On July 17, the European Commission confirmed a positive assessment of the first regular tranche of around €4.2 billion under the Ukraine Facility. The facility aims to support Ukraine's macro-financial stability and governance. The total amount of financing is expected to reach €50 billion by 2027.
Ukraine has already received three emergency tranches, which were issued to urgently rescue the country's macro-financial stability. Now the European Union is moving to regular tranches, which require the fulfillment of conditions, including reforms.
A new level of control
One of the most important aspects of the Ukraine Facility is to strengthen European control over the spending of funds. The program was approved in February, and on March 20, an agreement was signed between Ukraine and the EU on Ukraine’s participation in the anti-fraud program. This agreement establishes significant powers for European control authorities, who now have access to all levels of financial transactions in Ukraine.
Under the agreement, the European Commission, the European Court of Auditors (ECA) and the European Anti-Fraud Office (OLAF) will have the right to inspect all persons and organisations receiving EU funding. This includes the right of access to facilities, documents and electronic data, as well as the ability to conduct administrative investigations and on-site inspections.
EU inspection and audit rights
The European Court of Auditors (ECA) will be responsible for auditing EU spending, ensuring that the money is spent legally and effectively. However, an even more serious threat to potential embezzlers could be the European Anti-Fraud Office (OLAF). OLAF investigates possible criminal offences and has the right to conduct administrative investigations and inspections in Ukraine.
According to the agreement, in case of violations, the European Commission may impose fines that are subject to enforcement in Ukraine. OLAF also has the right to contact the EU Prosecutor's Office for further investigation and prosecution of the guilty parties. Ukrainian state authorities are obliged to cooperate with European institutions, providing them with access to all necessary data and documents.
Thus, the new conditions of the Ukraine Facility program introduce a significant level of control by the EU over the use of European funds in Ukraine and reforms.
