Changes from adopted text to adopted text

Removed11. The European Fund for Sustainable Development Plus+ risk management framework referred to in Articles 33(7) and (8) of Regulation (EU) 2021/947 shall apply to the Ukraine Guarantee. The overall risk profile of operations covered by the Ukraine Guarantee may be different from the overall risk profile of the External Action Guarantee. The Commission shall ensure that the risk entailed by the guaranteed operations does not exceed the capacity of the Union budget to bear those risks as determined by the available budgetary resources and the provisioning rate referred to in Article 31(1) of this Regulation.

Removed1. The provisioning rate for the Ukraine Guarantee shall initially be 70%, to be provisioned from the Union budget through a specific budget line.

RemovedBy derogation from Article 211(2), second sentence of the second subparagraph of Regulation (EU, Euratom) 2018/1046, the provisioning shall be constituted until 31 December 2027 and be equal to the amount of provisioning corresponding to the Ukraine guarantee granted and may be constituted gradually to reflect the progress in selection and implementation of the financing and investment operations supporting the objectives of the Facility.

Removed2. The provisioning rate shall be reviewed at least once a year following the entry into force of this Regulation.

Removed3. The Commission is empowered to adopt a delegated act in accordance with Article 38 to amend the provisioning rate while applying the criteria set out in Article 211(2) of the Regulation (EU, Euratom) 2018/1046, and, where relevant, to increase or decrease the maximum amount of guarantee referred to in Article 30(1) of this Regulation ▌. The Commission may only increase the maximum amount of the guarantee if the provisioning rate is decreased. Without prejudice to Article 30(3), the Commission may provide that the increased amount of the guarantee shall be available for signature of guarantee agreements gradually over three years.

Removed4. By way of derogation from Article 213 of Regulation (EU, Euratom) 2018/1046, the effective provisioning rate shall not apply to the provisioning set aside in the common provisioning fund in respect of the Ukraine Guarantee.

RemovedIn view of possible grievances of third parties, including communities and individuals affected by projects supported by the Ukraine Guarantee, the Commission and the European Union delegation in Ukraine shall publish on their websites direct references to the complaints mechanisms of the relevant counterparts that have concluded Guarantee agreements with the Commission. The Commission shall also provide the possibility of directly receiving complaints related to the treatment of grievances by eligible counterparts. The Commission shall take information received through any complaints into account in view of future cooperation with those counterparts.

RemovedThe Commission shall publish on its webportal information on financing and investment operations and the essential elements of the Ukraine Guarantee agreements, including information on the legal identity of eligible counterparts, expected development benefits and complaints procedures, taking into account the protection of confidential and commercially sensitive information.

RemovedIn accordance with their transparency policies and Union rules on data protection and on access to documents and information, eligible counterparts shall proactively and systematically make publicly available on their websites information relating to all financing and investment operations covered by the Ukraine Guarantee, in particular information relating to the manner in which those operations contribute to the achievement of the objectives and requirements of this Regulation. Where possible, such information shall be broken down at project level. Such information shall take into account the protection of confidential and commercially sensitive information. Eligible counterparts shall also publicise Union support in all information that they publish on financing and investment operations covered by the Ukraine Guarantee in accordance with this Regulation.

RemovedPillar III: Union accession assistance and support measures

Removed1. Assistance under this Chapter shall support Ukraine in attaining the objectives set out in Article 3. In particular, assistance provided under this Chapter shall aim to support Ukraine’s progressive alignment to Union ‘acquis’ with a view to future Union membership, thereby contributing to mutual stability, security, peace and prosperity. Such support shall include strengthening of the rule of law, democracy, respect of human rights and fundamental freedoms, reinforcing of the effectiveness of public administration and institutional capacities, decentralisation, and supporting transparency, structural reforms, sectoral policies and good governance at all levels. Such support should also contribute to the implementation of the Plan.

Removed2. Assistance under this Chapter shall also be provided to ensure that capacities of stakeholders, including social partners, civil society organisations and local and regional authorities are strengthened, including through twinning and town twinning, as well as through promotion of peer-to-peer cooperation and programs embedded in partnerships between European and Ukrainian cities and regions.

Removed3. Assistance under this Chapter shall also support confidence-building measures and processes that promote justice, truth-seeking, payments by the Russian Federation for the damages caused as well as collection of evidence of crimes committed by Russia, its allies and proxies during the war for the purpose of the prosecution of the crimes committed by Russia during its war of aggression against Ukraine. Funding for initiatives and bodies involved in supporting and enforcing international justice in Ukraine may be provided under this Chapter. The findings retrieved as a result of such measures shall be brought to the knowledge of the European Parliament, the Council and the Commission.

Removed4. Assistance under this Chapter shall support the creation and strengthening of Ukrainian authorities responsible for ensuring appropriate use of funds, audit and effective fight against mismanagement of public funding, in particular fraud, corruption and high level corruption, oligarchic structures, conflict of interests and irregularities incurred in relation to any amount spent to achieve the objectives of the Facility.

Removed5. The functioning of the Audit Board as referred to in Article 34 shall be funded under this Chapter.

Removed6. The borrowing costs subsidy referred to in Article 22 shall be funded under this Chapter.

RemovedProtection of the financial interests of the Union

Removed1. In implementing the Facility, the Commission and Ukraine shall take all the appropriate measures to protect the financial interests of the Union, taking into account the principle of proportionality and the specific conditions under which the Facility will operate, the precondition set out in Article 5(1) and conditions set out in the framework agreement and specific financing or loan agreements, in particular regarding the prevention, detection and correction of fraud, corruption, conflicts of interests and irregularities, as well as the investigation and prosecution of criminal offences affecting the funds provided under the Facility. Ukraine shall commit to progressing towards a robust legal framework to fight fraud by means of criminal law, effective and efficient management and control systems and ensure that amounts wrongly paid or incorrectly used can be recovered. Ukraine shall also commit to ensure that the competent Ukrainian authorities treat, without delay, mutual legal assistance requests and extradition requests by the EPPO and Member States’ competent authorities concerning criminal offences affecting the funds under the Facility.

Removed2. The agreements referred to in Articles 9, 10 and 21 shall provide for the obligations of Ukraine:

Removed(a) to regularly check that the financing provided has been used in accordance with the applicable rules, in particular regarding the prevention, detection and correction of fraud, oligarchic structures, corruption, conflicts of interests and irregularities or any other illegal activity affecting the financial interests of the Union;

Removed(aa) to protect whistleblowers;

Removed(b) to take appropriate measures to prevent, detect and correct fraud, corruption, conflicts of interests and irregularities, as well as to investigate and prosecute criminal offences affecting the financial interests of the Union, to detect and avoid double funding and to take legal actions to recover funds that have been misappropriated, including in relation to any measure for the implementation of reforms and investment projects under the Ukraine Plan and to take appropriate measures to treat mutual legal assistance requests by the EPPO and Member States’ competent authorities concerning criminal offences affecting the funds under the Facility, without delay; where applicable, the competent Ukrainian authorities shall report any criminal conduct affecting the funds under the Facility to the EPPO;

Removed(c) to accompany a request for payment as set out in Chapter III by a declaration that the funds were used in accordance with the principle of sound financial management and for their intended purpose and managed appropriately in particular in accordance with Ukrainian rules complemented by international standards, on prevention, detection and correction of irregularities, fraud, corruption and conflicts of interests accompanied by a declaration of assurance by the Ukrainian authorities;

Removed(ca) to use the Early Detection and Exclusion System;

Removed(d) for the purpose of paragraph 1 of this Article, in particular for checks on the use of funds in relation to the implementation of reforms and investments of the Ukraine Plan, to ensure the collection of, and access to, adequate data on persons and entities receiving funding for the implementation of measures of the Ukraine Plan under chapter III of the Facility;

Removed(e) to expressly authorise the Commission, OLAF and the Court of Auditors to exert their rights as provided for in Article 129(1) of Regulation (EU, Euratom) 2018/1046, in application of the principle of proportionality;

Removed(ea) to provide a similar level of access to information and authority to carry out on-the-spot controls as the Commission and the Court of Auditors to the independent external auditor appointed by the Audit Board.

Removed3. The Commission shall ▌make available to Ukraine an integrated and interoperable information and monitoring system including a single data-mining and risk-scoring tool to access and analyse the relevant data, including the data listed in paragraph 2(d). Where such a system is available, Ukraine shall use and feed the relevant data into the system, including with support referred to under Chapter V. Data shall allow the Commission and other audit authorities to fulfil their duties without undue delay. The system shall allow for downloads in a machine-readable format.

Removed4. The agreements referred to in Articles 9, 10 and 21 shall also provide for the right of the Commission to reduce proportionately the support provided under the Facility and recover any amount spent to achieve the objectives of the Facility or to ask for early repayment of the loan, in cases of serious deterioration of rule of law or 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 such agreements. When deciding on the amount of the recovery and reduction, or the amount to be repaid early, the Commission shall respect the principle of proportionality and shall take into account the seriousness of the irregularity, fraud, corruption or conflict of interests affecting the financial interests of the Union, or of a breach of an obligation. Ukraine shall be given the opportunity to present its observations before the reduction is made or early repayment is requested.

Removed5. Persons and entities implementing funds under the Facility shall report any suspected or actual cases, of fraud, corruption, conflict of interests and irregularities or other illegal activities affecting financial interests of the Union without delay, to the Audit Board referred to in Article 34, the Commission, OLAF, and, where applicable, the EPPO.

Removed5a. Persons and entities implementing funds under the Facility, as well as persons knowledgeable about the implementation process, shall be able to report the cases of alleged corruption, fraud, irregularities and maladministration through a dedicated digital tool, with the relevant whistleblower protection provisions.

RemovedArticle 33a Physical and cyber protection of investments made with Union financial support

Removed1. The agreements referred to in Articles 9, 10 and 21 shall provide for the obligation of Ukraine to identify physical and cyber protection measures for each of the investments made with Union financial support. An appropriate amount of the Union financial support may be set aside for physical and cyber protection purposes, and the necessary restrictions shall apply in accordance with Article 11(7) point (b).

Removed2. Until the cessation of hostilities, physical protection may include measures to protect against munitions and missiles and their effects, including through means delivering kinetic effects. Such means shall be operated under the auspices of the state authorities of Ukraine and may not be used for the purpose of doing harm to persons.

Removed1. The Commission shall establish an Audit Board before the submission by Ukraine of the first payment request.

Removed2. The Audit Board shall be composed of independent members appointed by the Commission. Representatives of Member States and other donors may be invited by the Commission to participate in the activities of the Audit Board.

Removed2a. At least one-fifth of the Audit Board should be composed of Ukrainian nationals, given they have proven high professional competence and integrity and have no personal or professional affiliation to Ukrainian authorities or officials as well as demonstrably independent international experts with a proven track record of understanding of Ukraine’s economy and political system.

Removed3. The Audit Board shall exercise its functions in complete objectivity and operate in compliance with best applicable international practices and standards. It shall act without prejudice to the powers of the Commission, OLAF, the Court of Auditors and ▌ the EPPO.

Removed3a. The Audit Board shall appoint an independent external auditor that provides an annual statement of assurance on the declarations by the Ukrainian authorities that accompany a request for payment. It shall also approve the annual work plan of the independent external auditor.

Removed3b. The Audit Board shall decide on recommendations to the Commission and the Ukrainian authorities on amounts to be recovered following the findings of the independent external auditor, and inform the Commission and the Ukrainian authorities of those recommendations.

Removed4. The Audit Board shall ensure regular dialogue and cooperation with the European Court of Auditors, as well as the Audit Chamber of Verkhovna Rada.

Removed5. In carrying out their duties, the Audit Board, its members and its staff shall neither seek nor take instructions from the Ukrainian government or any institution, body, office or agency. Strong guarantees of independence shall apply for the selection of its staff, management and budget.

Removed6. The Audit Board shall assist the Commission in fighting mismanagement of Union funding under the Facility and, in particular fraud, corruption, conflict of interests and irregularities incurred in relation to any amount spent to achieve the objectives of the Facility.

Removed7. For that purpose, the Audit Board shall regularly report to the Commission and the relevant committees of the European Parliament and the Council, and transmit to the Commission without delay any information it obtains or is made aware of, on any identified cases of, or serious concerns in relation to, mismanagement of public funding incurred in relation with any amount spent to achieve the objectives of the Facility, including its performance.

RemovedIn accordance with Article 24(1) of Regulation (EU) 2017/1939, the Audit Board shall report to the EPPO any criminal conduct in respect of which the latter could exercise its competence.

RemovedIn addition, the Audit Board shall adopt recommendations to Ukraine on all cases where in its views competent Ukrainian authorities have not taken the necessary steps to prevent, detect and correct fraud, corruption, conflict of interests and irregularities that have affected or seriously risk affecting the sound financial management of the expenditure financed under the Facility and in all cases where it identifies weaknesses affecting the design and functioning of the control system put in place by Ukrainian authorities. A summary of the recommendation shall be published by the Audit Board. Ukraine shall implement such recommendations in a timely fashion. In exceptional cases, a request may be made for an extension of time in which to implement the recommendations, but in all cases this shall not exceed six months after the initial recommendation was made. The information provided by the Ukrainian authorities on the recommendations shall also be published by the Audit Board.

RemovedThe reports of, and information from, the Audit Board shall also be sent to OLAF and, where applicable, to the EPPO, and may be shared with the relevant Ukrainian authorities, especially in case they need to take steps to prevent, detect and correct fraud, corruption, conflict of interests and irregularities, as well as to investigate and prosecute criminal offences affecting the financial interests of the Union.

Removed8. The Audit Board shall have access to information, databases and registries required to carry out its tasks. The framework agreement referred to in Article 9 shall define rules and details for the access to relevant information by the Audit Board and the provision of relevant information by Ukraine to the Audit Board.

Removed9. The Audit Board may assist the Commission in supporting Ukraine with capacity building activities in the field of fight against mismanagement of public funding.

Removed10. The functioning of the Audit Board shall be funded under Chapter V, including the funding for the appointed independent external auditor.

Removed1. The Commission shall transmit the framework agreement, concluded between the Commission and Ukraine, the Ukraine Plan, submitted by Ukraine, simultaneously and on equal terms to the European Parliament and the Council without undue delay.

Removed2. Information transmitted by the Commission to the Council in the context of this Regulation or its implementation shall simultaneously be transmitted to the European Parliament, subject to confidentiality arrangements if necessary. Relevant outcomes of discussions held in Council shall be shared with the competent committees of the European Parliament.

Removed3. The Commission shall provide the competent committees of the European Parliament with an overview of its preliminary findings concerning the satisfactory fulfilment of the relevant conditions referred to in Article 15.

Removed4. The competent committee of the European Parliament may invite the Commission and the head of the established Audit Board, referred to in Article 34, to provide information on the state of play of the assessment of the Facility in the context of the Reconstruction and Pre-accession Dialogue referred to in Article 34b.

Removed1. 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(s) of the European Parliament may invite the Commission and other relevant stakeholders, such as in particular the Audit Board, referred to in Article 34a, at least every four months, to discuss the following matters:

Removed(a) the state of reconstruction and accession-related reforms in Ukraine, as well as the measures adopted under this Regulation;

Removed(b) the Ukraine Plan and the assessment of the Ukraine Plan;

Removed(c) the main findings of the review report referred to in Article 36(4);

Removed(d) the status of fulfilment of the conditions of the Ukraine Plan;

Removed(e) progress in fulfilling the accession criteria;