ANNEX 2
LEGISLATIVE FINANCIAL AND DIGITAL STATEMENT
1.
FRAMEWORK OF THE PROPOSAL/INITIATIVE
6
1.1.
Title of the proposal/initiative
6
1.2.
Policy area(s) concerned
6
1.3.
Objective(s)
6
1.3.1.
General objective(s)
6
1.3.2.
Specific objective(s)
6
1.3.3.
Expected result(s) and impact
6
1.3.4.
Indicators of performance
6
1.4.
The proposal/initiative relates to:
6
1.5.
Grounds for the proposal/initiative
7
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
7
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.
7
1.5.3.
Lessons learned from similar experiences in the past
7
1.5.4.
Compatibility with the multiannual financial framework and possible synergies with other appropriate instruments
8
1.5.5.
Assessment of the different available financing options, including scope for redeployment
8
1.6.
Duration of the proposal/initiative and of its financial impact
8
1.7.
Method(s) of budget implementation planned
8
2.
MANAGEMENT MEASURES
9
2.1.
Monitoring and reporting rules
9
2.2.
Management and control system(s)
9
2.2.1.
Justification of the budget implementation method(s), the funding implementation mechanism(s), the payment modalities and the control strategy proposed
9
2.2.2.
Information concerning the risks identified and the internal control system(s) set up to mitigate them
9
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)
9
2.3.
Measures to prevent fraud and irregularities
10
3.
ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE
10
3.1.
Heading(s) of the multiannual financial framework and expenditure budget line(s) affected
10
3.2.
Estimated financial impact of the proposal on appropriations
10
3.2.1.
Summary of estimated impact on operational appropriations
10
3.2.1.1.
Appropriations from voted budget
11
3.2.2.
Estimated output funded from operational appropriations
12
3.2.3.
Summary of estimated impact on administrative appropriations
13
3.2.3.1.
Appropriations from voted budget
13
3.2.4.
Estimated requirements of human resources
13
3.2.4.1.
Financed from voted budget
13
3.2.5.
Overview of estimated impact on digital technology-related investments
14
3.2.6.
Compatibility with the current multiannual financial framework
15
3.2.7.
Third-party contributions
15
3.3.
Estimated impact on revenue
15
4.
DIGITAL DIMENSIONS
15
4.1.
Requirements of digital relevance
15
4.2.
Data
16
4.3.
Digital solutions
16
4.4.
Interoperability assessment
16
4.5.
Measures to support digital implementation
16
1. FRAMEWORK OF THE PROPOSAL/INITIATIVE
1.1. Title of the proposal/initiative
Recommendation for a Council Decision authorising the European Commission to participate, on behalf of the European Union, in negotiations on the international agreement establishing the International Claims Commission for Ukraine.
1.2. Policy area(s) concerned
Justice
Financial and technical assistance to third countries
1.3. Objective(s)
1.3.1. General objective(s)
The present proposal has the main objective of authorising the Commission to participate, on behalf of the Union, in the negotiations of the international instrument on the setting up of the Claims Commission. The establishment of a Claims Commission will play a critical role in supporting and enforcing international justice for Ukraine as it constitutes an integral part of an international compensation mechanism for victims of the aggression of the Russian Federation against Ukraine.
1.3.2. Specific objective(s)
1.
To ultimately provide the necessary assitance to Ukraine to ensure that the Russian Federation bears the legal consequences of its internationally wrongful acts against Ukraine including the obligation to make reparation for any damage, loss or injury caused by those acts.
2.
To abide by the Statute of the Register of Damage – in which the EU is a Participant – which provides that the Register, including its digital platform with all data about claims and evidence recorded therein, is meant as the first component of the compensation mechanism to be established by a separate international instrument in co-operation with Ukraine and relevant international organisations and bodies.
3.
To establish the International Claims Commission and ensure the Union’s participation therein.
4.
To give the means to the International Claims Commission to review, assess and decide eligible claims recorded in the Register of Damage and determine the amount of compensation due in each case.
1.3.3. Expected result(s) and impact
Specify the effects which the proposal/initiative should have on the beneficiaries/groups targeted.
The International Claims Commission would work as a fact-finding body and review, assess and decide eligible claims recorded in the Register and determine the amount of compensation due in each case.
1.3.4. Indicators of performance
Specify the indicators for monitoring progress and achievements.
The setting up of the International Claims Commission.
1.4. The proposal/initiative relates to:
a new action
□
a new action following a pilot project / preparatory action ( 1 )
□
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
There are two main requirements that can be expected when implementing this initiative. The first one, which is short term, is to formally receive the mandate to participate for the EU in the negotiation process on the setting up of the International Claims Commission. The second one, which is long term, could be assessed only once the International Claims Commission is fully operational. Once this will be case, the efficiency of this instrument could be evaluated against its ability to review, assess and decide eligible claims and determine the amount of compensation due in each case.
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)
The Union reiterated on various occasions its commitment to ensure that the Russian Federation bears the legal consequences of its internationally wrongful acts, including the obligation to make reparation for any damage caused by such acts. This commitment notably echoes the call made by the United National General Assembly 2022 resolution entitled ‘Furtherance of remedy and reparation for aggression against Ukraine’, which recognised the need for the establishment of an international mechanism for reparation for damage, loss or injury arising from Russia’s war of aggression against Ukraine. Answering to this call, on 12 May 2023, the Committee of Ministers of the Council of Europe adopted the Resolution establishing the Enlarged Partial Agreement on the Register of Damage Caused by the Aggression of the Russian Federation against Ukraine. States adopted a stepwise approach, choosing to establish the Register first, to be followed by the other elements of the compensation mechanism, namely a claims commission and a compensation fund. This approach was reflected in the Register’s Statute, where it is acknowledged that the Register, including its digital platform with all data about claims and evidence recorded therein, is meant as the first component of the compensation mechanism to be established by a separate international instrument in co-operation with Ukraine and relevant international organisations and bodies. After initially joining the Register of Damage as a founding Associate Member on 11 May 2023 by means of a Commission Decision, the Union, further to a Council Decision adopted on 22 July 2024, changed its status to a fully-fledged Participant. The Union therefore participates within its own role in the Register, together with and in addition to the Member States (except for Hungary). Such participation allows the Union to stand by its commitment to support Ukraine and contribute to the restoration of a rule-based international legal order. At the same time, it allows the Commission to better coordinate its actions related to reparations with the Member States, thus ensuring that the Union can speak with one voice. The possibility for the Commission to participate in the negotiations of the Claims Commission, and ultimately in the Claims Commission itself once established, is thus the natural continuation and development of the existing status quo.
Expected generated EU added value (ex-post)
By participating in the setting up of the International Claims Commission, the EU would contribute to ensure that the Russian Federation bears the legal consequences of its wrongful acts and that, in such endeavour, the EU can speak with one voice. Whenever necessary, the Commission could ensure coordination with and among Member States in the different phases of the establishment and functioning of the Claims Commission, thus contributing to the efficient management of this new body.
1.5.3. Lessons learned from similar experiences in the past
The main lessons learned in the past draw from previous similar instruments. The UN Compensation Commission (UNCC) is the most relevant precedent, which can give some insights on the design and costs of the Claims Commission for Ukraine. It existed for 31 years (1991 to 2022) but its adjudicative activities lasted 12 years. Due to the groundwork already done by the Register and the technological developments in the last decades, the Claims Commission could have a shorter lifespan than the UNCC, currently estimated at 10 years. The Union did not however participate in the UNCC.
1.5.4. Compatibility with the multiannual financial framework and possible synergies with other appropriate instruments
The Union’s unwavering support to Ukraine reflects a shared commitment to democratic principles and the safeguarding of the rule-based international order and peace in Europe. The present proposal is therefore consistent with other Union policies that aim to support Ukraine and safeguard the international order and peace in Europe, notably in the context of the current Russia’s war of aggression against Ukraine. The objectives of this proposal are supported by Regulation (EU) 2024/792 establishing the Ukraine Facility. Article 34(3) of the latter provides that assistance under Pillar III of the Ukraine Facility ‘shall also strengthen capacities for conflict prevention, peacebuilding and address pre and post-crisis needs, including through, confidence-building measures and processes that promote justice, truth-seeking, comprehensive post-conflict rehabilitation for an inclusive, peaceful society, as well as collection of evidence of crimes committed during the war. Funding for initiatives and bodies involved in supporting and enforcing international justice in Ukraine may be provided under this Chapter’.
1.5.5. Assessment of the different available financing options, including scope for redeployment
Regulation (EU) 2024/792 establishing the Ukraine Facility provides the legal basis for the Union’s contribution to the International Claims Commission until 2027. On the basis of the objectives set out in Regulation (EU) 2024/792, and in particular under Chapter V, Article 34(3) of said Regulation provides that ‘[a]ssistance under this Chapter shall also strengthen capacities for conflict prevention, peacebuilding and address pre- and post-crisis needs, including through, confidence-building measures and processes that promote justice, truth-seeking, comprehensive post-conflict rehabilitation for an inclusive, peaceful society, as well as collection of evidence of crimes committed during the war. Funding for initiatives and bodies involved in supporting and enforcing international justice in Ukraine may be provided under this Chapter’. Therefore, as the instrument setting up the International Claims Commission aims to enforce international justice in Ukraine by contributing to a mechanism that will compensate the damages suffered by Ukraine and its population and caused by the Russian Federation’s violations of international law, Article 34(3) of Regulation (EU) 2024/792 provides for the appropriate legal basis for the Union to provide its financial contribution to the Claims Commission until 2027. The budget line that would cater for this expenditure would be line 16 06 03 01 — Union accession assistance and other measures, whereby in the relative budget remarks it is explained that this item ‘will also cover support for […] other measures that are complementary to EU action, such as accountability mechanisms for Russia’s war of aggression’. The Union’s contribution to the Register of Damage is also covered by the Ukraine Facility.
1.6. Duration of the proposal/initiative and of its financial impact
limited duration
—
in effect from 2025 to 2035 ( 2 )
—
□
financial impact from YYYY to YYYY for commitment appropriations and from YYYY to YYYY for payment appropriations.
□ unlimited duration
—
Implementation with a start-up period from YYYY to YYYY,
—
followed by full-scale operation.
1.7. Method(s) of budget implementation planned ( 3 )
Direct management by the Commission ( 4 )
—
□
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) ( 5 )
—
□
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.
2. MANAGEMENT MEASURES
2.1. Monitoring and reporting rules
Regarding reporting arrangements, the Union’s participation in the negotiations on setting up the Claims Commission shall be conducted in consultation with a special committee within the meaning of Article 218(4) TFEU. The Commission shall regularly report to the special committee on the steps undertaken pursuant to this Decision and consult it on a regular basis. Whenever so requested by the Council, the Commission shall report to it on the conduct and the outcome of the negotiations, including in writing.
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
With regard to the method of implementation, Article 245 of Regulation (EU, Euratom) 2024/2509 of the European Parliament and of the Council ( 6 ) , which enables the Union to pay membership fees to bodies of which the Union is a member, is applicable to the Union’s contribution to the Claims Commission.
2.2.2. Information concerning the risks identified and the internal control system(s) set up to mitigate them
No specific risks have been identified at this stage.
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)
Following the Commission central services' guidance, the cost of the controls at Commission level is assessed by the cost of the different control stages. The overall assessment for each management mode is obtained from the ratio between all those costs and the total amount paid in the year for the related management mode.
2.3. Measures to prevent fraud and irregularities
Standard rules for this type of expenditures apply.
3. ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE
3.1. 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.
Heading of multiannual financial framework
Budget line
Type of expenditure
Contribution
Number
Diff./Non-diff. ( 7 )
from EFTA countries ( 8 )
from candidate countries and potential candidates ( 9 )
From other third countries
other assigned revenue
0
16 06 03 01
Diff.
NO
NO
NO
NO
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
EUR million (to three decimal places)
Heading of multiannual financial framework
0
Expenditure outside the annual ceilings set out in the Multiannual Financial Framework
DG: European Neighbourhood Policy and Enlargement Negotiations
Year
Year
Year
Year
TOTAL MFF 2021-2027
2024
2025
2026
2027
Operational appropriations
16 06 03 01 — Union accession assistance and other measures
Commitments
(1a)
0,000
0,000
3,000
3,000
6,000
Payments
(2a)
0,000
0,000
3,000
3,000
6,000
Appropriations of an administrative nature financed from the envelope of specific programmes ( 10 )
Budget line
(3)
TOTAL appropriations
for DG European Neighbourhood Policy and Enlargement Negotiations
Commitments
=1a+1b+3
0,000
0,000
3,000
3,000
6,000
Payments
=2a+2b+3
0,000
0,000
3,000
3,000
6,000
( 11 )
Year
Year
Year
Year
TOTAL MFF 2021-2027
2024
2025
2026
2027
TOTAL operational appropriations
Commitments
(4)
0,000
0,000
3,000
3,000
6,000
Payments
(5)
0,000
0,000
3,000
3,000
6,000
TOTAL appropriations of an administrative nature financed from the envelope for specific programmes
(6)
0,000
0,000
0,000
0,000
0,000
TOTAL appropriations under HEADING 0
of the multiannual financial framework
Commitments
=4+6
0,000
0,000
3,000
3,000
6,000
Payments
=5+6
0,000
0,000
3,000
3,000
6,000
3.2.2. Estimated output funded from operational appropriations (not to be completed for decentralised agencies)
Commitment appropriations in EUR million (to three decimal places)
Indicate objectives and outputs
Year
2024
Year
2025
Year
2026
Year
2027
Enter as many years as necessary to show the duration of the impact (see Section1.6)
TOTAL
OUTPUTS
Type ( 12 )
Average cost
No
Cost
No
Cost
No
Cost
No
Cost
No
Cost
No
Cost
No
Cost
Total No
Total cost
SPECIFIC OBJECTIVE No 1 ( 13 ) …
—
Output
—
Output
—
Output
Subtotal for specific objective No 1
SPECIFIC OBJECTIVE No 2 …
—
Output
Subtotal for specific objective No 2
TOTALS
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
Year
Year
Year
TOTAL 2021 - 2027
2024
2025
2026
2027
HEADING 7
Human resources
0,000
0,000
0,000
0,000
0,000
Other administrative expenditure
0,000
0,000
0,000
0,000
0,000
Subtotal HEADING 7
0,000
0,000
0,000
0,000
0,000
Outside HEADING 7
Human resources
0,000
0,000
0,000
0,000
0,000
Other expenditure of an administrative nature
0,000
0,000
0,000
0,000
0,000
Subtotal outside HEADING 7
0,000
0,000
0,000
0,000
0,000
TOTAL
0,000
0,000
0,000
0,000
0,000
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
Year
Year
Year
2024
2025
2026
2027
—
Establishment plan posts (officials and temporary staff)
20 01 02 01 (Headquarters and Commission’s Representation Offices)
0
0
0
0
20 01 02 03 (EU Delegations)
0
0
0
0
01 01 01 01 (Indirect research)
0
0
0
0
01 01 01 11 (Direct research)
0
0
0
0
Other budget lines (specify)
0
0
0
0
—
External staff (inFTEs)
20 02 01 (AC, END from the ‘global envelope’)
0
0
0
0
20 02 03 (AC, AL, END and JPD in the EU Delegations)
0
0
0
0
Admin. Support line
[XX.01.YY.YY]
—
at Headquarters
0
0
0
0
—
in EU Delegations
0
0
0
0
01 01 01 02 (AC, END - Indirect research)
0
0
0
0
01 01 01 12 (AC, END - Direct research)
0
0
0
0
Other budget lines (specify) - Heading 7
0
0
0
0
Other budget lines (specify) - Outside Heading 7
0
0
0
0
TOTAL
0
0
0
0
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 plan posts
N/A
External staff (CA, SNEs, INT)
Description of tasks to be carried out by:
Officials and temporary staff
External staff
3.2.5. Overview of estimated impact on digital technology-related investments
TOTAL Digital and IT appropriations
Year
Year
Year
Year
TOTAL MFF 2021 - 2027
2024
2025
2026
2027
HEADING 7
IT expenditure (corporate)
0,000
0,000
0,000
0,000
0,000
Subtotal HEADING 7
0,000
0,000
0,000
0,000
0,000
Outside HEADING 7
Policy IT expenditure on operational programmes
0,000
0,000
0,000
0,000
0,000
Subtotal outside HEADING 7
0,000
0,000
0,000
0,000
0,000
TOTAL
0,000
0,000
0,000
0,000
0,000
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)
Regulation (EU) 2024/792 establishing the Ukraine Facility provides for the legal basis for the Union’s contribution to the International Claims Commission until 2027. On the basis of the objectives set out in Regulation (EU) 2024/792, and in particular under Chapter V, Article 34(3) of said Regulation provides that ‘[a]ssistance under this Chapter shall also strengthen capacities for conflict prevention, peacebuilding and address pre- and post-crisis needs, including through, confidence-building measures and processes that promote justice, truth-seeking, comprehensive post-conflict rehabilitation for an inclusive, peaceful society, as well as collection of evidence of crimes committed during the war. Funding for initiatives and bodies involved in supporting and enforcing international justice in Ukraine may be provided under this Chapter’. Therefore, as the instrument setting up the Claims Commission aims to enforce international justice in Ukraine by contributing to a mechanism that will compensate the damages suffered by Ukraine and its population and caused by the Russian Federation’s violations of international law, Article 34(3) of Regulation (EU) 2024/792 provides for the appropriate legal basis for the Union to provide its financial contribution to the International Claims Commission until 2027.
—
□
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:
3.3. Estimated impact on revenue
—
The proposal/initiative has no financial impact on revenue.
—
□
The proposal/initiative has the following financial impact:
□
on own resources
□
on other revenue
□
please indicate, if the revenue is assigned to expenditure lines
EUR million (to three decimal places)
4. DIGITAL DIMENSIONS
Not applicable.
4.1. Requirements of digital relevance
Not applicable.
4.2. Data
Not applicable.
4.3. Digital solutions
Not applicable.
4.4.
Interoperability assessment
Not applicable.
4.5. Measures to support digital implementation
Not applicable.
( 1 ) As referred to in Article 58(2), point (a) or (b) of the Financial Regulation.
( 2 ) The lifetime of the International Claims Commission is currently estimated at 10 years.
( 3 ) Details of budget implementation methods and references to the Financial Regulation may be found on the BUDGpedia site: https://commission.europa.eu/funding-tenders/find-funding/funding-management-mode_en .
( 4 ) This contribution will be made via the payment of a membership fee under Article 245 of 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 (recast), OJ L, 2024/2509, 26.9.2024, ELI: http://data.europa.eu/eli/reg/2024/2509/oj . This is an instrument under direct management.
( 5 ) It is expected that International Claims Commission itself will take care of the budget implementation tasks.
( 6 ) Regulation (EU, Euratom) 2024/2509 of the European Parliament and of the Council 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 ).
( 7 ) Diff. = Differentiated appropriations / Non-diff. = Non-differentiated appropriations.
( 8 ) EFTA: European Free Trade Association.
( 9 ) Candidate countries and, where applicable, potential candidates from the Western Balkans.
( 10 ) Technical and/or administrative assistance and expenditure in support of the implementation of EU programmes and/or actions (former ‘BA’ lines), indirect research, direct research.
( 11 ) The estimated annual EU’s contribution is likely to range between EUR 2 million and EUR 3 million.
( 12 ) Outputs are products and services to be supplied (e.g. number of student exchanges financed, number of km of roads built, etc.).
( 13 ) As described in Section 1.3.2. ‘Specific objective(s)’
( 14 ) Please specify below the table how many FTEs within the number indicated are already assigned to the management of the action and/or can be redeployed within your DG and what are your net needs.