian Financing Strategy if needed, including after 

its submission. 

3.  The  Commission  shall  assess  the  Ukrainian  Financing  Strategy  and  shall,  in  particular 

assess: 

a. 

the  completeness,  feasibility  and  coherence  of  the  Ukrainian  Financing  Strategy 

with the underlying assumptions; 

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b. 

the consistency of the information in the Ukrainian Financing Strategy with external 

sources,  including  any  recent  reviews  of  the  International  Monetary  Fund  and 

information  from  the  Ukraine  Donor  Platform  and  the  Ukraine  Defence  Contact 

Group; 

c. 

the consistency of the expected external financing gap with the following indicative 

distribution of the Ukraine Support Loan: 

i.  EUR  30  000  000  000  for  macro-financial  assistance  in  accordance  with 

Chapter  III  or  for  budget  assistance  in  the  form  of  a  loan  to  be  implemented 

under  the  Ukraine  Facility  pursuant  to  Chapter  III  of  Regulation  (EU) 

2024/792; 

ii.  EUR  60  000  000  000  to  support  Ukraine’s  defence  industrial  capacities  in 

accordance with Chapter IV. 

d. 

compliance with the precondition set out in Article 5(1). 

4.  Where the Commission gives a positive assessment of the Ukrainian Financing Strategy, 

it  shall,  without  delay,  submit  a  proposal  for  a  Council  implementing  decision  in 

accordance with Article 8. 

5.  Where the Commission gives a negative assessment of the Ukrainian Financing Strategy, 

it  shall,  without  delay,  inform  Ukraine,  giving  reasons  for  its  assessment.  A  negative 

assessment  shall  not  prevent  Ukraine  from  submitting  a  revised  Ukrainian  Financing 

Strategy. 

6.  Where  the  Commission  assesses  an  update  to  the  Ukrainian  Financing  Strategy,  the 

provisions of this Article shall apply. 

Article 8 
Council implementing decision 

1.  Where the Commission makes a positive assessment of the Ukrainian Financing Strategy 

or its update, the Commission shall submit a proposal to the Council for an implementing 

decision making the financial and economic assistance accessible. 

2.  The Council implementing decision referred to in paragraph 1 shall: 

a. 

determine the amount of assistance to be made accessible to Ukraine to assist in the 

implementation  of  the  Ukrainian  Financing  Strategy,  including  the  amount  of  that 

assistance accessible: 

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i. 

for  budget  assistance  in  the  form  of  a  loan  to  be  implemented  pursuant  to 

Chapter III of Regulation (EU) 2024/792; 

ii. 

for macro-financial assistance in accordance with Chapter III;  

iii. 

to support Ukraine’s defence industrial  capacities in accordance with Chapter 

IV. 

b. 

establish  the  maximum  number  and  indicative  value  of  instalments  for  the 

assistance accessible for macro-financial assistance in accordance with Chapter III. 

3.  The  determination  of  the  amounts  of  the  Ukraine  Support  Loan  to  be  made  accessible 

shall: 

a. 

respect  the  maximum  amount  available  for  the  Ukraine  Support  Loan  provided  in 

Article 4(1); 

b. 

take into account the need to ensure a fair burden sharing with other donors in the 

coverage of Ukraine’s financing needs. 

c. 

for  budget  assistance,  determine  to  what  extent  regular  budget  assistance  can  be 

provided  in  the  form  of  a  loan  to  be  implemented  pursuant  to  Chapter  III  of 

Regulation (EU) 2024/792 or as macro-financial assistance, as appropriate. 

4.  The  Council  shall  adopt  the  implementing  decision  referred  to  in  paragraph  1  without 

undue delay. 

Article 9 
Complementarity and coordination 

1. 

In the implementation  of the  Ukraine Support Loan, the Commission  shall act  in  close 

cooperation  with  Ukraine,  Member  States,  relevant  international  bodies  and  donors  to 

Ukraine, notably through the Ukraine Donor Platform and the Ukraine Defence Contact 

Group,  to  ensure  a  coherent  and  consistent  approach  from  those  supporting  Ukraine  to 

address Ukraine’s financial and economic assistance needs. In doing so, the Commission 

shall draw on the expertise of the European External Action Service. 

2.  Article 5, Article 7, Article 13, Article 14, Article 15 and Article 23(1)(b) shall apply in 

accordance with Decision 2010/427/EU. 

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CHAPTER III 
BUDGET ASSISTANCE IN THE FORM OF MACRO-
FINANCIAL ASSISTANCE 

Article 10 
Purpose 

1.  The macro-financial  assistance shall contribute to  covering Ukraine’s financing  gap, as 

identified in a positively assessed Ukrainian Financing Strategy.  

2.  The  release  of  the  macro-financial  assistance  shall  be  managed  by  the  Commission  on 

the  basis  of  its  assessment  of  the  precondition  referred  to  in  Article  5  and  of  the 

satisfactory  fulfilment  of  the  policy  conditions  included  in  the  memorandum  of 

understanding referred to in Article 11. 

Article 11 
Memorandum of Understanding 

1. 

In respect of the approved amounts of macro-financial assistance as referred to in Article 

8(2)(a)(ii), the Commission shall agree with Ukraine on policy conditions to which the 

macro-financial  assistance is to be linked. Those policy conditions shall be set out in  a 

memorandum of understanding (MoU).  

2.  The policy conditions shall include robust and ambitious reform commitments, including 

those that aim, in particular, at strengthening revenue mobilisation to support Ukraine’s 

financing needs and tackle the root causes of corruption in public finances, including via 

improving  the  sustainability  and  quality  of  public  expenditure  and  enhancing  the 

efficiency,  transparency  and  accountability  of  the  public  finance  management  systems. 

Where  relevant,  those  commitments  shall  be  consistent  with  any  programme  that 

Ukraine has with the IMF whilst going further where  appropriate. Progress in attaining 

the commitments shall be regularly monitored by the Commission. 

3.  The  Commission  shall  approve  the  signature  of  the  MoU  and  of  its  amendments  by 

means  of  implementing  acts.  Those  implementing  acts  shall  be  adopted  in  accordance 

with the examination procedure referred to in Article 27(3). 

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CHAPTER IV 
ASSISTANCE TO SUPPORT UKRAINE’S DEFENCE 
INDUSTRIAL CAPACITIES 

Article 12 
Purpose 

1.  The  assistance  to  support  Ukraine’s  defence  industrial  capacities  shall  aim  at  enabling 

Ukraine  to  carry  out  urgent  and  major  public  investments  in  support  of  the  Ukrainian 

defence  industry  and  its  integration  into  the  European  defence  industry  in  response  to 

and following the current crisis situation. This assistance shall contribute, in particular, to 

the reconstruction, recovery and modernisation of the Ukrainian Defence Technological 

and Industrial Base, with a view to increasing its defence industrial readiness, taking into 

account  its  gradual  future  integration  into  the  European  Defence  Technological  and 

Industrial  Base and through support for the timely  availability of defence products  and 

other  products  for  defence  purposes,  through  cooperation  between  the  Union  and 

Ukraine.  

2.  The  activities,  expenditures  and  measures  to  support  Ukraine’s  defence  industrial 

capacities shall be related to defence products or other products for defence purposes and 

shall aim to: 

a. 

speed  up  the  adjustment  of  the  Ukrainian  defence  industry  to  structural  changes, 

including through the creation and ramp-up of its manufacturing capacities as well 

as related supporting activities; 

b. 

improve  the  timely  availability  of  defence  products  or  other  products  for  defence 

purposes  for  Ukraine,  including  through  the  reduction  of  their  delivery  lead  time, 

reservation  of  manufacturing  slots  or  stockpiling  of  defence  products  or  other 

products for defence purposes, intermediate products or raw materials; or 

c. 

enhance  cross-border  cooperation  between  the  European  Defence  Technological 

and Industrial Base and the Ukrainian Defence Technological  and Industrial Base, 

taking  into  account  the  defence  industrial  reinforcement  and  defence  procurement 

needs  of  Ukraine,  allowing  for  interchangeability  of  defence  products  or  other 

products for defence purposes manufactured by the Ukrainian defence industry and 

the European defence industry. 

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Article 13 
Eligibility 

1.  Activities, expenditures and measures to support Ukraine’s defence industrial capacities 

related to defence products and other products for defence purposes shall be eligible for 

assistance provided that they comply with the eligibility conditions set out in this Article.  

2.  Defence products shall belong to one of the following categories: 

a.  category  one:  ammunition  and  missiles;  artillery  systems,  including  deep  precision 

strike  capabilities;  ground  combat  capabilities  and  their  support  systems,  including 

soldier  equipment  and  infantry  weapons;  small  drones  (NATO  class  1)  and  related 

anti-drone  systems;  critical  infrastructure  protection;  cyber;  and  military  mobility 

including counter-mobility; 

b.  category  two:  air  and  missile  defence  systems;  maritime  surface  and  underwater 

capabilities;  drones  other  than  small  drones  (NATO  class  2  and  3)  and  related  anti-

drone systems; strategic enablers such as, but not limited to, strategic airlift, air-to-air 

refuelling,  C4ISTAR  systems  as  well  as  space  assets  and  services;  space  assets 

protection; artificial intelligence and electronic warfare. 

3.  The  activities,  expenditures  and  measures  to  support  Ukraine’s  defence  industrial 

capacities  related  to  defence  products  or  other  products  for  defence  purposes  shall  not 

contravene  the  security  and  defence  interests  of  the  Union  and  its  Member  States  as 

established in the framework of the common foreign and security policy pursuant to Title 

V  of  the  Treaty  on  European  Union,  including  respect  for  the  principle  of  good 

neighbourly relations, or the objectives set out in Article 2 of this Regulation. 

4.  Defence products shall be produced in compliance with the following conditions: 

a.  Manufacturers  and  subcontractors  involved  in  the  production  shall  be  established 

and  have  their  executive  management  structures  in  the  Union,  in  an  EEA  EFTA 

State or in Ukraine. They shall not be subject to control by a third country which is 

not an EEA EFTA State or Ukraine or by another third-country entity which is not 

established in the Union, an EEA EFTA State or in Ukraine; 

b.  By  way  of  derogation  from  point  (a),  in  order  to  take  into  account  industrial 

cooperation  with  non-EU  partners,  defence  products  that  involve  a  subcontractor 

involved in the production which is allocated between 15 % and 35 % of the value 

of  the  contract,  and  that  is  not  established  or  does  not  have  its  executive 

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management structures in the Union, EEA EFTA State or Ukraine, shall be eligible 

providing that at least one of the following conditions are met: 

i. 

a  direct  contractual  relationship  related  to  the  defence  product  has  been 

established  between  the  manufacturer  and  that  subcontractor  prior  to  28  May 

2025; 

ii. 

the  manufacturer  commits  to  studying,  within  two  years,  the  feasibility  of 

replacing  the  input  provided  by  that  subcontractor  with  an  alternative, 

restriction-free  input  originating  in  the  Union,  EEA  EFTA  States  or  Ukraine, 

and meeting technical and time requirements. 

c.  By way of derogation from point (a), defence products involving manufacturers or 

subcontractors established in the Union and controlled by another third country or 

by another third-country entity which is not an EEA EFTA State or Ukraine shall be 

eligible  if  this  manufacturer  or  subcontractor  has  been  subject  to  screening  within 

the  meaning  of  Regulation  (EU)  2019/452  and,  where  necessary,  to  appropriate 

mitigation measures, or if this manufacturer provides guarantees in accordance with 

point (d) verified by the Member State in which it is established; 

d.  The  guarantees  referred  to  in  point  (c)  of  this  paragraph  shall  provide  assurances 

that the involvement of the manufacturer or subcontractor in the production of the 

defence product does not contravene the security and defence interests of the Union 

and its Member States as established in the framework of the common foreign and 

security  policy  pursuant  to  Title  V  of  the  Treaty  on  European  Union.  Those 

guarantees  shall  in  particular  substantiate  that,  for  the  purposes  of  activities, 

expenditures and measures, measures are in place to ensure that: 

i. 

control  over  the  manufacturer  or  subcontractor  is  not  exercised  in  a  manner 

that restrains or restricts its ability to carry out the activities, expenditures and 

measures supported; and 

ii. 

access  by a non-associated third country or by a non-associated third-country 

entity  to  classified  or  sensitive  information  relating  to  the  defence  product 

produced  is  prevented  and  the  employees  or  other  persons  involved  in  the 

production of the defence product have national security clearance issued by a 

Member  State,  where  appropriate,  in  accordance  with  national  laws  and 

regulations. 

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e.  The  infrastructure,  facilities,  assets  and  resources  of  the  manufacturers  and 

subcontractors  involved  in  the  production  shall  be  located  in  the  territory  of  a 

Member  State,  an  EEA  EFTA  State  or  Ukraine.  Where  manufacturers  or 

subcontractors involved in the production have no readily available alternatives or 

relevant infrastructure, facilities, assets and resources in the territory of a Member 

State, an EEA EFTA State or Ukraine, they may use their infrastructure, facilities, 

assets  and  resources  which  are  located  or  held  outside  those  territories,  provided 

that  such  use  does  not  contravene  the  security  and  defence  interests  of  the  Union 

and its Member States; 

f.  Manufacturers and subcontractors involved in the production may be considered to 

fulfil the eligibility conditions referred to in this paragraph where they have fulfilled 

equivalent conditions under Regulations (EU) 2018/109229, (EU) 2021/69730, (EU) 

2023/152531, or (EU) 2023/241832 of the European Parliament and of the Council or 

under  Regulation  (EU)  2025/1106  and  provided  that  no  subsequent  changes  call 

into question the fulfilment of those conditions; 

g.  The  cost  of  components  originating  outside  the  Union,  EEA  EFTA  States  and 

Ukraine shall not be higher than 35 % of the estimated cost of the components of 

the  defence  product.  No  component  shall  be  sourced  from  a  third  country  that 

contravenes the security and defence interests of the Union and its Member States; 

h.  For  defence  products  related  to  category  two  as  referred  to  in  paragraph  2  of  this 

Article, manufacturers shall have the ability to decide, without restrictions imposed 

by  third  countries  or  by  third-country  entities,  on  the  definition,  adaptation  and 

evolution  of  the  design  of  the  defence  product  procured,  including  the  legal 

29 

30 

31 

32 

Regulation (EU) 2018/1092 of the European Parliament and of the Council of 18 July 2018 establishing 
the  European  Defence  Industrial  Development  Programme  aiming  at  supporting  the  competitiveness 
and  innovation  capacity  of  the  Union’s  defence  industry  (OJ  L  200,  7.8.2018,  p.  30,  ELI: 
http://data.europa.eu/eli/reg/2018/1092/oj). 
Regulation (EU) 2021/697 of the European Parliament and of the Council of 29 April 2021 establishing 
the  European  Defence  Fund and repealing  Regulation  (EU)  2018/1092  (OJ  L  170,  12.5.2021,  p. 149, 
ELI: http://data.europa.eu/eli/reg/2021/697/oj). 
Regulation  (EU)  2023/1525  of  the  European  Parliament  and  of  the  Council  of  20  July  2023  on 
supporting 
7,  ELI: 
http://data.europa.eu/eli/reg/2023/1525/oj). 
Regulation  (EU)  2023/2418  of  the  European  Parliament  and  of  the  Council  of  18  October  2023  on 
establishing  an  instrument  for  the  reinforcement  of  the  European  defence  industry  through  common 
procurement (EDIRPA) (OJ L, 2023/2418, 26.10.2023, ELI: http://data.europa.eu/eli/reg/2023/2418/oj). 

ammunition 

production 

24.7.2023, 

(OJ  L 

(ASAP) 

185, 

p. 

EN 

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authority to substitute or remove components that are subject to restrictions imposed 

by third countries or by third-country entities; 

i. 

For  the  purposes  of  this  paragraph,  ‘subcontractors  involved  in  the  production’ 

means any legal entity which provides critical inputs that possess unique attributes 

essential  for  the  functioning  of  a  product,  which  is  allocated  at  least  15  %  of  the 

value  of  the  contract,  and  which  needs  access  to  classified  information  for  the 

performance of the contract. 

5.  By way of derogation from paragraphs 2 and 4 and in full respect of paragraph 3, where 

there  is  an  urgent  need  for  a  given  defence  product  stemming  from  Russia’s  war  of 

aggression  against  Ukraine,  the  procurement  of  a  defence  product  which  does  not 

comply with one or more of the conditions set out in paragraphs 2 and 4 shall be eligible 

for financial assistance under this chapter provided that:  

a. 

there is no equivalent product that responds to that urgent need which complies with 

the  conditions  set  out  in  paragraphs  2  and  4  or  it  is  not  available  at  the  required 

scale; or 

b. 

the delivery lead time for such a product is significantly shorter than for a product 

which would comply with the conditions set out in paragraphs 2 and 4, even if this 

product were subject to a priority rated request as referred to in Article 19. 

In  such  a  case,  Ukraine  shall  provide  the  information  reasonably  available  to  it 

demonstrating  that  the  conditions  for  the  application  of  this  derogation  are  met  to  be 

checked  by  the  Commission  without  undue  delay.  In  the  context  of  point  (b),  that 

information  shall  include  a  formal  commitment  on  compliance  with  the  delivery  lead 

time. 

The procurement of defence products from manufacturers established in third countries 

shall be made only where there are no other alternatives available in the Union under the 

circumstances described in points (a) and (b). 

The Commission shall approve such derogations by means of implementing acts, acting 

in accordance with the examination procedure referred to in Article 27(3). 

6.  Where  applicable,  Participating  Member  States  shall  ensure  that  the  procurement 

procedures  and  contracts  for  other  products  for  defence  purposes  resulting  from 

procurements  receiving  support  under  the  Ukraine  Support  Loan  contain  appropriate 

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eligibility  conditions  to  protect  the  security  and  defence  interests  of  the  Union  and  its 

Member States. 

7.  By  way  of  derogation  from  paragraph  4,  contributions  in  accordance  with  point  (e)  of 

paragraph 8 of this Article shall be utilised in line with the eligibility conditions of the 

respective Union programme. 

8.  Activities, expenditures  and measures related to  defence products  or other products  for 

defence  purposes  shall  be  implemented  within  one  of  the  following  methods  of 

implementation: 

a. 

procurements by Ukraine, subject to the procurement and delivery being validated 

by the Commission or Participating Member States. Ukraine shall be responsible for 

such  procurements  in  accordance  with  Ukrainian  law,  where  validations  by  the 

Commission or Participating Member States shall include on a sample basis checks 

on  contractual  documentation, 

invoices  and  delivery  certificates,  physical 

inspections to suppliers and physical verification of deliveries; 

b.  procurements  by  Ukraine  that  are  a  common  procurement  in  accordance  with 

Regulation (EU) 2025/1106; 

c. 

agreements between Ukraine and Member States or the European Defence Agency;  

d.  procurement  agreements  between  Ukraine  and  international  or  intergovernmental 

organisations; 

e. 

contributions  by  Ukraine  to  the  Ukraine  Support  Instrument  established  by  [EDIP 

Regulation],  the  Ukraine  Investment  Framework  established  by  Regulation  (EU) 

2024/792 for dual-use goods or other Union programmes. 

Activities, expenditures and measures related to other products for defence purposes may 

also  be  implemented  by  procurements  by  Ukraine  for  procurements  below  EUR  7  000 

000,  provided  that  sound  financial  management  and  the  protection  of  the  financial 

interest of the Union are ensured. 

9.  Contracts entered into by Ukraine relating to procurements, agreements or contributions 

referred to in paragraph 8 shall be eligible if signed after 14 January 2025 provided that 

they comply with the requirements set out in this Article. 

10.  The Commission shall be empowered to adopt a delegated act in accordance with Article 

26  to  supplement  this  Regulation  by  extending  eligibility  criteria  to  include  third 

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countries other than EEA EFTA States and Ukraine that do not contravene the security 

and defence interests of the Union and its Member States, provided  that such countries 

have concluded an agreement with the Union in accordance with Article 17 of Council 

Regulation 2025/1106. 

Article 14 
Product schedules 

1. 

In respect of the approved amounts of assistance to support Ukraine’s defence industrial 

capacities as referred to in Article 8(2)(a)(iii), Ukraine shall draw up a schedule for each 

activity, expenditure or measure related to a defence product or other product for defence 

purposes for which it intends to request assistance. That schedule shall set out: 

a. 

a description of the defence product or other product for defence purposes; 

b. 

information on compliance with Article 13. 

2.  Ukraine  shall  consult  the  schedule  with  the  Commission  with  a  view  of  ensuring 

compliance  with  Article  13.  In  determining  whether  an  alternative  method  of 

implementation  is  more  economical  or  when  considering  the  prices  available,  the 

Commission  shall  take  into  consideration  any  co-financing  that  is  to  be  provided  by 

Member  States.  When  proposing  to  Ukraine  the  most  appropriate  method  of 

implementation, the Commission shall take into consideration the timeliness of delivery 

of  the  relevant  product,  activity,  expenditure  or  measure,  the  prices  available,  the  past 

experience  with  that  method  of  implementation  and,  where  warranted,  past  experience 

with manufacturers under that method of implementation. Should Ukraine not identify a 

method  of  implementation  in  accordance  with  Article  13(8)  or  should  the  Commission 

consider  that  an  alternative  method  of  implementation  is  more  economical,  efficient  or 

effective, the Commission may propose a method of implementation to Ukraine. 

3.  By derogation from paragraph 1, Ukraine shall not be required to draw up a schedule for 

implementation in accordance with Article 13(8)(e). 

Article 15 
Ukraine’s Defence Industrial Capacities Expert Group 

1.  To  support  the  implementation  of  assistance  to  support  Ukraine’s  defence  industrial 

capacities,  the  Commission  shall  establish  the  Ukraine’s  Defence  Industrial  Capacities 

Expert Group.  

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2. 

In  addition  to  representatives  of  the  Commission  services  and  the  European  External 

Action Service, the Ukraine’s Defence Industrial Capacities Expert Group shall include 

representatives of Participating Member States and EEA EFTA States. Ukraine shall be 

invited to the meetings of the Ukraine’s Defence Industrial Capacities Expert Group as 

appropriate. 

3.  The  Ukraine’s  Defence  Industrial  Capacities  Expert  Group  shall  provide  advice, 

expertise and support on the defence products and other products for defence purposes, 

as well as on the method of implementation.  

Article 16 
Administration of the assistance to support Ukraine’s defence industrial capacities 

Ukraine shall open a special account for the sole purpose of the management of the financial 
and  economic  assistance  received  to  support  Ukraine’s  defence  industrial  capacities.  In 
relation to this account: 

a. 

all  payments  of  the  contracts  or  agreements  that  are  requested  for  assistance  to 

support Ukraine’s defence industrial capacities shall be paid from this account; 

b. 

the Commission shall be granted monitoring rights of this account; 

c.  Ukraine  shall  provide  the  Commission  with  a  monthly  report,  to  be  submitted 

within  10  working  days  of  the  end  of  each  month,  containing  the  following 

information: 

i. 

the  date  and  amount  of  each  payment  made  from  the  account  during  the 

preceding month;  

ii. 

the name of the recipient of each payment;  

iii.  a description of the purpose of each payment and how it relates to the contracts 

or agreements submitted in requests for funds;  

iv.  any other information as may be reasonably requested by the Commission. 

Article 17 
Monitoring of implementation 

1.  The  Commission  shall  monitor  the  implementation  of  assistance  to  support  Ukraine’s 

defence  industrial  capacities,  notably  including  the  delivery  of  products,  in  accordance 

with this Article.  

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2.  For  procurements  by  Ukraine  in  accordance  with  Article  13(8),  point  (a),  that  are 

validated by the Commission, the Commission shall utilise the validation process therein.  

3.  For  procurements  by  Ukraine  in  accordance  with  Article  13(8),  point  (a),  that  are 

validated by Participating Member States, the Participating Member State shall monitor 

the  implementation  of  the  procurement  and  the  delivery  in  accordance  with  that 

provision and report to the Commission. 

4.  For  procurements  by  Ukraine  in  accordance  with  Article  13(8),  point  (b),  the 

Participating Member States that are part of such a common procurement shall monitor 

the implementation of the procurement and the delivery and report to the Commission. 

Where  in  the  context  of  a  common  procurement  under  Regulation  (EU)  2025/1106  a 

Non-Participating Member State agrees to be bound by and to apply the eligibility rules 

set  out  in this Regulation,  ensures the protection of the financial interests of the Union 

and is the contracting authority which acts on behalf of the other countries, Ukraine shall 

require  as  a  condition  of  its  participation  that  the  Non-Participating  Member  State 

monitors  the  implementation  of  the  procurement  and  the  delivery  and  report  to  the 

Commission. 

5.  For  agreements  between  Ukraine  and  Participating  Member  States  in  accordance  with 

Article 13(8), point (c), the Participating Member State shall monitor the implementation 

of  the  agreement  and  the  delivery  and  report  to  the  Commission.  For  agreements 

between Ukraine and Non-Participating Member States in accordance with Article 13(8), 

point  (c),  Ukraine  shall  include  in  such  agreements  obligations  on  the  respective  Non-

Participating  Member  State  to  be  bound  by  and  to  apply  the  eligibility  rules  set  out  in 

this  Regulation,  to  ensure  the  protection  of  the  financial  interests  of  the  Union  and  to 

monitor  the  implementation  of  the  agreement  and  the  delivery  and  report  to  the 

Commission. 

6.  For agreements between Ukraine and the European Defence Agency in accordance with 

Article 13(8), point (c), the European Defence Agency shall monitor the implementation 

of the agreement and the delivery and report to the Commission. 

7.  For  procurement  agreements  between  Ukraine  and  international  or  intergovernmental 

organisations in accordance with Article 13(8), point (d), Ukraine shall include in such 

procurement agreements obligations on the respective international or intergovernmental 

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organisations to monitor the implementation of the procurement and the delivery and to 

report to the Commission. 

8.  Paragraphs 1 to 7 shall not apply to procurements by Ukraine in accordance with Article 

13(8)  regarding  activities,  expenditures  and  measures  related  to  other  products  for 

defence purposes below EUR 7 000 000. However, Ukraine shall regularly report to the 

Commission on how it monitors the implementation of these procurements and delivery. 

The Commission shall undertake risk-based controls. 

9.  Should the Commission be notified by Ukraine of the non-implementation of a contract 

in  accordance  with  Article  20(2),  point  (g),  or  become  aware  of  the  non-delivery  of 

products under this Article or the non-use of funds in the account referred to in Article 

16, the Commission  shall engage with  Ukraine to repurpose those  funds  in  accordance 

with the provisions of this Regulation. 

Article 18 
Modification of framework agreements or contracts 

1.  Where activities, expenditures and measures related to defence products are implemented 

through the methods referred to in paragraph 8(b) or (c) of Article 13 within the Union, 

the  rules  provided  for  in  paragraphs  2  to  4  shall  apply  to  an  existing  framework 

agreement  or  contract  that  has  as  its  object  the  purchase  of  defence  products,  which  is 

used  in  that  implementation  method,  and  which  does  not  provide  for  the  possibility  to 

substantially amend it. When applying paragraphs 2 and 3, the contracting authority that 

concluded the framework agreement or contract  shall obtain the prior agreement of the 

undertaking with which it has concluded that framework agreement or contract. 

2.  A  contracting  authority  of  a  Participating  Member  State  may  modify  an  existing 

framework agreement or contract for defence products, where that framework agreement 

or contract has been concluded with an undertaking complying with criteria equivalent to 

those laid down in Article 13(4) and (5) of this Regulation, in order to add Ukraine as a 

party to that framework agreement or contract.  

3.  By way of derogation from Article 29(2), third subparagraph, of Directive 2009/81/EC, a 

contracting authority of a Participating Member State may make substantial amendments 

to the quantities set out in a framework agreement or contract, with an estimated value 

above  the  thresholds  laid  down  in  Article  8  of  Directive  2009/81/EC,  where  that 

framework agreement or contract has been concluded with an undertaking that complies 

EN 

30 

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with  criteria  equivalent  to  those  laid  down  in  Article  13(4)  and  (5)  of  this  Regulation, 

and insofar as the modification is strictly necessary for the application of paragraph 2 of 

this Article. 

4.  For  the  purpose  of  calculating  the  value  referred  to  in  paragraph  3,  the  updated  value 

shall be the reference point when the contract includes an indexation clause. 

5.  A  contracting  authority  which  has  modified  a  framework  agreement  or  contract  in  the 

cases referred to in paragraph 2 or 3 of this Article shall publish a notice to that effect in 

the  Official  Journal  of  the  European  Union  in  accordance  with  Article  32  of  Directive 

2009/81/EC. 

6. 

In  the  cases  referred  to  in  paragraphs  2  and  3,  the  principle  of  equal  rights  and 

obligations  shall  apply  between  the  contracting  authorities  which  are  party  to  the 

framework agreement or contract, in particular regarding the cost of additional quantities 

procured. 

Article 19 
Voluntary prioritisation of defence products 

1.  For  the  sole  purpose  of  this  Regulation  and  where  Ukraine  is  confronted  with  severe 

difficulties  in  the  placing  or  in  the  execution  of  a  contract  for  the  supply  of  defence 

products that are urgently needed and meet the eligibility requirements set out in Article 

13(4) or (5), an economic operator together with the Participating Member State on the 

territory  of  which  its  production  site  is  located  may  jointly  submit  a  request  to  the 

Commission to issue a prioritisation measure to prioritise a certain order of such products 

manufactured by that economic operator.  

2.  The joint request referred to in paragraph 1 shall include the following elements: 

a.  The initial request from Ukraine; 

b.  The list of products to be subject to the prioritisation measure, their specifications 

and the quantities in which they are to be supplied; 

c.  The time limits within which the delivery of these products is to be completed; 

d.  Evidence that the economic operator cannot meet the request from Ukraine referred 

to in point (a) without a prioritisation measure; 

e.  An  indication  of  a  fair  and  reasonable  price  at  which  the  prioritisation  measure 

could be placed as well as elements substantiating that price. 

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3.  Upon reception of a request as referred to in paragraph 1, the Commission shall assess 

that request without undue delay.  

4.  The  Commission  shall  base  its  assessment  referred  to  in  paragraph  3  on  objective, 

factual,  measurable  and  substantiated  data,  with  the  aim  of  determining  whether  such 

prioritisation  is  indispensable  in  order  to  address  the  severe  difficulties  referred  to  in 

paragraph 1. 

5.  Where  the  assessment  referred  to  in  paragraph  3  concludes  that  the  prioritisation  is 

indispensable,  the  Commission,  by  means  of  an  implementing  act,  shall  adopt  a 

prioritisation measure setting out: 

a. 

the  legal  basis  of  the  priority-rated  request  to  be  complied  with  by  the  economic 

operator; 

b. 

the list of products subject to the priority-rated request, their specifications and the 

quantities in which they are to be supplied; 

c. 

the time limits within which the priority-rated request is to be completed; 

d. 

the beneficiaries of the priority-rated request; 

e. 

the scope of contractual obligations over which the priority-rated request shall have 

precedence; 

f. 

the waiver of contractual liability under the conditions laid down in paragraph 7 of 

this Article; and 

g. 

the penalties provided for in paragraphs 12 to 18 of this Article for non-compliance 

with the obligations stemming from that implementing act. 

The implementing act referred to in the first subparagraph of this paragraph shall be 

adopted in accordance with the examination procedure referred to in Article 27(3). 

6.  The prioritisation measure referred to in paragraph 5 shall:  

a. 

be  placed  at  a  fair  and  reasonable  price,  adequately  taking  into  account  the 

economic operator’s opportunity costs when fulfilling the prioritisation measure as 

compared to existing contractual obligations; and  

b. 

take precedence over any contractual obligations under private or public law related 

to  the  defence  products  subject  to  the  prioritisation  measure,  under  the  conditions 

laid down in the implementing act referred to in paragraph 5. 

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7.  The economic operator subject to a prioritisation measure pursuant to paragraph 5 shall 

not  be  liable  for  any  breach  of  contractual  obligation  that  is  governed  by  the  law  of  a 

Participating Member State, provided that: 

a. 

the  breach  of  contractual  obligation  is  strictly  necessary  for  compliance  with  the 

required prioritisation; 

b. 

the implementing act referred to in paragraph 5 has been complied with; and 

c. 

the  request  referred  to  in  paragraph  1  did  not  have  the  sole  purpose  of  unduly 

avoiding a prior performance obligation under private or public law. 

8.  The economic operator subject to a prioritisation measure may request the Commission 

to modify the implementing act referred to in paragraph 5 where it considers it to be duly 

justified based on one of the following grounds: 

a. 

the economic operator is unable to perform the prioritisation measure on account of 

insufficient  production  capability  or  production  capacity,  even  under  preferential 

treatment of the request; 

b. 

completion  of  the  prioritisation  measure  would  place  an  unreasonable  economic 

burden on, and entail particular hardship for, the economic operator. 

9.  The economic operator shall provide all relevant and substantiated information to allow 

the  Commission  to  assess  the  merits  of  the  request  for  modification  referred  to  in 

paragraph 8. 

10.  Based  on  the  examination  of  the  reasons  and  evidence  provided  by  the  economic 

operator,  the  Commission  may,  after  consultation  and  prior  agreement  of  the 

Participating Member State on the territory of which the relevant production site of the 

economic operator concerned is located, amend its implementing act to release, partially 

or in totality, the economic operator concerned from its obligations under this Article. 

11.  Where  an  economic  operator,  after  having  expressly  accepted  to  prioritise  the  orders 

requested by the Commission, intentionally or through gross negligence does not comply 

with  the  obligation  to  prioritise  those  orders,  it  shall  be  subject  to  fines  set  out  in 

paragraphs 12 to 18 of this Article, except where: 

a. 

the economic operator is unable to perform the priority-rated request on account of 

insufficient  production  capability  or  production  capacity,  or  on  technical  grounds; 

or 

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b.  performance  or  completion  of  the  request  would  place  an  unreasonable  economic 

burden  on,  and  entail  particular  hardship  for,  the  economic  operator,  including 

substantial risks relating to business continuity. 

The  revenue  from  the  fines  shall  constitute  external  assigned  revenue  within  the 

meaning of Article 21(5) of the Regulation (EU, Euratom) 2024/2509 to an external 

assistance programme under which Ukraine is eligible. 

12.  Where  it  deems  it  to  be  necessary  and  proportionate,  the  Commission  may,  by  way  of 

implementing acts, impose on the economic operators fines not exceeding EUR 300 000 

where the economic operator, intentionally or through gross negligence, does not comply 

with the obligation to perform the priority-rated request pursuant to this Article.  

The  implementing  acts  referred  to  in  the  first  subparagraph  of  this  paragraph  shall  be 

adopted in accordance with the examination procedure referred to in Article 27(3). 

13.  Before  taking  a  decision  pursuant  to  paragraph  12,  the  Commission  shall  provide  an 

opportunity  for  the  economic  operator  concerned  to  be  heard  in  accordance  with 

paragraph  15.  The  Commission  shall  take  into  account  any  duly  reasoned  justification 

presented  by  the  economic  operator  for  the  purpose  of  determining  whether  fines  are 

deemed necessary and proportionate. 

14.  In fixing the amount of the fine, the Commission shall take into consideration the nature, 

gravity  and  duration  of  the  infringement,  including  whether  the  economic  operator  has 

partially complied with the priority-rated order or the priority-rated request. 

15.  Before adopting a decision pursuant to paragraph  12, the Commission shall ensure that 

the  economic  operators  concerned  have  been  given  the  opportunity  to  submit 

observations on: 

a. 

the  preliminary  findings  of  the  Commission,  including  any  matter  in  relation  to 

which the Commission has raised objections; 

b. 

the  measures  that  the  Commission  may  intend  to  take  in  view  of  the  preliminary 

findings pursuant to point (a) of this paragraph. 

16.  The economic operators concerned may submit to the Commission their observations on 

the  Commission’s  preliminary  findings  within  a  time  limit  which  shall be  fixed  by  the 

Commission  in  its  preliminary  findings,  and  which  may  not  be  less  than  14  working 

days. 

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17.  The  Commission  shall  base  its  imposition  of  fines  only  on  objections  on  which  the 

economic operators concerned have been able to comment. 

18.  Where  the  Commission  has  informed  the  economic  operators  concerned  of  its 

preliminary findings as referred to in paragraph 15, it shall give access, if so requested, 

to  the  Commission's  file  under  the  terms  of  a  negotiated  disclosure,  subject  to  the 

legitimate interest of economic operators in the protection of their business secrets, or in 

order  to  preserve  business  secrets  or  other  confidential  information  of  any  person.  The 

right  of  access  to  the  file  shall  not  extend  to  confidential  information  and  internal 

documents of the Commission or the authorities of the  Participating Member States, in 

particular  to  correspondence  between  the  Commission  and  the  authorities  of  the 

Participating  Member  States.  Nothing  in  this  paragraph  shall  prevent  the  Commission 

from disclosing and using information necessary to prove an infringement. 

19.  This  Article  is  without  prejudice  to  the  rights  of  the  Participating  Member  States  to 

protect their essential security interests in accordance with Article 346(1)(b) TFEU. 

CHAPTER V  
FINANCING AND IMPLEMENTATION 

Article 20 
Ukraine Support Loan Agreement 

1.  The  detailed  financial  terms  of  the  Ukraine  Support  Loan  shall  be  laid  down  in  the 

Ukraine Support Loan Agreement.  

2. 

In  addition  to  the  elements  laid  down  in  Article  223(4)  of  Regulation  (EU,  Euratom) 

2024/2509, the Ukraine Support Loan Agreement shall require that: 

(a) 

the  Ukraine  Support  Loan  shall  be  a  limited  recourse  loan  that  shall  become 
due  and  payable  upon  the  occurrence  of  a  repayment  trigger  as  defined  in 
subparagraph (j); 

(b)  Ukraine shall provide the Union a security interest over its claim on Russia for 
reparations as security for the Ukraine Support Loan. The value of that security 
interest shall at any given time be equal to the value of disbursed funds under 
the Ukraine Support Loan; 

(c) 

(d) 

the  rights,  responsibilities  and  obligation  provided  for  in  the  framework 
agreement  under  the  Ukraine  Facility  referred  to  in  Article  9  of  Regulation 
(EU) 2024/792 apply  to  this  Ukraine Support Loan Agreement and the funds 
therein; 

the amount of assistance referred to in Article 8(2)(a)(i) shall be implemented 
in  accordance  with  Chapter  III  of  Regulation  (EU)  2024/792,  with  the 
exception  of  rules  on  the  duration  and  repayment  of  the  loan,  including 

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borrowing  cost  subsidy,  which  shall  be  governed  by  the  rules  of  this 
Regulation; 

(e)  Ukraine utilises the same management and control systems as proposed in the 
Ukraine  Plan  established  under  Regulation  (EU)  2024/792,  including  beyond 
the availability period referred to in Article 6(2) in that Regulation; 

(f) 

the Commission have the right to monitor activities, expenditures and measures 
under  Chapter  IV  of  this  Regulation  that  are  carried  out  by  the  Ukrainian 
authorities, along the whole project cycle; 

(g)  Ukraine  immediately  notify  the  Commission  should  a  draft  contract  or 
agreement financed through the Ukraine Support Loan not be implemented; 

(h)  Ukraine continues to respect the precondition set out in Article 5(1); 

(i)  Ukraine  does  not  reverse  any  measure  taken  under  any  other  current  or 
previous instruments of support provided by the Union or IMF concerning anti-
corruption; 

(j)  Ukraine  shall  be  liable  for  the  repayment  of  the  principal  of  the  Ukraine 
Support Loan within  30 days, if any of the following conditions  are fulfilled, 
each constituting a repayment trigger for the purposes of this Regulation:  

the receipt of cash by Ukraine for war reparations, indemnities or any 

i. 
financial settlement from Russia, up to the amount of such settlement; or 

90  days  from  the  receipt  of  non-monetary  assets  by  Ukraine  for  war 
ii. 
reparations,  indemnities  or  any  financial  settlement  from  Russia,  except 
territory, up to the amount of such settlement which shall be determined by an 
independent valuation. Upon request of Ukraine, the Commission may grant an 
extension of this timeframe if strictly warranted; or 

iii. 

that Ukraine is in breach of subparagraph (h); or 

iv. 
it  has  been  established  that,  in  relation  to  the  management  of  the 
Ukraine Support Loan, Ukraine has engaged in any act of fraud, corruption or 
any other illegal activity detrimental to the financial interests of the Union. 

(k)  Ukraine is liable to repay the Ukraine Support Loan: 

i. 
in the event of subparagraph (j), points (i) and (ii), for an amount of the 
monetary value of the war reparations, indemnities or any financial settlement 
from Russia equal to the proportion of the  Ukraine Support Loan outstanding 
against  the  sum  of  the  value  of  the  Ukraine  Support  Loan  outstanding,  any 
outstanding  reparations  loans  provided  by  G7  members  and  any  outstanding 
liabilities under ERA Loans; 

in  the  event  of  subparagraph  (j),  point  (iii),  for  the  total  outstanding 

ii. 
amount of the Ukraine Support Loan; 

iii. 
in  the  event  of  subparagraph  (j),  point  (iv),  for  the  value  of  fraud, 
corruption or any other illegal activity detrimental to the financial interests of 
the Union. 

(l) 

any amounts of the Ukraine Support Loan not covered by the liability referred 
to  in  subparagraph  (k)  shall  remain  in  place  until  future  repayment  trigger 
events occur; 

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(m) 

(n) 

in case of payments or recoveries, Ukraine shall indicate the relevant payments 
from the Ukraine Support Loan that are being repaid or recovered; 

the  Union  have  the  right  to  make  use  of  Russian  assets  immobilised  in  the 
Union to repay the loan, in full accordance with Union and international law; 

(o)  Ukraine  shall  ensure  that  the  procurement  procedures  and  contracts  for  other 
products  for  defence  purpose  resulting  from  procurement  receiving  support 
under  the  Ukraine  Support  Loan  contain  appropriate  eligibility  conditions  to 
protect the security and defence interests of the Union and its Member States. 

The  Ukraine  Support  Loan  Agreement  shall  also  include  any  other  requirements 
needed  for  the  implementation  of  the  Ukraine  Support  Loan,  including  those 
necessary to implement Article 17 of this Regulation. 

3.  Non-compliance with the terms of the Ukraine Support Loan Agreement shall constitute 

a ground for the Commission to suspend or cancel, in full or in part, the release of the 

instalment  or  tranches.  Non-compliance  with  repayment  terms  of  the  Ukraine  Support 

Loan  Agreement  shall  additionally  constitute  a  ground  for  the  total  or  part  of  the 

outstanding amount of the Ukraine Support Loan to become due and payable. 

4.  The  Ukraine  Support  Loan  Agreement  shall  be  made  available,  upon  request, 

simultaneously to the European Parliament and to the Council. 

Article 21 
Request for funds 

1.  To receive financial and economic assistance, Ukraine shall submit to the Commission a 

duly justified request for funds. Such a request for funds may be submitted by Ukraine to 

the  Commission,  in  principle,  six  times  a  year.  For  budget  assistance  in  the  form  of  a 

loan to be implemented pursuant to Chapter III of Regulation (EU) 2024/792, the request 

for  funds  shall  be  submitted  in  accordance  with  Chapter  III  of  Regulation  (EU) 

2024/792. 

2.  For macro-financial assistance, the request for funds shall be accompanied by a report in 

accordance with the provisions of the MoU. 

3.  For assistance to support Ukraine’s defence industrial capacities: 

(a) 
the request for funds may cover multiple products. For each covered product, 
the request for funds shall contain a contract or agreement in compliance with Article 
13 and a schedule in accordance with Article 14. Such contracts or agreements may 
be signed or in a finalised draft form; 

(b) 
if the request for funds requests funding for an amount greater than 20% of the 
amount  made  accessible  in  accordance  with  the  Council  implementing  decision 
referred  to  in  Article  8,  Ukraine  shall  provide  a  detailed  justification,  including  on 
the impact for future requests for funds under that decision. 

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Article 22 

Borrowing costs subsidy 

1.  By  way  of  derogation  from  Article  223(4),  point  (e),  of  Regulation  (EU,  Euratom) 

2024/2509 and subject to available resources, the Union may bear the costs arising from 

the  borrowing  for  a  loan  to  Ukraine  that  would  otherwise  be  borne  by  Ukraine 

(‘borrowing costs subsidy’). These costs comprise service costs (cost of funding, cost of 

liquidity  management,  and  cost  of  service  for  administrative  overheads  related  to  the 

borrowing and lending). 

2.  Ukraine may request  the borrowing costs subsidy referred to  in  paragraph 1 each year. 

The Commission may award the borrowing costs subsidy for an amount not  exceeding 

the limits of the appropriations made available in the context of the budgetary procedure. 

Article 23 

Decision on the release of assistance  

1.  The Commission shall decide on the release of assistance subject to its assessment of the 

following requirements: 

(a) 

for macro-financial assistance: 

i. 

compliance with the precondition set out in Article 5(1);  

the satisfactory  fulfilment of the policy conditions set out in the MoU 

ii. 
referred to in Article 11; and 

compliance  with  the  Ukraine  Support  Loan  Agreement  referred  to  in 

iii. 
Article 20. 

(b) 

for assistance to support Ukraine’s defence industrial capacities: 

i. 

compliance with the precondition set out in Article 5(1); 

ii. 
confirmation  that  the  contracts  or  agreements  are  for  products  in 
compliance  with  Article  13  and  that  the  Commission  does  not  object  to  the 
methods of implementation;  

confirmation 

iii. 
the  qualitative  and 
that  Ukraine  broadly  respects 
quantitative  steps  contained  in  the  Annex  to  Implementing  Decision  (EU) 
2024/1447 and any amendments thereto;  

compliance  with  the  obligations  referred  to  in  Article  16  and  the 

iv. 
Ukraine Support Loan Agreement referred to in Article 20; and 

to  the  extent  necessary,  the  adequacy  of  the  detailed  justification  of 
v. 
Ukraine,  taking  into  account  the  situation  in  Ukraine  and  the  committed  and 
expected external financing available. 

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For budget assistance in the form of a loan to be implemented pursuant to Chapter III of 

Regulation (EU) 2024/792, the release of assistance shall be implemented in accordance 

with Chapter III of Regulation (EU) 2024/792. 

2.  Subject  to  compliance  with  the  amount  of  assistance  accessible  provided  for  in  the 

Council  implementing  decision  adopted  in  accordance  with  Article  8,  where  the 

Commission makes a positive assessment of the request for funds, it shall adopt, without 

undue delay, a decision authorising the disbursement of the Ukraine Support Loan. For 

assistance to support Ukraine’s defence industrial capacities, that amount to be disbursed 

shall  be  equal  to  the  value  of  the  contracts  or  agreements  included  in  the  request  for 

funds. 

3.  The Commission may proceed with the decision referred to in paragraph 2 for points (a) 

and (b) under paragraph 1 collectively or individually. 

4.  Where  the  Commission  gives  a  negative  assessment  to  the  request  for  funds,  it  shall, 

without  undue  delay,  inform  Ukraine,  giving  reasons  for  its  assessment.  A  negative 

assessment shall not prevent Ukraine from submitting a new request for funds. 

Article 24 
Financing of the Ukraine Support Loan 

1. 

In order to finance the assistance under the Ukraine Support Loan, the Commission shall 

be  empowered,  on  behalf  of  the  Union,  to  borrow  the  necessary  funds  on  the  capital 

markets or from financial institutions under the diversified funding strategy referred to in 

Article 224 of Regulation (EU, Euratom) 2024/2509. 

2.  The borrowing and lending operations for the Ukraine Support Loan shall be carried out 

in euro. 

3.  By way of derogation from Article 31(3), second sentence, of Regulation (EU) 2021/947, 

the financial assistance provided to Ukraine under the Ukraine Support Loan shall not be 

supported  by  the  External  Action  Guarantee.  No  provisioning  for  the  Ukraine  Support 

Loan shall be constituted and, by way of derogation from Article 214(1) of Regulation 

(EU, Euratom) 2024/2509, no provisioning rate shall be set. 

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Article 25 
Application of the rules on classified information and sensitive information 

1.  Classified  information  that  is  created,  handled,  stored,  exchanged  or  shared  under  this 

Regulation shall be protected in accordance with the security rules set out in Commission 

Decision (EU, Euratom) 2015/44433 or the Agreement between the Member States of the 

European  Union,  meeting  within  the  Council,  regarding  the  protection  of  classified 

information exchanged in the interests of the European Union, as appropriate.  

2.  The Commission shall use a secured exchange system in order to facilitate the exchange 

of classified information and sensitive information between the Commission and Ukraine 

and, where appropriate, with the Participating Member States. 

3.  The  Commission  shall  have  access  to  information,  including  classified  information, 

necessary for the tasks assigned to it under this Regulation, in particular for the purpose 

of  verifying  the  conditions  for  disbursement  of  payments  and  carrying  out  the  checks, 

reviews, audits, investigations, reports as well as the controls and audits, as referred to in 

Article 20. 

4. 

Information received as a result of the application of this Regulation shall be used only 

for the purpose for which it was requested.  

5.  The  Commission  and  Participating  Member  States  shall  ensure  the  protection  of  trade 

and  business  secrets  and  other  sensitive  information  acquired  and  generated  in 

application of this Regulation in accordance with Union law and respective national law. 

CHAPTER VI 
FINAL PROVISIONS 

Article 26 
Exercise of the delegation 

1.  The  power  to  adopt  delegated  acts  is  conferred  on  the  Commission  subject  to  the 

conditions laid down in this Article. 

2.  The  power  to  adopt  delegated  acts  referred  to  in  Article  13  shall  be  conferred  on  the 

Commission  for  an  indeterminate  period  of  time  from  seven  days  after  the  entry  into 

force of this Regulation. 

33 

Commission Decision (EU, Euratom) 2015/444 of 13 March 2015 on the security rules for protecting 
EU classified information (OJ L 72, 17.3.2015, p. 53, ELI: http://data.europa.eu/eli/dec/2015/444/oj). 

EN 

40 

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3.  The  delegation  of  power  referred  to  in  Article  13  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. 

4.  Before  adopting  a  delegated  act,  the  Commission  shall  consult  experts  designated  by 

each Member State in accordance with the principles laid down in the Interinstitutional 

Agreement of 13 April 2016 on Better Law-Making. 

5.  As soon as it adopts a delegated act, the Commission shall notify it simultaneously to the 

European Parliament and to the Council. 

6.  A delegated act adopted pursuant to Article 13 shall enter into force only if no objection 

has been expressed either by the European Parliament or by the Council within a period 

of two months 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 two 

months at the initiative of the European Parliament or of the Council. 

Article 27 
Committee procedure 

1.  The Commission shall be assisted by a committee. That committee shall be a committee 

within the meaning of Regulation (EU) No 182/2011. 

2.  The  EDA  shall  be  invited  to  provide  its  views  and  expertise  to  the  committee  as  an 

observer. The EEAS shall also be invited to assist in the work of the committee. 

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

shall apply. 

Article 28 
Ukraine Support Loan dialogue 

1. 

In  order  to  enhance  the  dialogue  between  the  Union  institutions,  in  particular  the 

European  Parliament,  the  Council  and  the  Commission,  and  to  ensure  greater 

transparency  and  accountability,  the  competent  committee  of  the  European  Parliament 

may invite the Commission to discuss the implementation of this Regulation. 

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41 

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2.  The  European  Parliament  may  express  its  views  in  resolutions  as  regards  the  Ukraine 

Support Loan. 

3.  The Commission shall take into account any elements arising from the views expressed 

through the Ukraine Support Loan dialogue, including the resolutions from the European 

Parliament if provided. 

Article 29 
Information to the European Parliament and to the Council 

1. 

The  Commission  shall  inform  the  European  Parliament  and  the  Council  of 

developments regarding the implementation of this Regulation, including Article 4(4), Article 

6(1),  Article  7(5),  Article  11(4),  Article  20(3)  and  Article  23(2)  and  shall  provide  those 

institutions with the relevant documents without undue delay. Information transmitted by the 

Commission  to  the  Council  in  the  context  of  this  Regulation  or  its  implementation  shall 

simultaneously  be  made  available  to  the  European  Parliament,  subject  to  confidentiality 

arrangements if necessary. 

2. 

By  30  June  2027  and  30  June  2028,  the  Commission  shall  submit  to  the  European 

Parliament  and  to  the  Council  a  report  on  the  implementation  of  this  Regulation  in  the 

preceding year, including an evaluation of that implementation. That report shall:  

(a) 

examine progress made in implementing the Ukraine Support Loan;  

(b) 

provide information on the monitoring referred to in Article 17; and  

(c) 

assess  the  economic  situation  and  prospects  of  Ukraine,  as  well  as  progress 

made in implementing the policy conditions referred to in Article 11(1). 

3. 

By 30 June 2029, the Commission shall submit to the European Parliament and to the 

Council an evaluation report, assessing the results and efficiency of the Ukraine Support Loan 

provided under this Regulation and the extent to which it has contributed to the aims of the 

assistance. 

Article 30 
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. 

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42 

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For  those  Member  States  which  participate  in  enhanced  cooperation  by  virtue  of  a  decision 
adopted pursuant to Article 331(1) TFEU, second or third subparagraph, this Regulation shall 
apply as from the date indicated in the decision concerned. 

This  Regulation  shall  be  binding  in  its  entirety  and  directly  applicable  in  the  participating 
Member States in accordance with the Treaties. 

Done at Brussels, 

For the European Parliament 
The President 

For the Council 
The President 

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LEGISLATIVE FINANCIAL AND DIGITAL STATEMENT 

1. 

1.1. 

1.2. 

1.3. 

FRAMEWORK OF THE PROPOSAL/INITIATIVE ................................................. 3 

Title of the proposal/initiative ...................................................................................... 3 

Policy area(s) concerned .............................................................................................. 3 

Objective(s) .................................................................................................................. 3 

1.3.1.  General objective(s) ..................................................................................................... 3 

1.3.2.  Specific objective(s) ..................................................................................................... 3 

1.3.3.  Expected result(s) and impact ...................................................................................... 3 

1.3.4. 

Indicators of performance ............................................................................................ 3 

1.4. 

1.5. 

The proposal/initiative relates to: ................................................................................. 4 

Grounds for the proposal/initiative .............................................................................. 4 

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 ............................................................ 4 

1.5.2.  Added value of EU involvement (it may result from different factors, e.g. 

coordination gains, legal certainty, greater effectiveness or complementarities). For 
the purposes of this section 'added value of EU involvement' is the value resulting 
from EU action, that is additional to the value that would have been otherwise 
created by Member States alone. ................................................................................. 4 

1.5.3.  Lessons learned from similar experiences in the past .................................................. 4 

1.5.4.  Compatibility with the multiannual financial framework and possible synergies with 
other appropriate instruments ....................................................................................... 5 

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

redeployment ................................................................................................................ 5 

1.6. 

1.7. 

2. 

2.1. 

2.2. 

2.2.1. 

2.2.2. 

Duration of the proposal/initiative and of its financial impact .................................... 6 

Method(s) of budget implementation planned ............................................................. 6 

MANAGEMENT MEASURES................................................................................... 8 

Monitoring and reporting rules .................................................................................... 8 

Management and control system(s) ............................................................................. 8 

Justification of the budget implementation method(s), the funding implementation 
mechanism(s), the payment modalities and the control strategy proposed .................. 8 

Information concerning the risks identified and the internal control system(s) set up 
to mitigate them............................................................................................................ 8 

2.2.3.  Estimation and justification of the cost-effectiveness of the controls (ratio between 

the control costs  and the value of the related funds managed), and assessment of the 
expected levels of risk of error (at payment & at closure) ........................................... 8 

2.3. 

3. 

3.1. 

Measures to prevent fraud and irregularities ................................................................ 9 

ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE ............ 10 

Heading(s) of the multiannual financial framework and expenditure budget line(s) 
affected ....................................................................................................................... 10 

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3.2. 

Estimated financial impact of the proposal on appropriations ................................... 12 

3.2.1.  Summary of estimated impact on operational appropriations.................................... 12 

3.2.1.1.  Appropriations from voted budget ............................................................................. 12 

3.2.1.2.  Appropriations from external assigned revenues ....................................................... 17 

3.2.2.  Estimated output funded from operational appropriations......................................... 22 

3.2.3.  Summary of estimated impact on administrative appropriations ............................... 24 

3.2.3.1. Appropriations from voted budget .............................................................................. 24 

3.2.3.2.  Appropriations from external assigned revenues ....................................................... 24 

3.2.3.3.  Total appropriations ................................................................................................... 24 

3.2.4.  Estimated requirements of human resources.............................................................. 25 

3.2.4.1.  Financed from voted budget....................................................................................... 25 

3.2.4.2.  Financed from external assigned revenues ................................................................ 26 

3.2.4.3.  Total requirements of human resources ..................................................................... 26 

3.2.5.  Overview of estimated impact on digital technology-related investments ................ 28 

3.2.6.  Compatibility with the current multiannual financial framework.............................. 28 

3.2.7.  Third-party contributions ........................................................................................... 28 

3.3. 

4. 

4.1. 

4.2. 

4.3. 

4.4. 

4.5. 

Estimated impact on revenue ..................................................................................... 29 

DIGITAL DIMENSIONS .......................................................................................... 29 

Requirements of digital relevance .............................................................................. 30 

Data ............................................................................................................................ 30 

Digital solutions ......................................................................................................... 31 

Interoperability assessment ........................................................................................ 31 

Measures to support digital implementation .............................................................. 32 

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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 
implementing  enhanced  cooperation  on  the  establishment  of  the  Ukraine  Support 
Loan for 2026 and 2027. 

1.2. 

Policy area(s) concerned  

Economic and Financial Affairs as well as support to the Defence Industry. 

1.3. 

Objective(s) 

1.3.1.  General objective(s) 

To establish the Ukraine Support Loan and make available to Ukraine financial and 
economic  assistance  with  a  view  to  supporting  Ukraine  in  covering  its  financing 
needs  for  2026  and  2027  notably  resulting  from  Russia’s  war  of  aggression  and 
Russia’s  non-payment  of  reparations  due.  The  Ukraine  Support  Loan  shall  provide 
financial  and  economic  assistance  to  Ukraine  in  a  predictable,  continuous,  orderly, 
flexible and timely manner. 

1.3.2. 

Specific objective(s) 

To  support  macro-financial  stability  in  Ukraine  by  easing  its  external  and  internal 
financing constraints, and to support Ukraine’s defence industrial capacities through 
economic, financial and technical cooperation. 

1.3.3.  Expected result(s) and impact 

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

Ukraine  will  be  provided  with  sufficient  and  continuous  financial  support  for  2026 
and  2027  in  response  to  and  following  the  current  crisis  situation.  The  Ukraine 
Support loan is expected to help support Ukraine’s budgetary and defence needs for 
the immediate future. 

1.3.4. 

Indicators of performance 

Specify the indicators for monitoring progress and achievements. 

The authorities of Ukraine will be required to regularly report on the implementation 
of previously granted assistance under the  Ukraine Support Loan. The Commission 
services  will  remain  in  close  contact  with  the  Ukraine  Donor  Platform  to  benefit 
from insights from ongoing activities of the respective donors. 

As regards the objective on easing  financing  constraints,  the authorities of Ukraine 
will  be  required  to  provide  a  report  on  the  compliance  with  the  agreed  policy 
conditions  ahead  of  the  disbursement  of  the  instalment  of  the  macro-financial 
assistance.  The  Commission  services  will  continue  to  monitor  public  finance 
management,  following  the  operational  assessment  of  the  financial  circuits  and 
administrative  procedures  in  Ukraine,  which  was  delivered  in  June  2020,  where  an 
update will be undertaken. 

An  annual  report  on  the  implementation  of  this  Regulation  to  the  European 
Parliament  and  Council  is  foreseen.  An  ex-post  evaluation  of  the  Ukraine  Support 
Loan will be carried out by the Commission. 

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1.4. 

The proposal/initiative relates to:  

☒ a new action  
¨ a new action following a pilot project / preparatory action34  

¨ the extension of an existing action  

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

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 

For the implementation of the Ukraine Support Loan, the Commission will enter into 
a Ukraine Support Loan Agreement with Ukraine detailing the financial terms of the 
Ukraine Support Loan. 

Once the Ukraine Support Loan Agreement is in place, the disbursements from the 
Ukraine Support Loan will be conditional on the submission and positive assessment 
of  a  Ukrainian  Financing  Strategy.  Furthermore,  for  budget  assistance,  a 
memorandum of understanding (MoU) must be agreed between the Commission and 
the  authorities  of  Ukraine  for  macro-financial  assistance  and  the  Ukraine  Plan 
updated  under  the  Ukraine  Facility.  Disbursements  will  then  be  conditional  upon 
relevant  conditions  for  both  budget  assistance  and  assistance  to  support  Ukraine’s 
defence industrial capacities. 

The Ukraine Support Loan will be managed by the Commission. Specific provisions 
on  the  prevention  of  fraud  and  other  irregularities,  consistent  with  the  Financial 
Regulation, are applicable, including the relevant provisions on ensuring the Union’s 
financial interest as laid down in the Framework Agreement under Regulation (EU) 
2024/792. The Commission and the Ukrainian authorities would agree on the MoU 
setting out reporting requirements.  

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

Reasons  for  action  at  EU  level  (ex-ante):  This  proposal  responds  to  the  need  for  a 
common  response  in  providing  support  to  Ukraine  on  an  adequate  scale,  which 
cannot  be  sufficiently  achieved  by  the  Member  States  alone  and  can  be  better 
achieved  by  the  EU.  The  main  reasons  are  the  fiscal  capacity  and  budgetary 
constraints faced at the national level and the need for strong coordination in order to 
maximise the scale and effectiveness of the support, while limiting the burden on the 
administrative  capacity  of  Ukrainian  authorities,  which  is  very  stretched  in  the 
current circumstances.  

The  initiative  is  part  of  the  EU’s  objective  to  provide  support  to  Ukraine  and 
reinforces  actions  by  the  Union  for  economic  and  defence  support,  as  well  as  the 
Union’s initiatives to coordinate multilateral actions.  

34 

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

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47 

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Expected  generated  EU  added  value  (ex-post):  The  expected  EU  added  value, 
notably in comparison to other EU instruments, is to swiftly support macro-financial 
stability  via  easing  Ukraine’s  external  and  internal  financing  constraints  and  to 
support Ukraine’s defence industrial capacities - within an appropriate framework for 
reporting requirements.  

1.5.3.  Lessons learned from similar experiences in the past 

Previous  macro-financial  assistance  operations  to  Ukraine  are  subject  to  ex-post 
evaluation.  Past  ex-post  evaluations  of  previous  macro-financial  assistance 
operations to Ukraine have shown that in general they were highly relevant in terms 
of  its  objectives,  budget  and  policy  objectives.  They  proved  crucial  to  support 
Ukraine  in  addressing  its  balance-of-payment  problems  and  implementing  key 
structural  reforms  to  stabilise  the  economy  and  enhance  the  sustainability  of  its 
external  position.  They allowed  for  fiscal  savings  and  financial  benefits,  as  well  as 
acted as a catalyst for additional financial support and investor confidence. 

1.5.4.  Compatibility with the multiannual financial framework and possible synergies with 

other appropriate instruments 

The resources for the Ukraine Support Loan will be financed by borrowing under the 
diversified funding strategy referred to in Article 224 of Regulation  (EU, Euratom) 
2024/2509.  In  considering  the  financial  risks  and  the  budgetary  coverage,  no 
provisioning  should  be  constituted  for  the  support  in  the  form  of  loans  under  this 
Regulation, to be guaranteed over and above the ceilings, and, by way of derogation 
from  Article  214(1)  of  Regulation  (EU,  Euratom)  2024/2509,  no  provisioning  rate 
should be set. 

With  a  view  to  providing  support  to  Ukraine  on  a  highly  concessional  basis,  the 
Union budget  will provide for  a subsidy for the  costs arising  from  borrowing for  a 
loan  to  Ukraine  that  would  otherwise  have  to  be  borne  by  Ukraine.  These  costs 
include  debt  service  costs  (cost  of  funding  and  costs  of  issuing  and  managing 
liquidity)  and  the  associated  administrative  costs.  The  debt  service  costs  will  be 
covered  by  a  dedicated  special  instrument  over  and  above  the  ceilings  of  the 
Multiannual Financial Framework, in line with an accompanying proposal to amend 
Regulation  2020/2093.  When  mobilising  it  in  the  framework  of  the  budgetary 
procedure,  budgetary  availabilities  in  other  special  instruments,  applicable  sectoral 
rules, any legal or other obligations including under the EURI Instrument, priorities, 
prudent budgeting and sound financial management will be considered. 

A  new  budget  line  will  be  created  to  clearly  and  transparently  identify  the 
expenditure related to the debt service costs resulting from the enhanced cooperation. 
Administrative  costs  will  be  borne  by  the  Union  budget  with  staff  costs  being 
covered by Heading 7 of the Multiannual Financial Framework. 

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

redeployment 

On 23 October 2025, 26 Member States invited the Commission to present, as soon 
as  possible,  options  for  financial  support  to  Ukraine.  The  Commission  presented  a 
number  of  options,  where  on  18  December  2025  the  European  Council  agreed  to 
provide a loan to Ukraine of EUR 90 billion for the years 2026-2027 based on EU 
borrowing on the capital markets backed by the EU budget headroom. 

EN 

48 

  EN 

1.6. 

Duration of the proposal/initiative and of its financial impact 

☒ limited duration  

–  ☒  financial impact  from  2026 to  2027  for commitment  appropriations and from 

2026 to 2028 for payment appropriations.  

In addition, an interest rate subsidy to Ukraine may be provided annually over 
the duration of the loan. 

 unlimited duration 

1.7.  Method(s) of budget implementation planned  

☒ 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 European Investment Bank 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 
common  foreign  and  security  policy  pursuant  to  Title  V  of  the  Treaty  on 
European Union, and identified in the relevant basic act 

–  bodies  established  in  a  Member  State,  governed  by  the  private  law  of  a 
Member  State  or  Union  law  and  eligible  to  be  entrusted,  in  accordance  with 
sector-specific  rules,  with  the  implementation  of  Union  funds  or  budgetary 
guarantees, to  the extent that such bodies are controlled by public law bodies or 
by bodies governed by private law with a public service mission, and are provided 
with adequate financial guarantees in the form of joint and several liability by the 
controlling bodies or equivalent financial guarantees and which may be, for each 
action, limited to the maximum amount of the Union support. 

Comments  

N/A 

EN 

49 

  EN 

2. 

MANAGEMENT MEASURES  

2.1.  Monitoring and reporting rules  

The  monitoring  and  reporting  obligations  under  Regulation  (EU,  Euratom) 
2024/2509 apply.  

The  monitoring  of  the  action  by  the  Commission  services  will  take  place  based  on 
the implementation of previously granted assistance under the Ukraine Support Loan.  

Furthermore,  the  monitoring  of  the  action  will  take  into  consideration  the  specific 
measures to be agreed with the Ukrainian authorities in  the MoU. The Commission 
will  verify  the  fulfilment  of  the  policy  conditions  set  out  in  the  MoU.  The 
Commission will inform the European Parliament and the Council about the results 
of that verification. 

Finally, the monitoring of the action will take into consideration the engagement with 
the  Ukrainian  authorities,  including  the  respective  requests  for  funds  and  the 
information contained therein, regarding the assistance to support Ukraine’s defence 
industrial capacities. 

In order to  ensure that the European  Parliament  and the Council are  able to  follow 
the implementation of this Regulation, the Commission should regularly inform them 
of  developments  relating  to  Union  assistance  to  Ukraine  under  this  Regulation  and 
provide them with the relevant documents. 

The  Commission  should  regularly  review  the  adequacy  of  such  reporting  and 
monitoring  requirements  and  report  to  the  European  Parliament  and  to  the  Council 
thereon, thereby guaranteeing transparency and accountability. 

No later than 30 June 2029, the Commission will submit to the European Parliament 
and to the Council an ex-post evaluation report, assessing the results and efficiency 
of the Ukraine Support Loan provided under this Regulation and the extent to which 
it has contributed to the aims of the assistance. 

2.2.  Management and control system(s)  

2.2.1. 

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

The  actions  to  be  financed  under  this  proposal  will  be  implemented  under  direct 
management  by  the  Commission.  The  financial  support  under  the  Ukraine  Support 
Loan  will  be  made  available  by  the  Commission.  The  release  of  funds  can  be 
organised swiftly to start in the course of 2026 and be completed in 2028 at the latest. 

2.2.2. 

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

The Commission shall have access to information, including classified information, 
strictly necessary for the tasks assigned to it under this Regulation, in particular for 
the  purpose  of  verifying  the  conditions  for  disbursement  of  payments  and  carrying 
out  the  checks,  reviews,  audits,  investigations,  reports  as  well  as  the  controls  and 
audits, as referred to in Article 20.  

To  protect  the  Union’s  financial  interests  linked  to  the  Ukraine  Support  Loan,  the 
Ukraine Support Loan Agreement to be concluded between the Commission and the 
rights, 
Ukrainian  authorities  should  contain  provisions  aligned  with 

the 

EN 

50 

  EN 

responsibilities and obligations provided  for in  the framework agreement  under the 
Ukraine  Facility. Ukraine  will  utilise the same management and  control systems  as 
proposed in the Ukraine Plan established under Regulation (EU) 2024/792.  

Ukraine will be required to provide monthly reports providing information covering 
all payments. It will open a special account for the sole purpose of the management 
of  the  financial  and  economic  assistance  received  to  support  Ukraine’s  defence 
industrial capacities. All payments of the contracts or agreements that are requested 
for  assistance  to  support  Ukraine’s  defence  industrial  capacities  will  be  paid  from 
this account. The Commission will be granted monitoring rights of this account.   

Additionally,  if  it  has  been  established  that  Ukraine  has  engaged  in  acts  of  fraud, 
corruption  or  other  illegal  activity  with  respect  to  the  management  of  the  Ukraine 
Support  Loan,  to  the  detriment  of  the  Union’s  financial  interests,  the  Union  can 
demand early repayment of the Ukraine Support Loan.  

In  order  to  address  the  risks  related  to  information  confidentiality,  classified 
information  that  is  created,  handled,  stored,  exchanged  or  shared  under  this 
Regulation  should  be  protected  in  accordance  with  the  security  rules  set  out  in 
Commission  Decision  (EU,  Euratom)  2015/444  or  the  Agreement  between  the 
Member  States  of  the  European  Union,  meeting  within  the  Council,  regarding  the 
protection  of  classified  information  exchanged  in  the  interests  of  the  European 
Union,  as  appropriate.  The  Commission  should  use  a  secured  exchange  system  in 
order  to  facilitate  the  exchange  of  classified  information  and  sensitive  information 
between the Commission and Ukraine and, where appropriate, with the Participating 
Member States.  

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

The  control  systems  in  place  have  ensured  an  effective  error  rate  for  the  macro-
financial  assistance  type  of  payments  so  far  of  0%.  There  are  no  known  cases  of 
fraud,  corruption  or  illegal  activity.  Operations  have  a  clear  intervention  logic,  one 
that  allows  the  Commission  to  evaluate  their  impact.  The  controls  enable  the 
confirmation of assurance and of attainment of policy objectives and priorities. 

 Measures to prevent fraud and irregularities  

The Ukraine Support Loan Agreement to be concluded between the Commission and 
the Ukrainian authorities will require that Ukraine utilises the same management and 
control systems as proposed in the Ukraine Plan established under Regulation (EU) 
2024/792 that entered into force on 20 June 2024 to ensure that the Union’s financial 
interests linked to the Ukraine Support Loan are protected efficiently, providing the 
appropriate  measures  relating  to  the  prevention  of,  and  fight  against,  fraud, 
corruption  and  any  other  irregularities  linked  to  the  assistance.  It  will  also,  in 
accordance  with  the  Financial  Regulation,  grant  the  necessary  rights  and  access  to 
the  Commission,  the  European  Anti-Fraud  Office  (OLAF),  the  European  Court  of 
Auditors and, where applicable, the European Public Prosecutor’s Office, including 
from third parties involved in the implementation of Union funds during and after the 
availability  period  of  the  Ukraine  Support  Loan.  Ukraine  should  also  report 
irregularities in relation  to the use of the funds to the Commission, in line with the 
procedures  provided  for  in  the  framework  agreement  under  the  Ukraine  Facility.

EN 

51 

  EN 

3. 

3.1. 

ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE  

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

•  Existing budget lines  

In order of multiannual financial framework headings and budget lines. 

Budget line 

Type of 
expenditure 

Contribution  

Heading of 
multiannual 
financial 
framework 

Number  

2.2 

[06.01.03]  –  Support  expenditure  for 
borrowing and debt management activities 
of the European Union  

•  New budget lines requested  

Diff./Non-
diff.35 

from 
EFTA 
countries
36 

from 
candidate 
countries 
and 
potential 
candidates
37 

From 
other 
third 
countries 

other assigned 
revenue 

Non-diff. 

NO 

NO 

NO 

NO 

In order of multiannual financial framework headings and budget lines. 

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 

[16.07- Ukraine Support Loan 

[16.07.01] – Debt service cost of Ukraine 
Support Loan 

Diff. 

Diff. 

NO 

NO 

NO 

YES 

NO 

NO 

NO 

YES 

35 
36 
37 

Diff. = Differentiated appropriations / Non-diff. = Non-differentiated appropriations. 
EFTA: European Free Trade Association.  
Candidate countries and, where applicable, potential candidates from the Western Balkans. 

EN 

52 

  EN 

 
 
 
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 

3.2.1.1.  Appropriations from voted budget 

Heading of multiannual financial framework  

Number 

EUR million (to three decimal places) 

DG: <…….> 

Year 

2024 

Year 

2025 

Year 

2026 

Year 

2027 

TOTAL MFF 
2021-2027 

Operational appropriations  

Budget line 16.07.01 

Budget line 

Commitments 

Payments 

Commitments 

Payments 

(1a) 

(2a) 

(1b) 

(2b) 

Appropriations of an administrative nature financed from the envelope of specific programmes  
Budget line 06.01.03 

(3) 

TOTAL appropriations 
for DG <…….> 

Commitments 

Payments 

=1a+1b+3 

=2a+2b+3 

0.000 

0.000 

0.000 

0.000 

1.000 

1.000 

1.000 

Year 

2024 

Year 

2025 

Year 

2026 

0  

0  

1 000.000(*)  

1 000.000(*)  

1 000.000(*)  

1 000.000(*)  

0.000 

0.000 

2.000 

1 002.000 

1 002.000 

TOTAL MFF 
2021-2027 

1.000 

1 001.000 

1 001.000 

Year 

2027 

TOTAL 

operational 

appropriations  

Commitments 

Payments 

(4) 

(5) 

0.000 

0.000 

0.000 

0.000 

0 

0 

1 000.000(*) 

1 000.000(*) 

1 000.000(*) 

1 000.000(*) 

EN 

53 

EN 

 
 
 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
TOTAL  appropriations  of  an  administrative  nature  financed 
from the envelope for specific programmes  

TOTAL appropriations under 
HEADING <….> 

Commitments 

of the multiannual financial framework 

Payments 

(6) 

=4+6 

=5+6 

•  TOTAL  operational  appropriations 
operational headings) 

(all 

Commitments 

Payments 

•  TOTAL  appropriations  of  an  administrative  nature  financed 
from  the  envelope  for  specific  programmes  (all  operational 
headings) 

TOTAL appropriations Under          

Heading 1 to 6 

Commitments 

of the multiannual financial framework 
(Reference amount) 

Payments 

(4) 

(5) 

(6) 

=4+6 

=5+6 

0.000 

0.000 

1.000 

1.000 

2.000 

0.000 

0.000 

1.000 

1 001.000 

1 002.000 

0.000 

0.000 

1.000 

1 001.000 

1 002.000 

Year 

2024 

Year 

2025 

Year 

2026 

Year 

2027 

TOTAL MFF 
2021-2027 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

(*) These amounts are indicative and based on current forward interest rates and assuming disbursement of EUR 45 billion in 2026 (EUR 15 
billion per quarter as of second quarter of 2026). Actual appropriations in 2027 will depend on market conditions at the time of borrowing and 
the actual pace of disbursement, and may reach up to EUR 1.3 billion in a scenario of increase in interest rates by 100 basis points compared to 
the baseline. 

Heading of multiannual financial  framework  

7 

‘Administrative expenditure’ 

 Human resources  
 Other administrative expenditure  

Year 

2024 

Year 

2025 

Year 

2026 

Year 

2027 

TOTAL 
MFF 2021-
2027 

0.000 

0.000 

0.000 

0.000 

11.366 

0.336 

11.366 

0.336 

22.732 

0.672 

EN 

54 

EN 

 
 
 
 
 
 
 
 
 
 
 
 
TOTAL 

Appropriations  

0.000 

0.000 

11.702 

11.702 

23/404 

TOTAL appropriations under HEADING 7 of the multiannual financial 
framework  

(Total 
commitments 
= Total 
payments) 

0.000 

0.000 

11.702 

11.702 

23.404 

EUR million (to three decimal places) 

Year 

2024 

Year 

2025 

Year 

2026 

Year 

2027 

TOTAL MFF 
2021-2027 

TOTAL appropriations under HEADINGS 1 to 7 

Commitments 

0.000 

0.000 

12.702  1 012.702 

1 025.404 

of the multiannual financial framework  

Payments 

0.000 

0.000 

12.702  1 012.702 

1 025.404 

3.2.1.2.  Appropriations from external assigned revenues 

Heading of multiannual financial framework  

Number 

EUR million (to three decimal places) 

DG: <…….> 

Year 

2024 

Year 

2025 

Year 

2026 

Year 

2027 

TOTAL MFF 
2021-2027 

Operational appropriations  

Budget line 

Budget line 

Commitments 

Payments 

Commitments 

Payments 

(1a) 

(2a) 

(1b) 

(2b) 

Appropriations of an administrative nature financed from the envelope of specific programmes  
Budget line 

(3) 

TOTAL appropriations 

Commitments 

=1a+1b+3 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

EN 

55 

EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
for DG <…….> 

Payments 

=2a+2b+3 

0.000 

0.000 

0.000 

0.000 

0.000 

TOTAL 

operational 

appropriations  

Commitments 

Payments 

TOTAL  appropriations  of  an  administrative  nature  financed 
from the envelope for specific programmes  

TOTAL appropriations under 
HEADING <….> 

Commitments 

of the multiannual financial framework 

Payments 

TOTAL 

operational 

appropriations  

Commitments 

Payments 

TOTAL  appropriations  of  an  administrative  nature  financed 
from the envelope for specific programmes  

TOTAL appropriations under 
HEADING <….> 

Commitments 

of the multiannual financial framework 

Payments 

(4) 

(5) 

(6) 

=4+6 

=5+6 

(4) 

(5) 

(6) 

=4+6 

=5+6 

Year 

2024 

Year 

2025 

Year 

2026 

Year 

2027 

TOTAL MFF 
2021-2027 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

Year 

2024 

Year 

2025 

Year 

2026 

Year 

2027 

TOTAL MFF 
2021-2027 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

Year 

2024 

Year 

2025 

0.000 

Year 

2026 

0.000 

0.000 

TOTAL MFF 
2021-2027 

0.000 

0.000 

0.000 

Year 

2027 

0.000 

0.000 

•  TOTAL  operational  appropriations 
operational headings) 

(all 

Commitments 

Payments 

(4) 

(5) 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

EN 

56 

EN 

 
 
  
 
  
 
 
 
 
 
 
 
 
 
•  TOTAL  appropriations  of  an  administrative  nature  financed 
from  the  envelope  for  specific  programmes  (all  operational 
headings) 

TOTAL appropriations under Headings 1 
to 6 

Commitments 

of the multiannual financial framework (Reference 
amount) 

Payments 

(6) 

=4+6 

=5+6 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

Heading of multiannual financial framework  

7 

‘Administrative expenditure’  

DG: <…….> 

 Human resources  
 Other administrative expenditure  

TOTAL DG <…….> 

Appropriations  

EUR million (to three decimal places) 

Year 

2024 

Year 

2025 

Year 

2026 

Year 

2027 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

TOTAL 
MFF 2021-
2027 

0.000 

0.000 

0.000 

TOTAL appropriations under HEADING 7 of the multiannual 
financial framework  

(Total 
commitments 
= Total 
payments) 

0.000 

0.000 

0.000 

0.000 

0.000 

Year 

2024 

Year 

2025 

Year 

2026 

Year 

2027 

TOTAL MFF 
2021-2027 

EUR million (to three decimal places) 

TOTAL appropriations under HEADINGS 1 to 7 

Commitments 

0.000 

0.000 

0.000 

0.000 

0.000 

of the multiannual financial framework  

Payments 

0.000 

0.000 

0.000 

0.000 

0.000 

EN 

57 

EN 

 
 
 
 
 
 
 
 
 
 
 
 
  
3.2.2.  Estimated output funded from operational appropriations (not to be completed for decentralised agencies) 

Year  
2024 

Year  
2025 

Year  
2026 

Year  
2027 

OUTPUTS 

Commitment appropriations in EUR million (to three decimal places) 

Enter as many years as necessary to show the 
duration of the impact (see Section1.6) 

TOTAL 

o
N

Cost 

o
N

Cost 

o
N

Cost 

o
N

Cost 

o
N

Cost  N

o

Cost 

o
N

Cost 

Total 
No 

Total 
cost 

Indicate 
objectives and 
outputs  

 

Type38 

Avera
ge 
cost 

SPECIFIC OBJECTIVE No 139… 

- Output 

- Output 

- Output 

Subtotal for specific objective No 1 

SPECIFIC OBJECTIVE No 2 ... 

- Output 

Subtotal for specific objective No 2 

TOTALS 

38 
39 

Outputs are products and services to be supplied (e.g. number of student exchanges financed, number of km of roads built, etc.). 
As described in Section 1.3.2. ‘Specific objective(s)’  

EN 

58 

EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 

3.2.3.1. Appropriations from voted budget 

VOTED APPROPRIATIONS 

Year 

2024 

Year 

2025 

Year 

2026 

Year 

2027 

TOTAL 
2021 - 2027 

HEADING 7 

Human resources  

Other administrative expenditure  

Subtotal HEADING 7 

Outside HEADING 7 

Human resources  

Other expenditure of an administrative nature 

Subtotal outside HEADING 7 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

11.366 

11.366 

0.336 

0.336 

11.702 

11.702 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

22.732 

0.672 

23.404 

0.000 

0.000 

0.000 

TOTAL 

0.000 

0.000 

11.702 

11.702 

23.404 

3.2.3.2.  Appropriations from external assigned revenues 

EXTERNAL ASSIGNED REVENUES 

Year 

2024 

Year 

2025 

Year 

2026 

Year 

2027 

TOTAL 
2021 - 2027 

HEADING 7 

Human resources  

Other administrative expenditure  

Subtotal HEADING 7 

Outside HEADING 7 

Human resources  

Other expenditure of an administrative nature 

Subtotal outside HEADING 7 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

TOTAL 

0.000 

0.000 

0.000 

0.000 

0.000 

VOTED APPROPRIATIONS                            

+                                                               

Year 

2024 

Year 

Year 

Year 

2025 

2026 

2027 

TOTAL 
2021 - 2027 

3.2.3.3.  Total appropriations 

TOTAL 

EXTERNAL ASSIGNED REVENUES 

HEADING 7 

Human resources  

Other administrative expenditure  

Subtotal HEADING 7 

Outside HEADING 7 

Human resources  

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

11.366 

0.336 

11.702 

11.366 

0.336 

11.702 

22.732 

0.672 

23.404 

0.000 

0.000 

0.000 

0.000 

0.000 

EN 

1 

  EN 

 
  
  
Other expenditure of an administrative nature 

Subtotal outside HEADING 7 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

0.000 

TOTAL 

0.000 

0.000 

11.702 

11.702 

23.404 

3.2.4.  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 

3.2.4.1.  Financed from voted budget 

Estimate to be expressed in full-time equivalent units (FTEs) 

VOTED APPROPRIATIONS 

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 (EU Delegations) 

01 01 01 01 (Indirect research) 

01 01 01 11 (Direct research) 

Other budget lines (specify) 

• External staff (inFTEs) 

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

20 02 03 (AC, AL, END and JPD in the EU Delegations) 

Admin. Support 
line 
[XX.01.YY.YY] 

- at Headquarters 

- in EU Delegations  

01 01 01 02 (AC, END - Indirect research) 

 01 01 01 12 (AC, END - Direct research) 

Other budget lines (specify) - Heading 7 

Other budget lines (specify) - Outside Heading 7 

TOTAL 

3.2.4.2.  Financed from external assigned revenues 

EXTERNAL ASSIGNED REVENUES 

 Establishment plan posts (officials and temporary staff) 

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

20 01 02 03 (EU Delegations) 

01 01 01 01 (Indirect research) 

01 01 01 11 (Direct research) 

Other budget lines (specify) 

• External staff (in full time equivalent units) 

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

20 02 03 (AC, AL, END and JPD in the EU Delegations) 

Admin. Support 

- at Headquarters 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

43 

10 

0 

0 

0 

2 

0 

0 

0 

0 

0 

0 

0 

43 

10 

0 

0 

0 

2 

0 

0 

0 

0 

0 

0 

0 

55 

55 

Year 

2024 

Year 

2025 

Year 

2026 

Year 

2027 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

EN 

2 

  EN 

 
  
 
line  
[XX.01.YY.YY] 
01 01 01 02 (AC, END - Indirect research) 

- in EU Delegations  

 01 01 01 12 (AC, END - Direct research) 

Other budget lines (specify) - Heading 7 

Other budget lines (specify) - Outside Heading 7 

TOTAL 

3.2.4.3.  Total requirements of human resources 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

TOTAL VOTED APPROPRIATIONS                                                   

Year 
+                                                                                               
2025 

2024 

Year 

EXTERNAL ASSIGNED REVENUES 

 Establishment plan posts (officials and temporary staff) 

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

20 01 02 03 (EU Delegations) 

01 01 01 01 (Indirect research) 

01 01 01 11 (Direct research) 

Other budget lines (specify) 

• External staff (in full time equivalent units) 

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

20 02 03 (AC, AL, END and JPD in the EU Delegations) 

Admin. Support 
line  
[XX.01.YY.YY] 

- at Headquarters 

- in EU Delegations  

01 01 01 02 (AC, END - Indirect research) 

 01 01 01 12 (AC, END - Direct research) 

Other budget lines (specify) - Heading 7 

Other budget lines (specify) - Outside Heading 7 

TOTAL 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

Year 

Year 

2026 

2027 

43 

10 

0 

0 

0 

2 

0 

0 

0 

0 

0 

0 

0 

43 

10 

0 

0 

0 

2 

0 

0 

0 

0 

0 

0 

0 

55 

55 

12 posts and 2 FTE will come from redeployments from the limited Commission redeployment pool.  

The implementation of this proposal requires 41 additional posts on top of the establishment plan, all 
to be financed by Heading 7 beyond stable staffing. A statement to this effect will be proposed as part 
of the legislative procedure. 

All staff will be financed by Heading 7.  

The staff required to implement the proposal (in FTEs):  

To be covered by 
current staff 
available in the 
Commission 
services  

Exceptional additional staff* 

To be financed 
under Heading 7 
or Research 

To be financed 
from BA line 

To be financed 
from fees 

Establishment 

12 posts 

41 posts 

N/A 

EN 

3 

  EN 

 
 
 
 
 
plan posts 

External 
staff 
(CA, SNEs, INT) 

2 CA 

Description of tasks to be carried out by: 

Officials and temporary staff 

53 officials and temporary staff to work on: 

- 
- 

Programming/expert group/Committee 
Implementation: horizontal tasks, thematic/technical expertise for EU and UA 
desks 

-  Ukraine financing strategy 
-  Work on MFA 
-  Work on defence support 
-  Audit and control 
-  Legal work  
- 
-  Accounting tasks  
-  Headroom sustainability  
-  Borrowing and loan management  
-  Cash calls, settlement reporting, etc.  
-  Manage contracts 

Financial circuit design 

External staff 

2 FTE to support the work on programming/expert group/committee 

3.2.5.  Overview of estimated impact on digital technology-related investments 

Compulsory: the best estimate of the digital technology-related investments entailed 
by the proposal/initiative should be included in the table below.  

Exceptionally,  when  required  for  the  implementation  of  the  proposal/initiative,  the 
appropriations under Heading 7 should be presented in the designated line.  

The appropriations under Headings 1-6 should be reflected as “Policy IT expenditure 
on operational programmes”. This expenditure refers to the operational budget to be 
used to re-use/ buy/ develop IT platforms/ tools directly linked to the implementation 
of the initiative and their associated investments (e.g. licences, studies, data storage 
etc).  The  information  provided  in  this  table  should  be  consistent  with  details 
presented under Section 4 “Digital dimensions”. 

TOTAL Digital and IT appropriations 

Year 

Year 

Year 

Year 

2024 

2025 

2026 

2027 

TOTAL 
MFF 
2021 - 
2027 

HEADING 7 

IT expenditure (corporate)  

Subtotal HEADING 7 

Outside HEADING 7 

Policy IT expenditure on operational 
programmes 

0.000 

0.000 

0.000 

0.000 

0.336 

0.336 

0.336 

0.336 

0.672 

0.672 

0.000 

0.000 

0.000 

0.000 

0.000 

Subtotal outside HEADING 7 

0.000 

0.000 

0.000 

0.000 

0.000 

EN 

4 

  EN 

 
 
 
 
 
 
  
TOTAL 

0.000 

0.000 

0.336 

0.336 

0.672 

3.2.6.  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) 

–    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 

–   requires a revision of the MFF 

3.2.7.  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) 

Year  
2024 

Year  
2025 

Year  
2026 

Year  
2027 

Total 

Specify the co-financing body  

TOTAL appropriations co-
financed  

3.3. 

Estimated impact on revenue  

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

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

– 

– 

– 

Budget revenue line: 

Budget line 

 

 

on own resources  

on other revenue 

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

Appropriations 
available for the 
current financial 
year 

     EUR million (to three decimal places) 

Impact of the proposal/initiative40 

Year 2024 

Year 2025  Year 2026 

Year 2027 

For assigned revenue, specify the budget expenditure line(s) affected. 

Other  remarks  (e.g.  method/formula  used  for  calculating  the  impact  on  revenue  or 
any other information). 

40 

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 

5 

  EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4. 

DIGITAL DIMENSIONS 

4.1. 

Requirements of digital relevance 

The  initiative  provides  support  to  a  third  country  and  does  not  establish  new  EU-level 
digital  public  services  for  natural  or  legal  persons  inside  the  Union.  Nonetheless,  digital 
elements  are  supportive  for  the  Ukraine  Support  Loan  where  financial  assistance 
management, defence industrial capability support, and loan initiatives require information 
exchange,  verification,  storage  and  also  provision  of  information  to  the  Council  and 
European Parliament where applicable.  

R1  –  Digital  processes  for  financing  and  implementation  (Chapter  V  and  in  particular 
Article 26) 

Description:  transmission  of  reports,  statements  or  supporting  documents  electronically 
using  secure  channels  and  Commission  systems  for  workflows  such  as  requests, 
verification, implementing decision or disbursements. 

Stakeholders:  Commission  services  and  Council;  beneficiary  authorities,  and  EEAS  for 
monitoring the preconditions defined in Article 5. 

Processes: Reporting, monitoring, financial management, information exchange. 

R2  –  Administration  of  defence-industrial  capability  support  (Chapter  IV,  in  particular 
Article 16) 

Description:  Beneficiary  authorities  must  transmit  digital  documentation  demonstrating 
progress  on  supported  defence-industrial  capabilities,  following  Commission  standard 
templates enabling automated verification. 

Stakeholders: Beneficiary authorities; Commission services. 

Processes: Monitoring of the implementation and validation of procurements in accordance 
with the Regulation. 

R3  –  Exchange  with  the  European  Parliament  and  the  Council,  including  audit-relevant 
information (in particular Chapter VI Articles 28 and 29)  

sensitive 

Description:  The  Commission  must  provide  the  European  Parliament  and  Council  with 
reports  and 
systems,  where  necessary. 
through 
Stakeholders: Commission services; European Parliament; Council; beneficiary authorities 
(upstream). 
Processes:  Reporting;  audit  information  exchange;  transmission  of  classified/sensitive 
documents. 

information 

secure 

4.2. 

Data 

For  R1–R3,  the  data  includes  financial  figures,  disbursement  documentation,  defence-
industrial  capability  data,  and  other  information  (including  potentially  sensitive/classified 
material). 

Data exchanges are purpose-bound, minimal, interoperable and carried out through existing 

EN 

6 

  EN 

 
 
 
 
secure  EU  systems,  avoiding  duplicate  data  collection,  aligning  with  the  European  Data 
Strategy. 

Existing  Commission  datasets  and  reporting  channels  will  get  reused  and  the  aim  is  that 
data already submitted for disbursement or monitoring is not requested again, in-line with 
the once-only principle. 

Providers: Beneficiary authorities (R1–R2). 

Recipients: Commission services; European Parliament and Council for reporting (R3). 

Triggers:  Reporting  cycles,  disbursement  requests,  guarantee  notifications,  audit 
requirements. 

Frequency: Periodic (e.g. monthly, or as otherwise defined in the Regulation), and ad hoc 
for financial or audit needs.  

4.3. 

Digital solutions 

Concerning all relevant requirements of digital relevance (R1-3), the Commission shall use 
a  secured  exchange  system  and  data  templates  in  order  to  facilitate  the  exchange  of 
classified information and sensitive information between the Commission and Ukraine and, 
where appropriate, with the Participating Member States.  

Responsibility:  Commission  services  and  beneficiary  authorities  or  Participating  Member 
States or third countries, where appropriate. 

AI: No AI functionality is mandated. 

Compliance: All systems shall comply with the EU cybersecurity framework, eIDAS, data-
protection rules, and Commission rules on handling classified information. 

Reusability: All digital solutions build on existing Commission infrastructure. 

4.4. 

Interoperability assessment 

The Regulation requires secure exchange of classified/sensitive information, access by the 
Commission  to  all  necessary  data  for  obligations  laid  down  in  the  Regulation,  including 
verification,  and  protection  of  data.  All  obligations  are  planned  to  be  met  using  existing 
Commission secure systems without interoperability gaps. This supports R1–R3. 

4.5.  Measures to support digital implementation 

As  the  Commission  already  provides  assistance  to  the  beneficiary  country  under  existing 
financial  and  operational  support  frameworks,  no  additional  digital  implementation 
measures are required for R1 and R3. For defence-industrial capability reporting (R2), the 
Commission  may,  at  service  level,  provide  guidance  and  clarification  on  the  digital 
templates  and  secure  exchange  procedures  to  ensure  readiness  and  consistent  use  by  the 
involved parties. 

EN 

7 

  EN