{"id":441515,"date":"2025-09-21T18:40:20","date_gmt":"2025-09-21T18:40:20","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/441515\/"},"modified":"2025-09-21T18:40:20","modified_gmt":"2025-09-21T18:40:20","slug":"ukraine-facility-fourth-tranche-from-eu-got-cut-because-kyiv-didnt-complete-3-reforms","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/441515\/","title":{"rendered":"Ukraine Facility fourth tranche from EU got cut because Kyiv didn’t complete 3 reforms"},"content":{"rendered":"

On Aug. 8, the EU Council approved<\/a> the transfer of \u20ac<\/strong>3,056 billion within the fourth tranche under the Ukraine Facility program. This is an EU project that supports the Ukrainian economy and allows the state to focus its money on defence.\u00a0<\/p>\n

Under the previous agreements, Ukraine had to get \u20ac4.5 billion <\/strong>for completing 16 reforms. Ukraine completed 13 instead.\u00a0<\/p>\n

Spokesperson of European Commission Guillaume Mercier said<\/a> that three reforms Ukraine didn\u2019t complete are reform of\u00a0 Ukraine\u2019s Asset Recovery and Management Agency (ARMA), decentralization reform, and reform that regulates selection of judges in the High Anti-Corruption Court (HACC).\u00a0<\/p>\n

Gwara Media\u2019s journalists studied what those are, why Ukraine needed them, and what blocked the progress.\u00a0<\/p>\n

ARMA reform\u00a0<\/p>\n

The ARMA was created to search for likely \u201cunlawful\u201d property and assets, arrest them, and then transfer them into state ownership.\u00a0<\/p>\n

Also, when in criminal proceedings the court finds, for instance, a business owner guilty and confiscates their property and other assets, these assets are then transferred under the ARMA\u2019s management.\u00a0<\/p>\n

Here\u2019s an example: in 2018, the National Anti-Corruption Bureau of Ukraine (NABU) launched criminal proceedings into unlawful schemes related to the gas reserves on Novoiarivsk and Novyi Rozdil thermal power stations in Lviv Oblast. Investigation figured that because of the station\u2019s schemes the state lost<\/a> 1,4 billion hryvnias (~$33,7).\u00a0<\/p>\n

The ARMA confiscated both stations from their owners and beneficiaries and transferred<\/a> the rights to manage those assets to the Naftogaz Teplo company to avoid an industrial disaster and launch a heating season for 60,000 residents of Novoiarivsk and Novyi Rozdil.\u00a0\u00a0\u00a0\u00a0<\/p>\n

Why did ARMA need to be reformed?\u00a0<\/p>\n

\u201cFor years of ARMA\u2019s work, certain areas where abuses (of authority) happened have been recorded. For instance, (within) the speed with which managers of arrested assets are selected. Plus, the competition for the position of head of the Agency was conducted without international experts, which increased the risks of illegal political influence on the commission\u2019s decision. And the independent audit wasn\u2019t conducted according to law,\u201d representatives of Transparency International Ukraine (TIU) told Gwara Media\u2019s journalists.\u00a0<\/p>\n

Ukraine\u2019s Parliament passed the bill for ARMA\u2019s reform on June 18, 2025. But the president signed the bill into law in July 2025 \u2014 after the European Commission decided to cut off the fourth tranche. The ARMA reform bill was included in<\/a> the parliament\u2019s agenda back in February 2025.\u00a0<\/p>\n

TIU says that the bill was stuck in the parliament for that long because not everyone involved in passing it was interested in \u201ccardinal changes\u201d of the Agency\u2019s work.\u00a0<\/p>\n

Under the old law, the commission that conducted the ARMA\u2019s audits was formed by Ukraine\u2019s President, Cabinet of Ministers, and Parliament. Now, under the new law, the contest is run by a commission of three experts, selected from people recommended by donors and international experts. Ten months after the bill was made into law, this commission has to assess the ARMA\u2019s work and release a conclusion about its efficiency.\u00a0<\/p>\n

Also, under the previous law, eight people picked the head of the agency. They were appointed by various political subjects: parliament, head of the NABU, General Prosecutor, Finance Minister, and Financial Intelligence Unit (FIU). Now, the ARMA\u2019s head will be selected by six people, half of which will be appointed by international partners, and another half \u2014 by Ukraine\u2019s government.\u00a0<\/p>\n

\u201cThe most significant changes reform makes are related to perfecting the management of arrested assets,\u201d Transparency International told Gwara. \u201cARMA has to accept assets within a defined timeframe, order their evaluation using special funds\u2019 financing, and contain (the assets) until they can be transferred to another proprietor. Assets will be classified into simple and complex depending on the specifics of their management. That will determine the approach to selecting a future asset\u2019s proprietors. The management agreement will be ratified by the government, and the proprietors will be obligated to insure the assets. There\u2019s also a possibility of temporary assets for the needs of the military and those who suffered from the war.\u201d\u00a0<\/p>\n

ARMA will develop approximate plans of asset management with detailed information about their characteristics, risks, and expected expenses and returns. There will be regular control of asset management efficiency. Realizing frozen assets would be happening via Ukraine\u2019s system of public procurement Prozorro, under the terms defined by the respective bylaws.<\/p>\n

\u201cIt\u2019s important to take into account that the ARMA has an opportunity to search and manage assets arrested within criminal proceedings, including those related to corruption. That\u2019s why there are lots of parties who are interested in whether or not the ARMA works efficiently, including in parliament,\u201d the TIU said to Gwara.<\/p>\n

\"Ukraine\u2019s<\/a><\/p>\n

Ukraine\u2019s Asset Recovery and Management Agency \/ Illustrative image <\/p>\n

New judges for High Anti-Corruption Court\u00a0<\/p>\n

The second demand of the Ukraine Facility that wasn\u2019t completed was the strengthening of the High Anti-Corruption Court (HACC). That should have been realized through hiring new judges in the first quarter of 2025, says Karyna Aslanyan, manager of the \u201cRule of Law\u201d area in the \u200b\u200bAgency for Legislative Initiatives (ALI), to Gwara.\u00a0<\/p>\n

HACC was created in 2019 as one of the main components of Ukraine\u2019s anti-corruption infrastructure. That\u2019s where cases brought up by the National Anti-Corruption Bureau (NABU) are processed, with a Special Anti-Corruption Prosecutor\u2019s Office (SAPO) involved.\u00a0<\/p>\n

Aslanyan explained that, over a year back, the High Qualification Judges Commission (HQJC) announced a competition for 25 open judicial positions, as was demanded under the Ukraine Facility program. Only two people won the competition, and, after the Presidential appointment, both are now working in the HACC.\u00a0<\/p>\n

Why did so few people, two out of 261, get through the competition? The head of the HACC, Bohdan Krykvylenko, explained<\/a> that candidates \u201cdropped off\u201d on several stages of the competition established by HQJC. 30% of them filled out the document incorrectly, some of them couldn\u2019t get through the cognitive tests, and another part didn\u2019t manage to complete the practical assignment. Only seven people, according to Krykvylenko, got to the interviews where their ethics and integrity were assessed.\u00a0<\/p>\n

\u201cThe previous contest for the HACC failed because the demands for candidates were excessive, especially for the judges who wanted to work in appellate courts,\u201d Karyna Aslanian says to Gwara. Twenty-three judicial positions in HACC were left vacant after that first contest.\u00a0<\/p>\n

\u201cThe result: a failed competition, missed deadlines for Ukraine\u2019s commitments under the Ukraine Facility and IMF Memoranda, an understaffed HACC, prolonged consideration of high-profile corruption cases, and the necessity to start the competition from scratch,\u201d Karyna Aslanyan wrote<\/a> in her analysis for one of Ukraine\u2019s media.\u00a0<\/p>\n

Recently, HQJC announced a new competition until Aug. 6, 2025. This year, candidates could apply<\/a> both to appellate and first instance courts. The parliament also removed<\/a> the 75% threshold for a cognitive test relating to Ukrainian statehood and allowed<\/a> contestants who didn\u2019t pass, skipped, or refused to pass the test before to apply again.<\/p>\n

\u201cBut even now, we still have the issue that not many people are willing to contest for a position in HACC,\u201d Aslanyan says.\u00a0<\/p>\n

Under the Ukraine Facility, Ukraine had to fill no less than 20% judicial vacancies, optimize and accelerate the process of hiring judges.\u00a0<\/p>\n

Only 205 people applied<\/a> to this year\u2019s competition, and selection is ongoing.\u00a0<\/p>\n

\"High<\/a><\/p>\n

High Anti-Corruption Court \/ Illustrative image <\/p>\n

Decentralization reform\u00a0<\/p>\n

The reform concept<\/a> for decentralization was established in 2014. Until the issue of establishing a proportional oversight over local governments became pressing, this reform was considered one of the most successful in Ukraine by the authorities.\u00a0<\/p>\n

At the beginning, within the reform, local territorial hromadas (communities) were established and received authority to make their own local decisions and more money<\/a> from the state budget. Even after the beginning of Russia\u2019s full-scale invasion, this reform was one of the most supported<\/a> by society in the country.\u00a0<\/p>\n

The first stage of implementing the reform\u2019s conception had to be adding changes to the Constitution of Ukraine, said<\/a> the head of Centre of Policy and Legal Reform Ihor Koliushko. The changes to the Constitution, Koliushko said, had to create oblast- (region in Ukraine) and district councils and divide the authority between them. The lack of political consensus to do that blocked changing the Constitution.\u00a0<\/p>\n

Dividing authority is still not completed. From one side, there are interests of mayors and community leaders, from the other \u2014there are interests of the state and state\u2019s representatives, e.g. regional state administrations (which during martial law are called regional military administrations.)\u00a0<\/p>\n

Currently, Ukraine\u2019s parliament has a draft law related to decentralization (\u21164298) on the agenda that creates legal conditions and a basis for making regional state administrations function via the prefecture model, ALI\u2019s experts explained to Gwara.\u00a0<\/p>\n

The draft law was created in 2020. According to Vitalii Beshin<\/a>, a head of the parliament\u2019s committee on self-governance, the draft law, since then, passed through first reading, four preparations for second reading, consultations with local governments and local state administrations, Council of Europe\u2019s representatives, etc. It also got approval from the European Commission.\u00a0<\/p>\n

However, according to the head of some communities, this draft law contradicts<\/a> the European Charter of Local Self-Government and still needs considerable work.\u00a0<\/p>\n

Hromadas\u2019 leaders are concerned about this draft bill \u201crolling back\u201d the initial reform. According to them, it increases the regional state\u2019s administrations\u2019 status, \u201cgiving them an opportunity to uncontrollably intrude into the hromada\u2019s business and do so without any consequences.\u201d\u00a0<\/p>\n

Finally, draft law \u21164298 doesn\u2019t fit into Ukraine Facility demands for decentralization reform, the ALI\u2019s experts told Gwara.\u00a0<\/p>\n

\u201cInstead of a clear distribution of power between local councils and state administrations, the (draft law) leaves to state administrations their old functions and gives them rights to cancel the decision of local communities without involving the court,\u201d the ALI said.\u00a0\u00a0<\/p>\n

Another draft law that was talked about as part of decentralization reform is bill \u211613150. The parliament didn\u2019t pass it on Sep. 4, 2025. But it also doesn\u2019t fit under the demands of the Ukraine Facility, Transparency International Ukraine wrote<\/a>.\u00a0<\/p>\n

The draft bill didn\u2019t transform local state administration into the prefecture-type establishments, but it installed state control over local self-government. That contradicts both the European Charter of Self-Government and Ukraine\u2019s Constitution<\/a>. The latter outlines the hromadas\u2019 rights to independently make decisions related to the local issues.\u00a0<\/p>\n

In his interview for ZN.UA, Ihor Koliushko noted<\/a> that for efficient decentralization, it\u2019s necessary to make a clear distinction between what local state administrations can do. The areas of their authority that need to be regulated are: monitoring over whether acts of local self-governmental structures are legal; coordination of local departments of central government; implementing solutions developed on district and oblast\u2019s levels.\u00a0<\/p>\n

According to him, it\u2019s necessary to also directly link local administrations to the Cabinet of Ministers (Ukraine\u2019s government) and create \u2014 in the government\u2014 a structural department that\u2019ll communicate with district administrations. That, according to Koliushko, will enable unity within the state\u2019s policies.\u00a0<\/p>\n

On the regional level, Koliushko proposes to prepare for implementing the European regional model. An oblast council has to have clearly established areas of authority and can\u2019t, in any way, get itself involved in the area security, for instance. He also said that Ukraine doesn\u2019t need district councils. Hromadas can form municipal councils with members of respective communities. The oblast councils, instead, must have executive committees with clear jurisdictions and competencies.\u00a0<\/p>\n

Another thing discussed in the Centre of Law and Reform is raising the oblast state administrations to an over-regional level. The idea is to create over-region administrations and delegate to them the functions of the state administrations. Such an administration would be able to monitor the compliance of oblast councils with the law and coordinate the work of district administrations.\u00a0<\/p>\n

\u201cOf course, (it\u2019ll work) if the president doesn\u2019t get involved and doesn\u2019t call all of it \u201cthe president\u2019s vertical.\u201d Everything has to work within a system of executive authority, meaning under the government\u2019s authority. Sadly, both the Cabinet of Ministers and the respective Ministry (responsible for decentralization) take a passive position about the key question for state management,\u201d Koliushko concludes.\u00a0<\/p>\n

\"European<\/a><\/p>\n

European flag flying in Copenhagen, Denmark \/ Photo: Unsplash, Antoine Schibler<\/p>\n

What\u2019s next with the Ukraine Facility and these reforms?\u00a0<\/p>\n

The ARMA reform law is already signed in, and the competition for HACC\u2019s judicial positions is complete, but everything is more complex with decentralization.\u00a0<\/p>\n

At the beginning of August, Oleksii Sobolev, Minister of Economy, Environment, and Agriculture, reported<\/a> that Ukraine\u2019s government decided to change the Ukraine Facility plan. According to Sobolev, the opportunity to change and adapt the terms of Ukraine\u2019s obligation was implied and explicitly discussed with the European Commission since the launch of the Ukraine Facility.\u00a0<\/p>\n

One of the changes is connected to the decentralization reform. In the new Ukraine plan<\/a>, boundaries of authority for local self-government structures and state administration have to be installed after the war, instead of the first quarter of 2026.\u00a0<\/p>\n

If the Council of Europe approves the updated Ukraine Facility plan, Ukraine can postpone decentralization reform, for which the EU cut off the fourth tranche, for an indefinite time.\u00a0<\/p>\n

The government expects<\/a> the EU to ratify the proposed changes to the plan by the end of September.\u00a0<\/p>\n

\u201cUkraine demands new norms for international law with its blood. But what\u2019s clear for Ukraine today, this outrageous unfairness; it takes time for the rest of the world to accept. To admit that existing norms do not work.\u201d\u00a0<\/p>\n

\"\u0437\u043e\u0431\u0440\u0430\u0436\u0435\u043d\u043d\u044f<\/a>\"slovenia\"\/<\/a><\/p>\n

The project is co-financed by the governments of Czechia, Hungary, Poland, and Slovakia through Visegrad Grants from the International Visegrad Fund. The mission of the fund is to advance ideas for sustainable regional cooperation in Central Europe.<\/p>\n

The project is supported by the Ministry of Foreign Affairs of the Republic of Korea.<\/p>\n

\"\" <\/a><\/p>\n

If you have found an error, highlight the necessary fragment and press Shift + Enter. <\/p>\n","protected":false},"excerpt":{"rendered":"On Aug. 8, the EU Council approved the transfer of \u20ac3,056 billion within the fourth tranche under the…\n","protected":false},"author":2,"featured_media":441516,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5174],"tags":[2000,299,5187,2557,141914,149304],"class_list":{"0":"post-441515","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-eu","8":"tag-eu","9":"tag-europe","10":"tag-european","11":"tag-european-commission","12":"tag-ukraine-facility","13":"tag-ukraine-reforms"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/115243754055162319","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/441515","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=441515"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/441515\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/441516"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=441515"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=441515"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=441515"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}