Annexes to COM(2023)338 - Establishing the Ukraine Facility - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2023)338 - Establishing the Ukraine Facility. |
|---|---|
| document | COM(2023)338 |
| date | February 29, 2024 |
The control strategy will be adapted to the implementation under each of these pillars with use of monitoring, evaluation and audits.
Special attention will be paid to implementation by Ukraine of the funds made available under Pillar I. Payments will occur according to a fixed quarterly schedule, based on payment requests submitted by Ukraine and following verification by the Commission of the fulfilment of the relevant conditionalities. The quarterly frequency of payment windows will ensure both predictability of support to Ukraine and a constant policy dialogue between the Commission and Ukraine.
The multilayer structure of the control mechanisms in place (see also section 2.3) provides an integrated framework to ensure that all the appropriate measures to protect the financial interests of the Union are in place. It will guarantee that the principle of proportionality is taken into account and the specific conditions under which the Facility will operate.
2.2.2. Information concerning the risks identified and the internal control system(s) set up to mitigate them
The main risk identified in relation to the financing relates to the non-achievement of conditions associated to the disbursement of funding.
The measures that will be put in place to mitigate this risk are the following:
- assessment by the Commission of the fulfilment of relevant conditions before the disbursement of funds, with possibility of withholding the funds;
- reduction of support provided, or recovery of any amount spent to achieve the objectives of the Facility, in cases of irregularities, fraud, corruption and conflicts of interests affecting the financial interests of the Union that have not been corrected by Ukraine, or of a serious breach of an obligation resulting from the agreements concluded with Ukraine
- suspension of funding in the event that Ukraine fails to fulfil the precondition set out in Article 5.
2.2.3. Estimation and justification of the cost-effectiveness of the controls (ratio of "control costs ÷ value of the related funds managed"), and assessment of the expected levels of risk of error (at payment & at closure)
Financial contribution will be provided to Ukraine in the form of financing not linked to cost referred to in point (a) of Article 125(1) of the Financial Regulation.
2.3. Measures to prevent fraud and irregularities
Specify existing or envisaged prevention and protection measures, e.g. from the Anti-Fraud Strategy.
The proposal contains specific provisions for the protection of the financial interests of the Union. The Facility will be equipped with a strong system of audit and controls set out in a multilayer mechanism: first, the reform of the audit and control systems of the Ukrainian State will be needed as part of the reforms under the Ukraine Plan; second, the Commission will be able to carry out checks of the implementation of the funds spent in relation with the Plan at any moment of the project cycle; third, an independent Audit Board will report to the Commission on possible mismanagement of funds under the whole Facility.
3. ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE
3.1. Multiannual financial framework- expenditure budget line(s) affected
- New budget lines requested
| Over and above MFF ceilings | Budget line | Type of expenditure | Contribution | |||
| Number | Diff./Non-diff. | from EFTA countries | from candidate countries and potential candidates | from other third countries | other assigned revenue | |
| O | 16.0106- Support expenditure for the Ukraine Facility | NDA | YES | p.m. | YES | YES |
| O | 16.06- Ukraine Facility | DA | YES | p.m. | YES | YES |
3.2. Estimated financial impact of the proposal on appropriations
3.2.1. Summary of estimated impact on operational appropriations
- The proposal/initiative does not require the use of operational appropriations
- The proposal/initiative requires the use of operational appropriations, as explained below:
| Heading of multiannual financial framework | 7 | ‘Administrative expenditure’ |
EUR million (to three decimal places)
| Year 2024 | Year 2025 | Year 2026 | Year 2027 | TOTAL | |||
| DG: NEAR | |||||||
| □ Human resources | 2,453 | 2,453 | 2,453 | 2,453 | 9,811 | ||
| □ Other administrative expenditure | 0,238 | 0,238 | 0,238 | 0,238 | 0,952 | ||
| TOTAL DG NEAR | Appropriations | 2,691 | 2,691 | 2,691 | 2,691 | 10,763 |
| TOTAL appropriations under HEADING 7 of the multiannual financial framework | (Total commitments = Total payments) | 2,691 | 2,691 | 2,691 | 2,691 | 10,763 |
3.2.3. Summary of estimated impact on administrative appropriations
- The proposal/initiative does not require the use of appropriations of an administrative nature
- The proposal/initiative requires the use of appropriations of an administrative nature, as explained below:
EUR million (to three decimal places)
| Year 2024 26 | Year 2025 | Year 2026 | Year 2027 | TOTAL |
| HEADING 7 of the multiannual financial framework | |||||
| Human resources | 2,453 | 2,453 | 2,453 | 2,453 | 9,811 |
| Other administrative expenditure | 0,238 | 0,238 | 0,238 | 0,238 | 0,952 |
| Subtotal HEADING 7 of the multiannual financial framework | 2,691 | 2,691 | 2,691 | 2,691 | 10,763 |
| Outside HEADINGS 1727 of the multiannual financial framework | |||||
| Human resources | 16,224 | 16,224 | 16,224 | 16,224 | 64,896 |
| Other expenditure of an administrative nature | 26,970 | 26,970 | 26,970 | 26,970 | 107,880 |
| Subtotal outside HEADINGS 1-7 of the multiannual financial framework | 43,194 | 43,194 | 43,194 | 43,194 | 172,776 |
| TOTAL | 45,885 | 45,885 | 45,885 | 45,885 | 183,538 |
The appropriations required for human resources and other expenditure of an administrative nature will be met by appropriations from the DG that are already assigned to management of the action and/or have been redeployed within the DG, together if necessary with any additional allocation which may be granted to the managing DG under the annual allocation procedure and in the light of budgetary constraints.
3.2.3.1. Estimated requirements of human resources
- The proposal/initiative does not require the use of human resources.
- The proposal/initiative requires the use of human resources, as explained below:
Estimate to be expressed in full time equivalent units
| Year 2024 | Year 2025 | Year 2026 | Year 2027 | |||
| □ Establishment plan posts (officials and temporary staff) | ||||||
| 20 01 02 01 (Headquarters and Commission’s Representation Offices) | 11 | 11 | 11 | 11 | ||
| 20 01 02 03 (Delegations) | 2 | 2 | 2 | 2 | ||
| 01 01 01 01 (Indirect research) | ||||||
| 01 01 01 11 (Direct research) | ||||||
| Other budget lines (specify) | ||||||
| □ External staff (in Full Time Equivalent unit: FTE)28 | ||||||
| 20 02 01 (AC, END, INT from the ‘global envelope’) | ||||||
| 20 02 03 (AC, AL, END, INT and JPD in the delegations) | ||||||
| 16.0106- Support expenditure for the Ukraine Facility29 | - at Headquarters | 68 | 68 | 68 | 68 | |
| - in Delegations | 54 | 54 | 54 | 54 | ||
| Other budget lines (specify) | ||||||
| TOTAL | 135 | 135 | 135 | 135 |
The human resources required will be met by staff from the DG who are already assigned to management of the action and/or have been redeployed within the DG, together if necessary with any additional allocation which may be granted to the managing DG under the annual allocation procedure and in the light of budgetary constraints.
Description of tasks to be carried out:
| Officials and temporary staff | The FTEs sought will work on the policy development, legal issues, with particular focus on procurement matters, financial management, contract management, audit and evaluation. |
| External staff | The FTEs sought will work on the policy development, legal issues, with particular focus on procurement matters, financial management, contract management, audit and evaluation. |
3.2.4. Compatibility with the current multiannual financial framework
The proposal/initiative:
- can be fully financed through redeployment within the relevant heading of the Multiannual Financial Framework (MFF).
Explain what reprogramming is required, specifying the budget lines concerned and the corresponding amounts. Please provide an excel table in the case of major reprogramming.
- requires use of the unallocated margin under the relevant heading of the MFF and/or use of the special instruments as defined in the MFF Regulation.
Explain what is required, specifying the headings and budget lines concerned, the corresponding amounts, and the instruments proposed to be used.
- requires a revision of the MFF.
This new legislative proposal for the Ukraine Facility is accompanied by a proposal for a Council Regulation COM(2023) 337, amending Regulation 2020/2093 laying down the multiannual financial framework (MFF) for the years 2021 to 2027. The amendment of that Regulation is necessary to a) establish the Ukraine Reserve for 2024-2027 to provide financing to this Facility in support in forms other than loans as well as b) to provide a guarantee by the EU budget for the support in the form of loans. Both type of support are accounted for over and above the MFF expenditure ceilings.
3.2.5. Third-party contributions
The proposal/initiative:
- does not provide for co-financing by third parties
- provides for the co-financing by third parties estimated below:
Appropriations in EUR million (to three decimal places)
3.3. Estimated impact on revenue
- The proposal/initiative has no financial impact on revenue.
- The proposal/initiative has the following financial impact:
- on own resources
- on other revenue
- please indicate, if the revenue is assigned to expenditure lines ⌧
EUR million (to three decimal places)
| Budget revenue line: | Appropriations available for the current financial year | Impact of the proposal/initiative30 | ||||||
| Year N | Year N+1 | Year N+2 | Year N+3 | Enter as many years as necessary to show the duration of the impact (see point 1.6) | ||||
| Article …………. | p.m. | p.m. | p.m. | p.m. | p.m. | p.m. | p.m. |
1This figure includes around EUR 7.8 billion of the assistance provided by Member States (excluding military support) according to the last update at the end of January 2023.
2Rapid Damage and Needs Assessment (RDNA 2).
3COM(2022) 233 final
4EUCO 21/22
5EUCO 24/22
6Council Regulation (EC) No 1257/96 of 20 June 1996 concerning humanitarian aid
7Regulation (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)
8Ukraine Rapid Damage and Needs Assessment: February 2022 - February 2023 (English). Washington, D.C.: World Bank Group. http://documents.worldbank.org/curated/en/099184503212328877/P1801740d1177f03c0ab180057556615497
9COM(2023) 337 final
10European Council Conclusions, 23-24 June 2022; EUCO 24/22.
11Regulation (EU) 2022/2463 of the European Parliament and of the Council of 14 December 2022 establishing an instrument for providing support to Ukraine for 2023 (macro-financial assistance +); (OJ L 322, 16.12.2022, p. 1–14).
12Regulation (EU) 2021/947 of the European Parliament and of the Council of 9 June 2021 establishing the Neighbourhood, Development and International Cooperation Instrument – Global Europe, amending and repealing Decision No 466/2014/EU and repealing Regulation (EU) 2017/1601 and Council Regulation (EC, Euratom) No 480/2009 (OJ L 209, 14.6.2021, p. 1).
13Council Decision (CFSP) 2021/509 of 22 March 2021 establishing a European Peace Facility, and repealing Decision (CFSP) 2015/528, (OJ L 102 24.3.2021, p. 14).
14Decision No 1313/2013/EU of the European Parliament and of the Council of 17 December 2013 on a Union Civil Protection Mechanism (OJ L 347, 20.12.2013, p. 924–947).
15Regulation (EU) 2021/836 of the European Parliament and of the Council of 20 May 2021 amending Decision No 1313/2013/EU on a Union Civil Protection Mechanism (OJ L 185, 26.5.2021, p. 1).
16Rapid Damage and Needs Assessment, prepared by the World Bank, European Commission and United Nations. See World Bank Document.
17COM(2023)337 final.
18Ibidem.
19Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union, amending Regulations (EU) No 1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014, and Decision No 541/2014/EU and repealing Regulation (EU, Euratom) No 966/2012 (OJ L 193 30.7.2018, p. 1).
20COM(2023) 337 final
21Regulation (EU) No 182/2011 of the European Parliament and of the Council of 16 February 2011 laying down the rules and general principles concerning mechanisms for control by the Member States of the Commission's exercise of implementing powers (OJ L 55, 28.2.2011, p. 13).
22Regulation (EU) 2021/1529 of the European Parliament and of the Council of 15 September 2021 establishing the Instrument for Pre-Accession assistance (IPA III) (OJ L 330, 20.9.2021, p. 1).
23As referred to in Article 58(2)(a) or (b) of the Financial Regulation.
24COM(2023) 337 final
25Details of budget implementation methods and references to the Financial Regulation may be found on the BUDGpedia site: https://myintracomm.ec.europa.eu/corp/budget/financial-rules/budget-implementation/Pages/implementation-methods.aspx
26Year 2024 is the year in which implementation of the proposal/initiative starts.
27Technical and/or administrative assistance and expenditure in support of the implementation of EU programmes and/or actions (former ‘BA’ lines), indirect research, direct research.
28AC= Contract Staff; AL = Local Staff; END= Seconded National Expert; INT = agency staff; JPD= Junior Professionals in Delegations.
29Sub-ceiling for external staff covered by operational appropriations of the Ukraine Facility (former ‘BA’ lines).
30As 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.
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