Budget
1. The resources for the implementation of the Facility shall be available through the Ukraine Reserve to be mobilised in the framework of the annual budgetary procedure in accordance with Article 10b of Regulation (EU, Euratom) 2020/2093, with the following indicative distribution:
(a)
31 % in the form of non-repayable financial support pursuant to Chapter III;
(b)
41 % for expenditure pursuant to Chapter IV;
(c)
26 % for expenditure pursuant to Chapter V;
(d)
2 % for expenditure pursuant to paragraph 5, which may be increased in exceptional circumstances but shall not in any event exceed 2,5 %.
The total resources made available pursuant to the first subparagraph shall be for an amount of up to EUR 17 000 000 000.
The allocation of the available resources under the first subparagraph of paragraph 1 of this Article shall take into account in particular the need to cover expenditure in accordance with Article 23.
2. The financial support pursuant to Chapter III in the form of a loan, shall be available for an amount of up to EUR 33 000 000 000 for the period from 1 January 2024 to 31 December 2027.
3. The sum of the resources made available pursuant to paragraphs 1 and 2 shall not exceed EUR 50 000 000 000 for the period 2024 to 2027.
4. Additional contributions for financing the support referred to in paragraph 1 of this Article may be provided in accordance with Article 7.
5. The resources referred to in paragraph 1, first subparagraph, point (d), and paragraph 4 may be used for technical and administrative assistance for the implementation of the Facility, such as preparatory activities, monitoring, control, audit and evaluation activities, which are required for the management of the Facility and the achievement of its objectives, in particular studies, meetings of experts, the consultations with the Ukrainian authorities, conferences, consultation of stakeholders, information and communication activities, including inclusive outreach activities, and the corporate communication of the political priorities of the Union, insofar as they are related to the objectives of this Regulation, expenses linked to IT networks focusing on information processing and exchange, corporate information technology tools, and all other technical and administrative assistance expenses incurred by the Commission for the management and costs of the Facility at headquarters and in Union delegations. Expenses may also cover the costs of other supporting activities such as quality control and monitoring of projects on the ground and the costs of peer counselling and experts for the assessment and implementation of reforms and investments.
6. The resources not allocated or used for expenditure under paragraph 1, first subparagraph, point (d), of this Article, and under Article 23 shall be made available for other operational expenditure under paragraph 1 of this Article without prejudice to the prerogatives of the budgetary authority and subject to the third subparagraph of paragraph 1 of this Article.
Additional financial resources for the Facility
1. Member States, third countries, international organisations, international financial institutions or other sources may provide additional financial contributions to the Facility without being bound by the indicative distribution referred to in Article 6(1). Such contributions shall constitute external assigned revenue within the meaning of Article 21(2), points (a)(ii), (d) and (e), of Regulation (EU, Euratom) 2018/1046.
Additional amounts received as external assigned revenue within the meaning of Article 21(5) of Regulation (EU, Euratom) 2018/1046 under the relevant Union legal acts shall be added to the resources referred to in Article 6 of this Regulation.
2. The contributions referred to in paragraph 1 of this Article shall be implemented in accordance with the same rules and conditions as the amount referred to in Article 6(1).
3. The contributions to the Ukraine Guarantee and to financial instruments under Chapter IV shall be made in accordance with Article 29.
Implementation and forms of Union funding
1. The Facility shall be implemented in accordance with Regulation (EU, Euratom) 2018/1046, either in direct management or in indirect management with any of the entities referred to in Article 62(1), first subparagraph, point (c), of that Regulation.
2. Union funding may be provided in any of the forms laid down in Regulation (EU, Euratom) 2018/1046, in particular grants, prizes, procurement, budget support, financial instruments, budgetary guarantees, blending operations and financial assistance.
3. Financial instruments, budgetary guarantees and blending operations combining support from financial instruments or budgetary guarantees under the Facility shall be implemented in accordance with the principles laid down in Title X, and in particular with Articles 208 and 209(1), (2) and (4), of Regulation (EU, Euratom) 2018/1046. Depending on the required operational and financial capacity, the counterpart of the budgetary guarantee or the entrusted entity implementing financial instruments may be the EIB Group, a multilateral European financial institution, such as the EBRD, or a bilateral European financial institution, such as development banks or the World Bank Group. Whenever possible, non-European multilateral financial institutions may participate in the Facility through joint operations with European financial institutions. The implementation of financial instruments, budgetary guarantees and blending operations under the Facility may be complemented by additional forms of financial support from either Member States or third parties.
Framework agreement
1. The Commission shall conclude a framework agreement with Ukraine (the ‘Framework Agreement’) for the implementation of the Facility setting out specific arrangements for the management, control, supervision, monitoring, evaluation, reporting and audit of funds under the Facility, including avoiding double funding, as well as to prevent, detect, investigate and correct irregularities, fraud, corruption or any other illegal activity affecting the financial interests of the Union and conflicts of interest, including the effective investigation and prosecution of offences affecting the funds provided under the Facility. The Framework Agreement shall be complemented by financing agreements referred to in Article 10 and a loan agreement referred to in Article 22, setting out specific provisions for the management and implementation of funding under the Facility. The Framework Agreement, including any related documentation, shall be made available, upon request, to the European Parliament and the Council simultaneously and without delay.
2. With the exception of bridge financing referred to in Article 25, funding shall only be granted to Ukraine after the Framework Agreement and the applicable financing and loan agreements have entered into force.
3. The Framework Agreement, the financing agreements and the loan agreement concluded with Ukraine, taken as a whole, and contracts and agreements signed with persons or entities receiving Union funds shall ensure that the obligations set out in Article 129 of Regulation (EU, Euratom) 2018/1046 are fulfilled.
4. The Framework Agreement shall ensure the commitment of Ukraine to achieve a high level of protection of the financial interests of the Union and shall lay down detailed provisions concerning, in particular:
(a)
the commitment of Ukraine to make decisive progress towards a robust framework to fight fraud, and establish more efficient and effective internal control systems, including appropriate mechanisms for the protection of whistleblowers as well as appropriate mechanisms and measures to effectively prevent, detect and correct irregularities, fraud, corruption and conflicts of interest as well as to support deoligarchisation efforts and to strengthen the fight against money laundering, organised crime, misuse of public funds, terrorism financing, tax avoidance, tax fraud or tax evasion, and other illegal activities affecting the funds provided under the Facility;
(b)
the activities related to control, supervision, monitoring, evaluation, reporting and audit of Union funding under the Facility, as well as detections, investigations, prosecutions, antifraud measures and cooperation, including mutual legal assistance in criminal matters and extradition;
(c)
control requirements for release of funding under the Facility to Ukraine;
(d)
rules on taxes, duties and charges in accordance with Article 27(9) and (10) of Regulation (EU) 2021/947;
(e)
the recognition of the responsibilities of the Audit Board referred to in Article 36, and the modalities of Ukraine’s cooperation with it;
(f)
the obligation for persons or entities implementing Union funds under the Facility to notify the Audit Board, the Commission, OLAF and, where applicable, the EPPO, without delay, of suspected or actual cases of irregularities, fraud, corruption and conflicts of interest and other illegal activities affecting the funds provided under the Facility and their follow-up;
(g)
the right of the Commission to monitor activities under the Facility carried out by the Ukrainian authorities, along the whole project cycle, including, inter alia, project selection and award procedures, including for public procurement, to take part in such activities as observer, as appropriate, and to make recommendations for the improvement of such activities and commitment from the Ukrainian authorities to do their best efforts to implement such recommendations of the Commission and to report on that implementation;
(h)
the obligations referred to in Article 35(2), including the precise rules and a timeframe on collection of data by Ukraine and access to it for the Commission, OLAF, the European Court of Auditors and, where applicable, the EPPO;
(i)
the obligation for Ukraine to transmit electronically to the Commission the data referred to in Article 27;
(j)
the obligations referred to in Article 43(2) on communication activities and the visibility of the Union funding.
Financing agreements
1. Financing agreements shall be concluded for Chapters III and V. They shall set out the responsibilities and obligations of Ukraine in the implementation of Union funds, including the obligations set out in Article 129 of Regulation (EU, Euratom) 2018/1046. They shall also set out the conditions for payment of the non-repayable financial support, including in relation to the implementation of the Framework Agreement, including the internal control systems as referred to in Article 9(4), points (a) and (c). The financing agreements shall also set out the Union’s rights and obligations. They shall be made available, upon request, to the European Parliament and the Council simultaneously.
2. The financing agreements shall include rules on reporting to the Commission on how activities are carried out, and on whether the conditions referred to in Article 16(2) are fulfilled.
Rules on the eligibility of persons and entities, on the origin of supply and materials and on restrictions under the Facility
1. Participation in procurement and in grant and prize award procedures for activities financed under the Facility shall be open to international and regional organisations and to all natural persons who are nationals of, or legal persons effectively established in:
(a)
Member States, Ukraine, Western Balkan partners, Georgia and Moldova and Contracting Parties to the Agreement on the European Economic Area;
(b)
countries which provide a level of support to Ukraine comparable to that provided by the Union taking into account the size of their economy and for which reciprocal access to external assistance in Ukraine is established by the Commission.
2. The reciprocal access referred to in paragraph 1, point (b), may be granted for a limited period of at least one year whenever a country grants eligibility on equal terms to entities from the Union and from countries eligible under the Facility.
The Commission shall decide by means of implementing acts on the reciprocal access after consulting Ukraine. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 42.
3. All supplies and materials financed and procured under the Facility shall originate from any country referred to paragraph 1, points (a) and (b), unless those supplies and materials cannot be sourced under reasonable conditions in any of those countries. In addition, the rules on restrictions in paragraph 7 apply. The Commission shall include information on the implementation of this paragraph in the annual report referred to in Article 39(4).
4. The eligibility rules set out in this Article shall not apply to, and shall not create nationality restrictions for, natural persons employed or otherwise legally contracted by an eligible contractor or, where applicable, subcontractor except where the nationality restrictions are based on the rules provided for in paragraph 7.
5. For activities jointly co-financed by an entity or implemented in direct or indirect management with entities referred to in Article 62(1), first subparagraph, point (c), of Regulation (EU, Euratom) 2018/1046 or for activities implemented by Ukrainian entities under Chapter III of this Regulation, the eligibility rules of those entities or of Ukraine shall also apply in addition to the rules established under this Article, including, where applicable, the restrictions provided for under paragraph 7 of this Article and duly reflected in the financing agreements and contractual documents signed with those entities.
6. Where additional contributions are provided in accordance with Article 7 through external assigned revenues, the eligibility rules in the agreement with the person providing the additional contribution shall apply with the rules on restrictions provided for under paragraph 7 of this Article.
7. The eligibility rules and rules on the origin of supplies and materials as set out in paragraphs 1 and 3 and the rules on the nationality of the natural persons as set out in paragraph 4 may be restricted with regard to the nationality, geographical location or nature of the legal entities participating in procurement procedures as well as with regard to the geographical origin of supplies and materials, in the following cases:
(a)
where such restrictions are required on account of the specific nature or objectives of the activity or specific award procedure or where those restrictions are necessary for the effective implementation of the activity;
(b)
where the activity or specific award procedures affect security or public order, in particular concerning strategic assets and interests of the Union, its Member States, or Ukraine, including the protection of the integrity of digital infrastructure, communication and information systems, and related supply chains.
8. Tender applicants and candidates from non-eligible countries may be accepted as eligible in cases of urgency or where services are unavailable in the markets of the countries or territories concerned, or in other duly substantiated cases where the application of the eligibility rules would make the realisation of an activity impossible or exceedingly difficult.
Carry-overs, annual instalments, commitment appropriations, surpluses from the budgetary guarantee, repayments and revenue generated by financial instruments
1. By way of derogation from Article 12(4) of Regulation (EU, Euratom) 2018/1046, unused commitment and payment appropriations under the Facility shall be automatically carried over and may be committed and used, respectively, up to 31 December of the following financial year. The amount carried over shall be used first in the following financial year.
2. The Commission shall submit to the European Parliament and the Council information on commitment appropriations carried over, including the amounts involved in accordance with Article 12(6) of Regulation (EU, Euratom) 2018/1046.
3. By way derogation from Article 15 of Regulation (EU, Euratom) 2018/1046, commitment appropriations corresponding to the amount of decommitments made as a result of total or partial non-implementation of an activity under the Facility shall be made available again to the benefit of the budget line of origin.
4. By way of derogation from the first, second and fourth subparagraphs of Article 209(3) of Regulation (EU, Euratom) 2018/1046, any revenues and repayments from financial instruments established under this Regulation shall constitute internal assigned revenue within the meaning of Article 21(5) of Regulation (EU, Euratom) 2018/1046, to the Facility or its successor programme.
5. By way of derogation from Article 213(4), point (a), of Regulation (EU, Euratom) 2018/1046, any surplus of the provisions for the Ukraine Guarantee shall constitute internal assigned revenue within the meaning of Article 21(5) of that Regulation to the Facility or its successor programme.
6. Budgetary commitments for activities extending over more than one financial year may be broken down over several years into annual instalments, in accordance with Article 112(2) of Regulation (EU, Euratom) 2018/1046.
The third subparagraph of Article 114(2) of Regulation (EU, Euratom) 2018/1046 shall not apply to the activities referred to in the first subparagraph of this paragraph.
Exceptional financing
1. In duly justified exceptional circumstances, in particular where a significant deterioration of the war makes it impossible for Ukraine to fulfil the conditions attached to the forms of support under this Regulation, the Facility may provide exceptional financing to Ukraine in order to maintain its macro-financial stability and to foster the achievement of the objectives set out in Article 3. Such exceptional financing shall be granted for individual periods of up to three months and shall cease as soon as the fulfilment of the conditions becomes possible again. Financing under this Article may be granted in addition to and during the same period of exceptional bridge financing granted under Article 25.
2. For the purpose of paragraph 1, where the Commission finds that it is impossible for Ukraine to fulfil the conditions attached to support provided under this Regulation due to such duly justified exceptional circumstances, it may submit to the Council a proposal for an implementing decision providing for exceptional financing to Ukraine under the Facility. The Council shall act, as a rule, within one month of receiving the Commission’s proposal.
3. The exceptional financing shall be subject to the precondition set out in Article 5(1) and shall be financed within the resources referred to in Article 6(1), first subparagraph, point (a), and (2).
4. The implementing decision referred to in paragraph 2 shall set out the audit, control, monitoring and reporting rules, as well as the conditions and modalities for the exceptional financing.
Source: EUR-Lex (Publications Office of the EU), © European Union, reuse permitted under Commission Decision 2011/833/EU.
