EUU, Alm.del - 2021-22 - Bilag 579: Kommissionens udtalelser vedr. Ukraines, Moldovas og Georgiens ansøgninger om EU-medlemskab

Europaudvalget 2021-22
EUU Alm.del Bilag 579
Offentligt

Council of the

European Union

Brussels, 17 June 2022

(OR. en)

10321/22

ELARG 46

COEST 465

COVER NOTE

From:

date of receipt:

To:

No. Cion doc.:

Subject:

Secretary-General of the European Commission, signed by Ms Martine

DEPREZ, Director

17 June 2022

General Secretariat of the Council

COM(2022) 407 final

COMMUNICATION FROM THE COMMISSION

Commission Opinion on Ukraine’s application for membership of the

European Union

Delegations will find attached document COM(2022) 407 final.

Encl.: COM(2022) 407 final

10321/22

RELEX.4

GL/sb

EUU, Alm.del - 2021-22 - Bilag 579: Kommissionens udtalelser vedr. Ukraines, Moldovas og Georgiens ansøgninger om EU-medlemskab

EUROPEAN

COMMISSION

Brussels, 17.6.2022

COM(2022) 407 final

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN

PARLIAMENT, THE EUROPEAN COUNCIL AND THE COUNCIL

Commission Opinion on Ukraine’s application for membership of the European Union

EUU, Alm.del - 2021-22 - Bilag 579: Kommissionens udtalelser vedr. Ukraines, Moldovas og Georgiens ansøgninger om EU-medlemskab

INTRODUCTION

The aspiration to belong to the European Union has for many years been an important priority

for Ukraine, its governments and citizens. It has been an underlying motive for democratic

changes over the past decade and a driver of a number of key reforms founded on European

values. The decision in late 2013, of the then-President not to sign, the EU-Ukraine

Association Agreement, which symbolised for many Ukrainians a path towards the European

Union, led to large-scale protests against the authorities. Subsequently, the Russian Federation

moved against Ukraine, not accepting the independent choice of the Ukrainian people. While

losing control over part of its territory and suffering human and economic losses because of

the conflict in the eastern part of the country, Ukraine continued throughout the years as a

resilient democracy moving closer to the European Union and gradually aligning with the

acquis.

a) Application for membership

On 28 February 2022, five days after Russia launched its full-scale unprovoked and

unjustified aggression, Ukraine presented its application for membership of the European

Union. On 7 March 2022 the Council of the European Union requested the Commission to

submit its Opinion on this application. EU Heads of State and Government endorsed this

decision at the informal leaders meeting in Versailles

Article 49 of the Treaty on European Union states that ‘Any

European State which respects

the values referred to in Article 2 and is committed to promoting them may apply to become a

member of the Union. The European Parliament and national parliaments shall be notified of

this application. The applicant state shall address its application to the Council, which shall

act unanimously after consulting the Commission and after receiving the consent of the

European Parliament, which shall act by a majority of its component members. The

conditions of eligibility agreed upon by the European Council shall be taken into account.’

Article 2 states that ‘the

Union is founded on the values of respect for human dignity,

freedom, democracy, equality, the rule of law and respect for human rights, including the

rights of persons belonging to minorities. These values are common to the Member States in a

society in which pluralism, non-discrimination, tolerance, justice, solidarity and equality

between women and men prevail.’

This is the legal framework within which the Commission submits the present Opinion.

In June 1993 in Copenhagen the European Council concluded that:

"Accession

will take place as soon as a country is able to assume the obligations of

membership by satisfying the economic and political conditions required.

Membership requires:

that the candidate country has achieved stability of institutions guaranteeing

democracy, the rule of law, human rights and respect for and protection of minorities;

the existence of a functioning market economy, as well as the capacity to cope with

competitive pressure and market forces within the Union;

the ability to take on the obligations of membership including adherence to the aims of

political, economic and monetary union".

20220311-versailles-declaration-en.pdf (europa.eu)

EUU, Alm.del - 2021-22 - Bilag 579: Kommissionens udtalelser vedr. Ukraines, Moldovas og Georgiens ansøgninger om EU-medlemskab

In December 1995, in Madrid, the European Council referred to the need

‘to create the

conditions for the gradual, harmonious integration of [the applicant] countries, particularly

through the development of the market economy, the adjustment of their administrative

structures and the creation of a stable economic and monetary environment’.

In December 2006, the European Council agreed that

‘the enlargement

strategy based on

consolidation, conditionality and communication, combined with the EU's capacity to

integrate new members, forms the basis for a renewed consensus on enlargement’.

In this Opinion, the Commission assesses Ukraine’s application on the basis of its capacity to

meet the criteria set by the European Council in Copenhagen in 1993, as well as in Madrid in

1995, notably regarding the country’s administrative capacity. The Opinion

also takes into

account Ukraine’s efforts in implementing its obligations under the Association Agreement

(AA) and Deep and Comprehensive Free Trade Area (DCFTA), which entered into force on 1

September 2017. The Commission will assess the impact of

Ukraine’s accession on the EU

policy areas at a later stage.

This Opinion has been prepared following a methodology similar to that used in previous

Commission Opinions. Ukraine received questionnaires on 8 April 2022 on the political and

economic criteria and on 13 April on the EU

acquis

chapters and provided its replies on 17

April and on 9 May respectively. This Opinion is a structural assessment against established

criteria and builds on knowledge and experience gained through many years of close

cooperation of the EU with Ukraine.

b) Relations between the European Union and Ukraine

Eight years after the illegal annexation of Crimea and the destabilisation of eastern Ukraine in

2014, on 24 February 2022 Russia launched a large-scale military invasion against the whole

country. More than seven million people have fled to other countries, particularly to EU

Member States and the Republic of Moldova, and there are almost eight million of internally

displaced persons within Ukraine. The EU adopted several packages of unprecedented

sanctions against Russia

. It has also stepped up significantly its political, financial,

humanitarian and military support. European citizens have displayed unprecedented solidarity

through countless private initiatives. During the war, the Ukrainian government has shown a

remarkable level of institutional strength, determination and ability to function. It mobilised

itself to respond quickly to the EU questionnaire on its membership application.

The beginning of the EU-Ukraine relations dates back to the period following the

proclamation of Ukraine’s independence in 1991. In June 1994 the EU signed a Partnership

and Cooperation Agreement with Ukraine, which entered into force in March 1998. Political

and economic cooperation was enhanced in 2004 when Ukraine became EU priority partner

within the European Neighbourhood Policy and further strengthened with the launch of the

Eastern Partnership Initiative in 2009.

Integration with the European Union has been an important foreign and internal policy

dimension of Ukraine for many years. The

Orange Revolution

in 2004 against electoral fraud

and corruption was also about the orientation towards the West and integration with the EU.

Following the parliamentary elections in March 2006, the EU decided to start consultations

with a view to negotiate a new enhanced agreement with Ukraine. Negotiations started in

March 2007. The draft Association Agreement was initialled in March 2012. The

Revolution

EU sanctions map - https://www.sanctionsmap.eu/#/main

EUU, Alm.del - 2021-22 - Bilag 579: Kommissionens udtalelser vedr. Ukraines, Moldovas og Georgiens ansøgninger om EU-medlemskab

of Dignity,

in 2014 was triggered by the refusal by the then President of Ukraine to sign the

Association Agreement/Deep and Comprehensive Free Trade Area (AA/DCFTA).

In the aftermath of the

Revolution of Dignity,

Russia illegally annexed Crimea and backed

illegal armed groups in east Ukraine. The EU and the international community condemned

these grave breaches of international law, and subsequently the EU imposed sanctions against

the Russian Federation.

Ukraine’s new government, in place after the

Revolution of Dignity,

signed the political part

of the AA in March 2014. The economic part of AA/DFCTA was signed after the presidential

election in May 2014. Major parts of the agreement have been provisionally applied since

2014. In September 2017, the AA/DCFTA fully entered into force.

The AA/DCFTA provides the foundations for political association and economic integration

between the European Union and Ukraine. In its preamble, the EU acknowledged the

European aspirations of Ukraine and welcomed its European choice including its commitment

to building a deep and sustainable democracy and a market economy. Currently, the

agreement is the key bilateral legal instrument serving as basis for deepening political ties,

stronger economic linkages, promotion of common values and enhanced cooperation in areas

of mutual interest. Based on the AA/DCFTA, Ukraine has carried out number of challenging

reforms and successfully aligned its legislation with the EU in many areas.

The EU-Ukraine Civil Society Platform (CSP) is one of the bodies set up under the

Association Agreement between the European Union and Ukraine. It enables civil society

organisations on both sides to monitor the implementation process and prepare

recommendations to the relevant authorities.

In 2019, a constitutional amendment supported by 335 out of 450 Members of the Ukrainian

Parliament defined

as the state’s strategic course the “full membership of Ukraine in the

European Union and the North Atlantic Treaty Organization”.

Ukraine is a contracting Party to the Energy Community Treaty and the Agreement on the

Common Aviation Area, which assist in approximating Ukrainian legislation to the EU

acquis.

Ukraine is part of the extended TEN-T network.

Citizens of Ukraine enjoy visa-free travel to the Schengen area as of 11 June 2017. An

agreement on readmission between the European Union and Ukraine is in force since 2007.

Since 1997, the EU and Ukraine have been meeting at high level. In total, twenty-three EU-

Ukraine Summits at presidential level have taken place up to date. Relations have developed,

with increased engagement and momentum since then. The new EU-Ukraine dialogues on the

Green Deal and cyber security launched in 2021 are good examples of expanding cooperation

in areas of joint strategic interest. The EU together with many other international partners

joined a Ukraine established International Crimea Platform in 2021 as a consultative

coordination format with the aim of peacefully ending Russia’s illegal annexation of the

peninsula.

Ukraine is a full member of the United Nations, the Council of Europe and a participating

state of the Organisation for Security and Cooperation in Europe (OSCE).

The EU has provided significant

financial assistance

to Ukraine, which over the years 2014

to 2021 amounted to EUR 1.7 billion in grants under the European Neighbourhood

Instrument, EUR 5.6 billion under five macro-financial assistance programmes in the form of

loans, EUR 194 million in humanitarian aid and EUR 355 million from foreign policy

EUU, Alm.del - 2021-22 - Bilag 579: Kommissionens udtalelser vedr. Ukraines, Moldovas og Georgiens ansøgninger om EU-medlemskab

instruments. The EU provides its support to Ukraine for policy development and

comprehensive reforms, with strong involvement from EU Member States in a Team Europe

spirit. For the current multi-annual programming, the Commission has increased its focus on

flagship investments and priorities under an Economic and Investment Plan (EIP)

, which

seeks to unlock up to EUR 6.5 billion in public and private investments for the country and

will provide a basis for future reconstruction. The approach developed under the EIP will

serve as a good basis for any future reconstruction plans.

Since the Russian invasion, the EU has stepped up its support, mobilising around EUR 4.1

billion for Ukraine’s overall economic, social and financial resilience in the form of

emergency macro-financial assistance, budget support, emergency assistance, crisis response

and humanitarian aid. This also includes military assistance measures to support Ukraine

under the European Peace Facility, amounting to EUR 2 billion that will be used to reimburse

EU Member States for their in-kind military support to Ukraine.

Before and during

Russia’s

war of aggression, the EU has worked hand in hand with financial

institutions to support Ukraine. Since 2014, the European Investment Bank and the European

Bank for Reconstruction and Development have mobilised EUR 9.5 billion in loans to

Ukraine. Of this EIB has disbursed EUR 668 million to the Ukrainian budget in recent weeks.

The EU is also working in close cooperation with the World Bank and the International

Monetary Fund, which have been key partners in the Ukrainian efforts since 2014.

As of 2014, with the establishment of the Support Group for Ukraine, the EU transformed its

assistance programmes. It moved away from individual projects into larger coherent support

packages for key reforms and building of state institutions. This important shift will be very

relevant in the post war rebuilding and reforming of Ukraine.

Since 2016 Ukraine has progressively extended its

participation in EU programmes,

which

has been partly co-financed by the EU. In particular, Ukraine participates in Horizon 2020

and Horizon Europe, Euratom Research and Training Programme, COSME, Creative Europe

and EU4 Youth programmes. Organisations and individuals from Ukraine can also benefit

from certain actions of the Erasmus+ and European Solidarity Corps Programme. In some

other programmes such as, the European Maritime and Fisheries Fund. Ukraine is

participating in several Interreg programmes and is a member of the EU macro-regional

Strategy for the Danube region.

Ukraine has concluded working arrangements, cooperation agreements or memoranda of

understandings with a number of EU agencies such the European Border and Coast Guard

Agency (Frontex), the European Union Agency for Law Enforcement Training (CEPOL), the

European Monitoring Centre for Drugs and Drug Addiction (EMCDDA), the European Union

Agency for Criminal Justice Cooperation (EUROJUST), the European Police Office

(Europol), the European Anti-Fraud Office (OLAF), the European Union Aviation Safety

Agency (EASA), the European Maritime Safety Agency (EMSA), the European Union

Agency for Railways (ERA), the European Training Foundation (ETF), the European

Medicines Agency (EMA), the European Agency for Safety and Health at Work (EU-OSHA),

the European Centre for Disease Prevention and Control (ECDC) and others. Ukraine is

participating, without voting rights, in the Office of the Body of European Regulators for

Electronic Communications (BEREC). Procedural arrangements for Ukraine joining the LIFE

programme have been completed.

SWD(2021) 186 final

EUU, Alm.del - 2021-22 - Bilag 579: Kommissionens udtalelser vedr. Ukraines, Moldovas og Georgiens ansøgninger om EU-medlemskab

Ukraine is a participant in the Eastern Partnership (EaP). The EaP is based on the principle of

inclusivity and differentiation. Russia’s war in Ukraine has shown that multilateral

cooperation and cohesion is now more important than ever, as is strengthening the resilience

of the region. A focus on bilateral relations will also be important going forward, to allow

Ukraine to implement key reforms, including in the field of governance, justice and rule of

law.

CRITERIA FOR MEMBERSHIP

1. POLITICAL CRITERIA

This assessment is based on the Copenhagen criteria relating to the stability of institutions

guaranteeing democracy, the rule of law, human rights and respect for and protection of

minorities.

1.1 Democracy

As established by its

Constitution,

Ukraine is a parliamentary-presidential democracy in

which the legislative powers are exercised by the Parliamentary Assembly (Verkhovna

Rada)

and the executive powers by the Government, while the President retains important executive

powers.

The Constitution provides for the fundamental principles of a democratic state, including the

rule of law, free elections and the protection of human rights. Primacy of international law is

explicitly determined by the Constitution rendering the international treaties in force as

binding and an integral part of the national legislation of Ukraine.

The only body that may interpret the Constitution and determine whether legislation conforms

to it is the

Constitutional Court of Ukraine (CCU),

which is still in urgent need of reform in

line with the recommendations of the Venice Commission. Central to such reform is the

introduction of a credible and transparent selection procedure for appointments of judges to

the CCU, including an integrity check. Relevant legislation is pending in the Parliament.

Under its Constitution, the

President

of Ukraine is the head of State, directly elected by the

citizens for a five-year term of office. Foreign policy is formally the responsibility of the

President, who is also the Army Supreme Commander-in-Chief. The President has the right to

choose the ministers of defence and foreign affairs and appoint local governors.

The

executive power

is exercised by the Government, consisting of a Prime Minister, a First

Deputy Prime Minister, three Deputy Prime Ministers and 18 ministers. The government has

overall adequate capacities for policy planning. During the war, the Ukrainian government

has shown institutional resilience and ability to function and remained a reliable international

partner.

The

Parliament,

named

Verkhovna Rada,

is the legislative body of Ukraine, which exercises

effective democratic control over the executive branch. The Parliament plays a key role in

appointing and dismissing the Government, and heads and members of a number of other

public institutions. It is composed of 450 deputies elected for a five-year term. There remain

26 vacant seats in the

Verkhovna Rada,

elections for those seats not having been being held in

the Autonomous Republic of Crimea and the City of Sevastopol (Crimea) illegally annexed

by the Russian Federation and in the parts of Donetsk and Luhansk oblasts beyond the

government’s control.

The Parliament

endorsed the President’s decision to introduce martial

EUU, Alm.del - 2021-22 - Bilag 579: Kommissionens udtalelser vedr. Ukraines, Moldovas og Georgiens ansøgninger om EU-medlemskab

law due to the full-scale Russian military aggression in February 2022, but legislative work

continues during this period.

Political developments in Ukraine and recommendations by relevant international

organisations have led to repeated changes in the

electoral system

used for parliamentary

elections. A new Electoral Code, which regulates all types of elections, was adopted in 2019,

to bring the law overall in line with relevant international standards. The Code introduced

inter alia

an open-list proportional representation system, enfranchised internally displaced

persons, and strengthened gender quotas. It was first tested during the local elections in 2020

revealing the need for some further amendments related to the transparency of campaign

financing, on balanced and impartial media coverage, and certain aspects of the procedures of

handling of electoral complaints and appeals. The law on national referenda was adopted in

January 2021 and the work on the law on local referenda is underway. The OSCE Office for

Democratic Institutions and Human Rights (ODIHR) assessed the most recent two-round

presidential elections and early parliamentary elections in 2019 as competitive and both

overall in respect of fundamental rights and freedoms. Some recommendations were issued

which are being followed-up.

The use of urgent procedures to pass legislation, including in areas relevant to the EU

acquis,

is relatively limited. Comprehensive impact assessments of proposed legislation and

legislative oversight of the executive, including monitoring the implementation of legislation,

need to be strengthened.

Public funding of political parties was introduced in 2016 as an instrument to strengthen their

financial and institutional capabilities. Full restoration of financial reporting obligations of

political parties, suspended during COVID-19

pandemic, is pending Parliament’s approval.

After the beginning of the full-scale Russian military aggression in February 2022, the

Ukrainian authorities decided to ban 11 political parties considered to be promoting Russian

interests.

Ukraine has a vibrant

civil society

that plays an active role in the promotion and oversight of

reforms. The expertise of Ukrainian civil society organisations on key sector reforms makes

them a valuable partner for the government and an important actor for local service provision.

The legal framework ensures protection of freedom of association, expression and peaceful

assembly. Measures have been taken to support the registration of civil society organisations,

and simplify rules on reporting and taxation. While there is a very open civic space, there has

been pressure and threats against civic activists from local vested interests, in some cases

leading to violence. The authorities condemn such attacks and investigations have been

stepped up, however, additional efforts are needed to ensure that there is no impunity for such

crimes.

1.2. Public administration reform

Ukraine has progressed in improving its public administration since 2014. The legal

framework for a modern public administration is mostly in place. However, it is not yet fully

implemented.

Ukraine has a well-developed

strategic framework for public administration reform

(PAR) and has prepared and implemented PAR strategies, following the standards of the

European principles of public administration, since 2016. Achieving further progress will

require more intensive engagement at the highest political level. Further efforts by Ukraine

EUU, Alm.del - 2021-22 - Bilag 579: Kommissionens udtalelser vedr. Ukraines, Moldovas og Georgiens ansøgninger om EU-medlemskab

are needed to ensure adequate administrative capacity to implement and enforce legislation,

especially regarding inspection.

Effective and efficient

public service delivery

has been a distinct policy imperative since

2014. Since 2019, the government introduced measures

inter alia

to: simplify and monitor

service delivery; eliminate duplication of front offices; and improve feedback. Furthermore, it

has drafted a law on streamlining the administrative fee, put in place the conditions for e-

services (web-portals, putting administrative services online, and interoperability); and define

by law the specificities of delivering public (electronic) services. Ukraine has an advanced

government,

where its citizens have an easy access to public services through online platform

and application on the mobile phone that has grown in less than two years to 14 million users.

Digital governance has increased the efficiency and the transparency of the government, and

facilitated the government-citizen dialogue.

Ukraine has improved significantly

Public Financial management

(PFM) since its first PFM

strategy in 2013. The 2022-2025 PFM Strategy and Action Plan were adopted in December

2021. This new strategy is in line with the Public Expenditure and Financial Accountability

(PEFA) methodology, EU and international standards. The Government introduced medium-

term budget planning in 2018. The three-year budget declaration for 2022-2024 was approved

for the first time in 2021 and applied to the 2022 budget. The 2020 budget was executed

according to the indicators proposed by the Budget Law. Ukraine has continued to increase

budget transparency since 2017. The legislature and supreme audit institution, together,

provide more than adequate oversight during the budget process. Budget documents provide a

good overview on budget revenues and expenditure. Progress was made in enhancing

domestic revenues mobilisation in both tax and customs areas in line with the commitments of

the Association Agreement. Oversight of the off-budget accounts and the use of international

standards in the Accounting Chamber of Ukraine needs further improvement.

With respect to

multi-level governance,

Ukraine’s

decentralisation

has advanced since

2014. This is one of the most impactful and successful reforms implemented in the country. It

has become a crucial enabler of the social and economic development. A key aspect of the

reform was a merger (amalgamation) of over 10 000 small and dispersed local entities into 1

470 larger municipalities (‘hromadas’)

with increased administrative and economic capacity

to manage their responsibilities more effectively. A country-wide

network of local “one-stop-

shop” administrative service centres provides quality services to citizens and businesses.

The

reform was underpinned by fiscal decentralisation (including 64% share of personal income

tax currently allocated to municipalities) with the aim of securing stable resources necessary

for the exercise of the new tasks of local self-government. Municipalities also benefited from

transfer of property and gained opportunities to regulate land trade on their territory. Sectorial

decentralisation advanced in health and education.

With respect to

Public Service and Human Resources Management,

a new law on civil

service entered into force in 2016. The law lays the foundation for a modern civil service.

Building a professional and merit-based civil service would require a refinement of both the

legal framework and operational practice, however. A reform of the civil service

remuneration system needs to be finalised to allow retaining qualified professionals and to

attract new talent. Right before the war broke out, Ukraine was on the verge of adopting a key

law on administrative procedures. The institutional architecture of the state administration is

comprehensively regulated, but its organisational design and steering mechanisms should be

improved to ensure effective, results-oriented and efficient governance.

Policy development and coordination

has reached a good level in a number of ministries

while in others this needs to be improved. The regulatory framework for policy development

EUU, Alm.del - 2021-22 - Bilag 579: Kommissionens udtalelser vedr. Ukraines, Moldovas og Georgiens ansøgninger om EU-medlemskab

needs to be updated, in order to improve analytical capacity and to make planning documents

more realistic, especially by better aligning with available budgets. The mechanism for public

and inter-ministerial consultations needs to be further improved.

Accountability

management has improved across the board, for instance by introducing

performance indicators in all ministries. The legal framework does not always establish

coherent accountability lines and governance arrangements between supervisory and

subordinated bodies. The autonomy granted to non-ministerial bodies does not focus on

holding agencies accountable for results.

1.3. Rule of law

Since the

Revolution of Dignity

in 2014, Ukraine undertook two rounds of judicial and anti-

corruption reforms (in 2014-2016 and in 2020-21) to align the judicial system with the

principles of the rule of law, to strengthen judicial independence and accountability and to set

up independent anti-corruption bodies. These reforms also had the aim of making the system

more efficient and transparent. This need for reforms arose against the background of

insufficient independence of the judiciary from the executive and legislative branches, low

accountability, high levels of corruption and strong influence of oligarchic interests.

a) Judiciary

Ukraine has embarked on the reform of the justice sector and the relevant

strategic approach

is in place.

The High Judicial Council is the main body responsible for the self-government of the

judiciary. The constitutional and legislative framework guarantees the

independence of the

judiciary

and its impartiality. Codes of ethics for judges and prosecutors are in place, as well

as an integrated case management system with automated allocation of cases. The

appointment of judges and prosecutors is in principle based on merit and objective criteria,

following public competitions. However, attempts of undue internal and external interference

on the judiciary remain an issue of concern.

The first round of justice reforms culminating in constitutional amendments in 2016

succeeded in streamlining the court system from a four to a three-tier one. It also imposed

new examinations and integrity checks for all sitting judges, which led to the resignation of

more than one quarter of the judicial corps, about 2000 judges. The judiciary is currently

seriously understaffed, given that the body responsible for selection procedures was dissolved

at the end of 2019. New

Supreme Court

members were nominated in a transparent manner,

however some judges with questionable integrity were also appointed. Judicial appointments

were opened to the entire legal profession and a more transparent judicial selection system

was introduced. An important addition to the judicial system was the establishment in 2019 of

the High Anti-Corruption Court, facilitated by a strong engagement of Ukrainian civil society

and the international community.

At present, the judiciary continues to be regarded as one of the least trusted and credible

institutions. At the time the war erupted, Ukraine was on the verge of finalising the

implementation of a fundamental judicial reform (2020-2022) that would lead to systemic

changes, if fully implemented. The key aspects of the new reforms are embedded in a new

comprehensive

Strategy for the Development of the Justice System and Constitutional

Judiciary

for 2021-2023.

Regarding the

efficiency

of the justice system the picture is mixed, with a positive trend in

civil and commercial proceedings and a negative trend in administrative proceedings. The

biggest issue is the backlog of overall 578.750 cases (in 2018), which is particularly a

EUU, Alm.del - 2021-22 - Bilag 579: Kommissionens udtalelser vedr. Ukraines, Moldovas og Georgiens ansøgninger om EU-medlemskab

problem with regard to the Supreme Court (currently backlog of 24.000 cases). The

disposition time in civil and commercial litigious cases decreased to 122 days in 2020,

compared to 129 days in 2018 which corresponds to a standard level of efficiency. The

clearance rate increased to 98 % (97 % in 2018)

The 2018 overall budget was 632.1 million (0.56 % of GDP). Although 78 % of courts budget

is spent on salaries and compensations, very limited funds were allocated to investment needs

(0.2 %) and training (0.004 %). Ukraine has 13 judges and 21 prosecutors per 100 000

inhabitants, compared with a European average of 21 judges and 12 prosecutors per 100 000

inhabitants

New legislation introducing

integrity and professional ethics checks

for the key judicial

governance bodies (the High Council of Justice, whose main responsibilities include

appointments and dismissals of judges, and the High Qualification Commission of Judges

which conducts the selection procedures for new judges) was adopted in July 2021, fully in

line with Venice Commission recommendations. The bodies tasked with doing the integrity

checks had been established and started their work. After a suspension of works as of 24

February 2022, with the war ongoing, the integrity check of current HCJ members was

finalised on 7 May 2022; out of 21 HCJ members, only three remain. These reforms have the

potential not only to build an independent and accountable judiciary, but also to reduce the

influence of vested interests who used the current judicial governance system to undermine

the rule of law in Ukraine.

To deal with the systemic problem of non-enforcement of domestic court decisions, in 2020,

the Government adopted a Strategy on the resolution of non-enforcement of court decisions

where a state entity or state owned enterprise is a debtor. In 2021, the Parliament adopted the

draft law reforming the enforcement of court decisions in first reading.

At the end of 2019, an ambitious reform of the

prosecution service

was launched. Its core

element was the vetting of all 11 700 prosecutors at the central, regional and local level based

on professionalism and integrity criteria. 30% of prosecutors failed the attestation and had to

leave the service. Some 2000 court cases challenging the outcome of the individual attestation

were opened and court proceedings in most of these cases are pending. In 2021, the

Prosecutor General successfully piloted a new procedure for a transparent and merit-based

selection of management-level prosecutors. In 2022, work has started on turning this interim

procedure into a permanent one, and on improving the disciplinary system for prosecutors.

b) Fight against corruption

Preventing and combatting corruption has been particularly high on the Ukrainian reform

agenda since the

Revolution of Dignity.

Increased transparency and preventive measures have

brought tangible results in reducing the space for corruption across various sectors.

Nevertheless, many challenges persist. Corruption remains a serious challenge that requires

continued attention as it imposes significant costs on the state budget, businesses and the

population, discourages domestic and foreign investment and undermines the rule of law.

The country is a party to all key international anti-corruption conventions, including the

United Nations Convention against Corruption (UNCAC). A number of recommendations

from relevant international anti-corruption monitoring mechanisms, including GRECO,

remain outstanding. All forms of corruption are criminalized, including illicit enrichment, and

the laws regulate conflict of interests, protecting whistle-blowers and ensuring transparent

public party financing. Following an inclusive drafting process, a new

national anti-

As reported by the Council of Europe European Commission for the Efficiency of Justice.

EUU, Alm.del - 2021-22 - Bilag 579: Kommissionens udtalelser vedr. Ukraines, Moldovas og Georgiens ansøgninger om EU-medlemskab

corruption strategy

with a focus on relevant sectors was elaborated, although its final

adoption by the

Verkhovna Rada

is still pending. Integrity plans and code of ethics are in

place in key parts of the public administration and judiciary with their enforcement being

gradually ensured through internal control units and respective disciplinary bodies.

Ukraine successfully pursued major reforms to prevent corruption and protect the state

budget, particularly in relation to public procurement, public service delivery, energy,

banking and the health sector. Studies have assessed the actual saving of these measures in the

order of six percent of GDP annually. Transparent and comprehensive electronic systems for

asset declarations for public officials was put into operation in 2016. It allows for automatic

verifications and public access to the declarations filed. Similarly, a new international award-

winning electronic system for public procurement Pro-Zorro (and its spin off Pro-Zorro Sale)

were introduced to boost transparency in previously opaque procurement processes. Annually,

according to reliable sources, these systems have produced real savings of one percent of

GDP and will continue to do so.

After 2014, the Ukrainian civil society and the international community played a key enabling

role in the establishment of

specialised anti-corruption institutions,

namely the National

Anti-Corruption Bureau (NABU), the Specialised Anti-Corruption Prosecution Office

(SAPO), the National Agency for Prevention of Corruption (NAPC), the Asset Recovery and

Management Agency (ARMA) and the High Anti-Corruption Court (HACC). These

institutions have comprehensive mandates in line with international standards and operate

increasingly independently, with required resources largely in place, while inter-agency

coordination could be improved. Some of these agencies started successful operations earlier

(e.g. NABU, HAAC) than others (eg. SAPO, NAPC). The independence of all anti-corruption

institutions remains crucial. Their heads should be selected in transparent and competence

based competitions where also the integrity of potential candidates is being checked. It is

particularly important to urgently complete the appointment of a new head of SAPO through

certifying the identified winner of the competition and carry out the selection and

appointment of the NABU director.

On the preventive side, NAPC is mandated with conflicts of interest, verification of declared

assets, auditing the spending of political parties and whistle-blowers protection. As regards

the law enforcement side, NABU is among the most trusted institutions and has increasingly

developed its institutional capacities and a pro-active attitude to address allegations of

corruption involving high-level officials. A modern e-case management system has been

deployed by NABU, SAPO and HACC for facilitating investigations and adjudication of

high-level corruption cases. The establishment of HACC in 2019 through a transparent, merit

based recruitment of judges and staff has greatly facilitated the work of the anti-corruption

institutions and led to an overall more effective adjudication of corruption cases.

While Ukraine has made notable achievements in the preventive side of addressing

corruption, the repressive side needs to be considerably strengthened. The number of high-

level officials brought to justice for corruption remains limited. Investigations of corruption

sometimes lack impartiality and law enforcement agencies experience political interferences.

As regards

track record

of high level corruption cases, a total of 72 verdicts have been issued

by the HACC since 2019, out of which 39 are final convictions, including against members of

parliament, judges, prosecutors, members of local councils and heads of state-owned

enterprises.

EUU, Alm.del - 2021-22 - Bilag 579: Kommissionens udtalelser vedr. Ukraines, Moldovas og Georgiens ansøgninger om EU-medlemskab

A so-called

“Anti-Oligarch law” was signed into law in November 2021, with the strategic

objective to limit the excessive influence of oligarchs, by reducing their role in Ukraine’s

economic, political, and public life. Implementation of relevant legislation is key.

c) Organised crime

A major reform of the police was conducted in 2019. It was aimed at increasing public trust in

the police and strengthening their ability to deal with organised crime. Specialised police units

were put in place to deal with terrorism, cybercrime and drugs. The Ministry of Interior acts

as a national coordinator on organised crime. The police, however, continues to suffer from

low level of equipment and expertise to conduct complex financial investigations. Police

reform has to be continued, including the introduction of a truly professional management

system.

Ukraine ratified the United Nations Convention against Transnational Organized Crime, as

well as its protocols on Trafficking in Persons and on Smuggling of Migrants. The country's

anti-money laundering

legislation partially reflects the Financial Action Task Force (FATF)

standards and relevant international legislation but there are still outstanding

recommendations from the Council of Europe’s Committee of Experts on

the Evaluation of

Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL), which is

why Ukraine has been reporting to MONEYVAL under an enhanced follow-up procedure.

Further reforms are needed to improve Ukraine’s compliance with FATF standards,

particular those related to virtual assets, ultimate beneficial ownership, and supervision of

non-banking businesses and professions. Investigation and prosecution of major money-

laundering schemes should progress. Putting in place a comprehensive framework for the

fight against financial crime and money laundering, and ensuring its effective

implementation, are crucial to address the significant risks they pose. An Asset Recovery and

Management Agency (ARMA) is in place, however, the Agency does not have a permanent

Head since the end of 2019. Legislation related to the management of seized assets should be

improved and a relevant national strategy on asset recovery adopted.

On the national level, Ukraine has approved a Strategy on Combating Organised Crime in

2020; the Action Plan for the Strategy is under development and further approval. A

government regulation on Serious and Organised Crime Threat Assessments (SOCTA) was

adopted in 2022 and Regional Organized Crime Threat Assessment Task Forces (ROCTAFs)

were launched nation-wide.

Ukraine has a working arrangement in place with European Union Agency for Law

Enforcement Training (CEPOL), an operational and strategic agreement with European

Union's law enforcement Agency (Europol) and a Memorandum of Understanding with the

European Monitoring Centre for Drugs and Drug Addiction (EMCDDA). Ukraine is an active

participant in the European Multidisciplinary Platform Against Criminal Threats (EMPACT)

and a member of Interpol. It participates in Joint Investigation Teams facilitated by

EUROJUST.

The country is located at an important crossroad of smuggling illegal goods to the EU,

including arms and drugs. Illegal logging has been wide-spread and despite efforts made in

recent years, illegal trade in timber persists. Ukraine is also a source, transit and destination

country for trafficking in human beings. The number of completed criminal investigations

related to crimes committed by organised groups and criminal organizations slowly increased

in recent years but remains still relatively low (2021

–499

cases; 2020

–

377 cases; 2019

–

293 cases), particularly related to allegations of trafficking in human beings (2021

–

45 cases;

2020

–

57 cases; 2019

–

10 cases).

EUU, Alm.del - 2021-22 - Bilag 579: Kommissionens udtalelser vedr. Ukraines, Moldovas og Georgiens ansøgninger om EU-medlemskab

Overall, reform of the law enforcement environment has to be continued on the basis of an

overarching strategic plan.

1.4. Fundamental rights

a) International framework

Ukraine has ratified the main international human rights instruments and its domestic legal

and institutional framework regulating

fundamental rights

broadly follows European and

international standards. The country has not ratified the Convention on preventing and

combating violence against women and domestic violence (Istanbul Convention).

b) Legal and institutional setup

The legal and institutional framework regulating fundamental rights is in place and laws

generally follow European and international standards. However implementation should be

improved and the capacity of the institutions in charge of protection and enforcement of

human rights as well as the implementation of existing strategies and action plans remain

limited. This sometimes impedes the effective enforcement of human rights.

In 2021, Ukraine adopted a new

National Human Rights Strategy 2021-2023

and an

Action

Plan

to strengthen efforts to align structures and procedures of its public administration with

the international framework.

The Ombudsperson institution

–

the Ukrainian Parliament Commissioner for Human Rights

–

is designated

as the National Human Rights Institution and accredited with “A” status by

Global Alliance of National Human Rights Institutions as largely complying with the Paris

Principles.

c) Key fundamental rights issues

The country has 501 judgements of the European Court of Human Rights under enhanced

supervision procedure pending their enforcement. The majority of the cases are repetitive and

relate to violations of the right to an effective remedy, length of criminal proceedings, ill-

treatment including poor detention conditions, length of pre-trial detention and right to liberty

and security.

Ukrainian citizens benefit from

freedom of expression

and there is a vibrant public civic

space.

Media freedom

has also improved significantly in recent years, especially thanks to

online media. Media controlled by oligarchs have disproportionate influence, notably in the

segment of television. Ukraine has found an overall good balance between the preservation of

media freedom and measures against pervasive Russian hybrid and massive disinformation

attacks, being multiplied by some local media outlets.

The Ukrainian Constitution guarantees protection against

discrimination

and the Criminal

Code and several criminal laws contain stand-alone provisions on

hate crimes.

However,

sexual orientation and gender identity are not acknowledged as protected grounds in anti-

discrimination legislation. Legislation required in order to align with the EU

acquis

identified in the National Human Rights Strategy 2021-2023, but remains to be implemented.

Ukraine is gradually progressing on its

gender equality

agenda, with increased political

representation of women (20.5% of parliamentarians elected in 2019 are women) although the

gender pay-gap persists with women overall earning 23% less than men on average in 2019.

Ukraine has not ratified the Istanbul Convention, while gender-based violence remains an

issue. There is increasing tolerance and acceptance of lesbian, gay, bisexual, transgender,

EUU, Alm.del - 2021-22 - Bilag 579: Kommissionens udtalelser vedr. Ukraines, Moldovas og Georgiens ansøgninger om EU-medlemskab

intersex or queer (LGBTIQ) persons in the Ukrainian society and law enforcement is

supportive in protecting LGBTIQ events.

Ukraine has undertaken various legal initiatives to improve the

rights of the child

and ratified

the UN Convention on the Rights of the Child as well as acceded to the three Optional

Protocols to the Convention. It also endorsed the Paris Commitments to protect children from

unlawful recruitment or use by armed groups. At the same time, Ukraine has one of the

highest rates of child institutionalisation in the world (ca. 1.5% of all children), which is a

serious concern and needs to be tackled as a matter of urgency. Likewise, the support for

persons with disabilities (approx. 6% of the population) remains under-resourced and a de-

institutionalisation process needs to be implemented to transition towards community based

care of persons with disabilities.

The rights of persons belonging to

minorities

are constitutionally guaranteed in Ukraine. The

respect for rights of persons belonging to national minorities in the field of education and

language and their representation in elected bodies in all levels of public life needs to be

ensured by fully implementing

the recommendations of the Council of Europe’s Venice

Commission on the education law, implementing those on the State language law and taking

into account the last monitoring cycle of the Framework Convention on National Minorities.

While Ukraine has taken steps to implement the recommendations of the Venice Commission,

it needs to finalise its reform of the legal framework for national minorities and to adopt

effective implementation mechanisms.

Previous shortcomings in investigating and prosecuting of

torture and ill-treatment

by law

enforcement officials are being addressed by the creation of the Department for Procedural

Oversight of Criminal Cases of Torture and Other Serious Violations by Law Enforcement at

the Prosecutor-General's Office in October 2019. The judiciary in Ukraine is under-staffed,

which prevents trials from concluding within a reasonable time and leads to a lack of effective

remedy for victims of serious crimes. Also the penitentiary system is under-resourced and

conditions in places of deprivation of liberty are poor.

2. ECONOMIC CRITERIA

This assessment is based on the Copenhagen criteria related to the existence of a functioning

market economy and the capacity to cope with the competitive pressure and market forces

within the Union.

2.1. Functioning market economy

GDP

per capita

in Ukraine represented 29.8% of the EU average in 2020. The government

has a satisfactory record in carrying out broadly sound macroeconomic policies, against the

backdrop of successful mid-term cooperation with international partners and strong resilience

since the Russia war of aggression (and it is noteworthy how the government has continued to

ensure macroeconomic stability also during the war). However, economic and policy

developments have been held back by a somewhat uneven implementation of structural

reforms, often reflecting lack of political consensus and regular interference from vested

interests, which have delayed reforms, e.g. aiming to improve the business environment,

strengthening the accountability of public finances or legislation on environment and climate

action.

It should be borne in mind that the high degree of uncertainty related to the ongoing war and its evolving

impact affect the predictive power of this assessment, which is largely based on available (pre-war) data.

EUU, Alm.del - 2021-22 - Bilag 579: Kommissionens udtalelser vedr. Ukraines, Moldovas og Georgiens ansøgninger om EU-medlemskab

Indeed, the authorities of Ukraine have demonstrated strong commitment to pursue stability-

oriented macroeconomic policies since the

Maidan revolution.

The government has followed

an ambitious fiscal consolidation that halved public deficit to around 2% of GDP on average

since 2015 and managed to contain the adverse effect of the COVID-19-driven recession on

the public finances. Supported by strong nominal GDP growth, the sustainability of public

debt improved notably, as the debt ratio declined by more than 30 percentage points to below

50% of GDP in 2021. The National Bank of Ukraine introduced in 2016 and subsequently

successfully managed its inflation-targeting framework, thereby preserving the stability of the

flexible exchange rate regime and improving confidence in the national currency. However,

the war context raises new challenges in relation to inflation, which had been reduced

markedly over the last five years to 2.7% in 2020 before reaching 9.4% in 2021. Chronically

low levels of domestic and foreign investment account for the rather subdued real economic

growth of around 3% per year in the four years before the pandemic and the subsequently

persistent relative gap to the standards of living in the EU.

Persistent major weaknesses in the business environment are the main cause for the lack of

investment. In 2019, Ukraine ranked 85

in the global competitiveness index of the World

Economic Forum, primarily due to weak institutions, the high prevalence of market

dominance and an ineffective anti-monopoly policy. Nevertheless, the cancellation of almost

one fifth of the regulatory acts under review in the period 2016-2020 led to some progress

with deregulation. Despite a moderate regulatory burden and no significant legal barriers to

market entry, corruption is widespread and, combined with a still not fully reformed court

system, results in a low degree of contract enforcement, which discourages entrepreneurship

and cross-border business relations. Despite much uncertainty in estimates and improvements

in last years, the share of the informal economy remains significant and could reach as much

as one third of economic activity in Ukraine.

With more than 3 500 state-owned enterprises (SOEs) at central government level, accounting

for one tenth of output and about 18% of employment, the State footprint in Ukraine is

considerable, while SOEs are also recipients of State aid. The SOEs corporate governance

reform has progressed well in view of aligning it with international standards to ensure

independent, professional and transparent profit-oriented management. In this context,

Privatbank was nationalised in 2016 as a result of massive fraud. However, the average return

on equity in SOEs remained at 0.3% in 2019

, in comparison to 8% in the private sector. The

rather successful privatisation of small property and production assets, notably through

electronic auctions, still needs to become a catalyst for large-scale privatisation.

Financial sector stability has been strengthened by the regulatory and supervisory reform

since the 2014-2016 banking crisis, supported by a sizable reduction in non-performing loans

from 58% in 2017 to 30% in 2021 and the recapitalisation of banks to comfortable levels.

With a market share of close to 50% over the last five years, the four state-owned banks

dominate the banking sector. Yet, financial intermediation is still low, with bank loans to the

private sector amounting to only 19% of GDP in 2021. Capital markets and non-bank

financial intermediation are in a very early stage of development and do not offer viable

financing options to companies. Following Russia’s war of aggression, the National Bank of

Ukraine took appropriate steps to safeguard banks’ liquidity and the confidence in the system.

Excluding highly profitable Naftogaz (the largest SOE in Ukraine, with a national monopoly in the oil and gas

business).

EUU, Alm.del - 2021-22 - Bilag 579: Kommissionens udtalelser vedr. Ukraines, Moldovas og Georgiens ansøgninger om EU-medlemskab

An inherited unreformed legislation that lacks flexibility has been hindering the functioning

of the labour market. About 3 million people, or almost 20% of all employed, were in

informal employment in 2021. The unemployment rate remained relatively low at around 9%

in the last years and the economic cycle has had no major impact on it. The economic activity

rate was well above some regional peers and remained relatively unchanged at around 62%

(56% for women) since 2014, in the context of significant labour emigration. Indeed,

according to 2019 estimates, around 2.5 million Ukrainians, or almost 15% of total

employment, were living and working abroad. This labour emigration drove the sizable flows

of remittances, which persistently exceeded the flows of foreign direct investment almost four

times.

2.2. Ability to cope with the competitive pressure and market forces within the EU

A well-developed educational system accounted for a literacy rate of close to 100% and a

rather satisfactory average 2018 PISA assessment where Ukraine scored at rank 40 out of 78

countries. Despite the sizable government spending in the sector (5.7% of GDP in 2021) and a

ratio of gross enrolment in tertiary education of above 80%, the

curricula

and overall quality

could be better aligned with labour market needs. Expenditure on research and development,

which is mostly concentrated in the public sector and had been declining over the last ten

years to below 0.5% in 2020, remained insufficient to heighten human capital in a sustainable

way.

Already prior to the significant damage inflicted by the Russian war of aggression, the state of

the physical infrastructure in Ukraine reflected a persistently low level of general capital

accumulation, with the investment ratio averaging around 17% of GDP since the

Maidan

revolution.

The destruction caused by the war is immense and amounts to hundreds of billions

of Euro.

After the war, it will be critical not just to restore what existed, but also to ‘build

back better’ with a clear link to the broad reform agenda on Ukraine’s European path, in order

to enable Ukraine’s green and digital transition.

Road length and electricity production

per

capita

represented, respectively, 48% and 57% of the EU average in 2020. The degree of

wear of the electricity distribution networks was estimated at close to 50%. Despite the

noticeable growth of the ICT sector in the last years, most companies use only basic digital

tools and technologies.

At a moderate level of diversification, the structure of the Ukrainian economy had changed

little since 2014 and remained concentrated in sectors with low added value. The share of

manufacturing in GDP declined from 12.2% in 2014 to 10.3% in 2021. Trade (13.8% of

GDP), agriculture (10.8% of GDP) and mining (6.7% of GDP) were the other three most

important sectors in 2021. At the same time, the sectors of trade, agriculture and industry

accounted for almost 60% of employment, thereby suggesting a lower labour productivity

relative to the other parts of the economy.

The overall openness of the economy has been shrinking over the last years, with foreign

trade in goods and services as a share of GDP contracting by almost a quarter since 2015 to

82.6 % of GDP in 2021. Yet, economic integration with the EU progressed further thanks to

the implementation of the AA/DCFTA. Ukrainian exports to the EU had broadened in scope

since 2015, also in terms of the number of exporting firms (14 238 exporting companies in

2021, i.e. 22% more than in 2015). The share of exports to the EU, which consisted mostly of

agricultural products, metals and minerals, increased from 28% in 2015 to 36% in 2021. The

share of imports from the EU, which comprised primarily machines, chemicals and minerals,

also strengthened from 36% in 2015 to 41% in 2021. As a WTO member since 2008, Ukraine

has a relatively open trade policy.

EUU, Alm.del - 2021-22 - Bilag 579: Kommissionens udtalelser vedr. Ukraines, Moldovas og Georgiens ansøgninger om EU-medlemskab

3. ABILITY TO ASSUME THE OBLIGATIONS OF MEMBERSHIP

The ability of Ukraine to assume the obligations of membership has been evaluated based on

the following indicators:

The commitments in the Association Agreement and the Deep and Comprehensive

Free Trade Area and their implementation;

The level of adoption, implementation and enforcement of the

acquis

outside the

AA/DCFTA.

The

EU-Ukraine Association Agreement,

including a

Deep and Comprehensive Free

Trade Area

(AA/DFCTA), belongs to a new generation of association agreements between

the EU and partner countries. 21 of its annexes/appendixes contain lists of specific pieces of

the

acquis

with detailed timetable of implementation varying from 2-10 years. The

Agreement captures thus a substantial part of the EU

acquis.

Strong commitment by Ukraine

to the implementation of the AA/DCFTA has led to enhanced bilateral cooperation and

gradual economic integration with the European Union across a wide range of sectors. The

dynamic nature of the Agreement has been exploited through the update of annexes, to cover

also more recent EU

acquis

than initially included in the Agreement. The following annexes

have been recently updated: Annex XXVII on energy, Annex XXI on public procurement,

Annex V on sanitary and phytosanitary measures and Annex XVII on services in 3 sectors:

telecommunication, postal and courier services, and international maritime transport services.

Preliminary agreement has been reached on Annex XXXI on climate action, Annex XV on

approximation of customs legislation and Annex XLIV on financial cooperation with anti-

fraud provisions.

In 2020, the EU and Ukraine launched the Comprehensive Review of the Achievements of

the Agreement’s Objectives under the Article 481 of the AA in order to take full advantage of

the potential of the AA/DCFTA.

The EU-Ukraine Association Agreement provides a comprehensive institutional set-up for

bilateral dialogue and monitoring of the process of gradual approximation and

implementation of Ukraine’s legislation with the EU

acquis.

This encompasses annual

Summit meetings at the highest political level, Association Council, Association Committee

and Association Committee in Trade Configuration, dedicated Sub-Committees in five areas,

as well as six dedicated Cluster Sub-committees covering almost all chapters of the EU

acquis.

The steps that Ukrainian government has taken in implementing the Agreement also

confirms its ability to implement the relevant EU

acquis

including putting in place an

adequate inter-institutional coordination framework. A post of Deputy Prime Minister for EU

and Euro-Atlantic Integration was created in 2016, combined with a reformed Government

Office for the Coordination of European and Euro-Atlantic Integration within the Cabinet of

Ministers. Deputy Ministers responsible for European-integration issues have been appointed

across successive governments in all ministries.

Ukraine’s implementation of the EU

acquis

is documented in the EU’s annual ‘Association

Implementation Reports’ annually since 2016

. Ukraine is also issuing its own report.

EU Member States are closely involved in the implementation of the AA/DCFTA through the

Association Council and the Association Committee. Common Positions are adopted for the

SWD(2020) 329 final

EUU, Alm.del - 2021-22 - Bilag 579: Kommissionens udtalelser vedr. Ukraines, Moldovas og Georgiens ansøgninger om EU-medlemskab

Association Council and a detailed Annotated Agenda is agreed for the Association

Committee. The EU-Ukraine Parliamentary Association Committee involves the European

Parliament and the Ukrainian Parliament into the implementation of the agreement. Civil

society is also monitoring the implementation through the EU

–

Ukrainian Civil Society

Platform.

Following the adoption of the revised enlargement methodology

for the purpose of the EU’s

Enlargement policy, the EU

acquis

is structured around six thematic clusters. The

acquis

these clusters is substantially covered by the AA/DFCTA. Ukraine has gradually

approximated with the EU

acquis

included in the AA/DCFTA and has an overall satisfactory

track record of implementation, though progress is uneven and delays in meeting the

ambitious times lines in the AA/DCFTA have been frequent. Pending a fully-fledged analysis

of all chapters to be carried out at a later stage in the process, the analysis provides examples

of chapters in the clusters in which Ukraine has achieved particularly good results and

highlights areas where there has been a limited approximation to the

acquis.

The

Fundamentals cluster

includes the chapters of the EU

acquis

Judiciary &

fundamental rights, Justice, freedom and security, Public procurement, Statistics, and

Financial control.

This cluster has been mainly assessed under the Political and Economic

criteria sections.

The

Internal market

cluster includes the chapters of the EU

acquis

Free movement of

goods, Free movement for workers, Right of establishment and freedom to provide services,

Free movement of capital, Company law, Intellectual property law, Competition policy,

Financial services, Consumer and health protection.

In this cluster particularly good results

were reached, for example, in the area of

free movement of goods.

Ukraine made good

progress in alignment of the EU

acquis

on Technical Barriers to Trade aiming to comply with

EU standards on product safety. This allowed to start preparations for a future Agreement on

Conformity Assessment and Acceptance of Industrial Products (ACAA) in three sectors for

which a pre-assessment is ongoing.

Good results were also achieved in the area of

competition.

Ukraine has in place a law on

competition, which contains a standard set of rules comparable to most antitrust acts in the

EU. Moreover, during the last years the Ukrainian competition control authority has

significantly improved its case-handling practices aiming to align with the EU laws and

practices on competition. The current State Aids law provides a basis to control State Aid but

needs to be further aligned.

There are other areas in the cluster where the approximation to the EU

acquis

is still limited;

this applies, for example, to the area on

Intellectual Property Rights (IPR).

A number of new

laws were adopted in 2019 and 2020: on trademarks and designs, on patents, on Geographic

Indicators and on IPR border measures. More efforts are needed notably on implementation

and enforcement.

The

Competitiveness and inclusive growth

cluster includes the chapters of the EU

acquis

Information society and media, Taxation, Economic and monetary policy, Social policy and

employment, Enterprise and industrial policy, Science and research, Education and culture,

Customs union.

In this cluster particularly good results were reached, for example, in the area

information society and media

where Ukraine carried out an in-depth sectoral reform and

COM (2020) 57 final

EUU, Alm.del - 2021-22 - Bilag 579: Kommissionens udtalelser vedr. Ukraines, Moldovas og Georgiens ansøgninger om EU-medlemskab

approximation with the EU Digital Single Market

acquis.

Ukraine has adopted the laws on

electronic communications and telecommunications regulator, and has been enforcing those

laws as of the beginning of 2022. The alignment with EU audio-visual media legislation

remains to be completed, particularly as regards the role of media regulator, transparency of

media ownership, and equal market conditions.

Good results were also achieved in the area of

customs.

Ukraine has adopted the necessary

legislation to comply with the requirements and join the conventions on the Common Transit

Procedure and on the simplification of formalities in trade in goods, and to implement the

Authorised Economic Operators Programme, unlocking advantages in customs clearance

procedures and facilitation of trade in goods. Negotiations on the update of the Annex XV

related to the implementation of the legislation of the new Union Customs Code were

successfully finalised. Ukraine’s association to Horizon Europe and the Euratom Research

and Training Programme is a successful

instrument for integration with the EU’s practices in

the field of

research and innovation.

There are other areas in the cluster where the approximation to the

acquis

is still limited, for

example in the area on

social policy and employment.

The cluster on the

Green agenda and sustainable connectivity

includes the chapters of the

acquis

Transport policy, Energy, Trans-European networks, and Environment and climate

change.

In this cluster particularly good results were reached in the area of

energy

as regards

the set-up of its electricity and gas markets, including the unbundling and certification of the

gas- and electricity transmission network operators. Ukraine has also carried out structural

transformation of its electricity and gas market

design, based on the EU rules. Ukraine’s

membership in the Energy Community has given a boost to the process of approximation of

legislation. Energy Efficiency framework legislation is covering substantial parts of the EU

acquis.

The good work in this area allowed Ukraine to be connected to the EU’s electricity

grid in March 2022 and to agree on a gradual increase of electricity exports under clear

technical conditions to be fulfilled. Ukraine has a huge potential for producing renewable

energy and develop a clean hydrogen economy. All these would help reducing energy

dependence on Russian fossil fuels in line with REPowerEU plan and mitigating liquidity

issues in the energy sector. The High Level Working Group on energy market will further

accelerate needed reforms while ensuring regional security of supply, and paving the way for

future electricity and renewable hydrogen trade, as well as rebuilding the energy system under

the REPowerUkraine initiative. For this cluster, the strategic high level dialogue with Ukraine

on the

European Green Deal

and the Ukrainian green transition, which was launched in 2021

has demonstrated high level interest and dedication to the green agenda on the side of the

Ukrainian government.

This is necessary to enable the country’s green transition and to reach

its new climate targets in line with the objectives of the Paris Agreement. The dialogue has

also shown that considerable efforts are needed to ensure legislative alignment for instance

with the EU climate and environmental acquis, as well as to secure the adequate

administrative, financial and organisational capacities to implement and enforce it.

There are other areas in the cluster where the approximation to the

acquis

is still limited, for

example, in the area on

transport,

where only around a third of the relevant EU

acquis

has

been implemented. Significant results have been achieved only in some areas of essential

importance for the reform of the transport sector, such as through the adoption of legislation

on inland waterways and on multimodal transport. Since 2018, the Transport Dialogue helps

COM(2019) 640 final

EUU, Alm.del - 2021-22 - Bilag 579: Kommissionens udtalelser vedr. Ukraines, Moldovas og Georgiens ansøgninger om EU-medlemskab

deepen connectivity and supporting approximation. The implementation of the EU-Ukraine

Common Area Aviation Agreement signed in October 2021 will lead to the progressive

harmonisation of Ukrainian legislation with EU aviation rules and standards.

The cluster

Resources, agriculture and cohesion

includes the chapters of the EU

acquis

Agriculture and rural development, Food safety, veterinary and phytosanitary policy,

Fisheries, Regional policy and coordination of structural instruments, and Financial and

budgetary provisions.

In this cluster particularly good results were reached, for example, in

the area of Food safety, veterinary and phytosanitary policy. The sanitary and phytosanitary

sector stands out as the single most comprehensive and complex area in the AA/DCFTA.

Ukraine has a particular high alignment rate of legislation in the area of food safety, animal

and plant health. Responsibilities deriving from the updated legislation are clearly shared

between the public and the private sectors to ensure products of appropriate safety are put on

the market, both domestically

–

thereby improving the confidence of Ukrainian consumers in

Ukrainian products

–

but also for exports, including to the EU. Ukraine is working in close

cooperation with regional

fisheries

management organisations to align its relevant legislation

to the EU

acquis

and international standards. The country has started to implement some key

mechanisms for

regional policy.

The approximation to the EU

acquis

in the area of

Agriculture and rural development

limited.

The cluster

external relations

includes

External relations and Foreign, security and defence

policy.

Ukraine has an overall good record of alignment with the EU

Common Foreign and

Security Policy

positions. The alignment rate with relevant High Representative statements on

behalf of the EU and Council Decisions was 79% in 2021 (2020: 81%; 2019: 63%; 2018:

46%, 2017: 80%). Ukraine was an active contributor to EUNAVFOR ATALANTA between

November 2010 and November 2011 (provision of a naval officer) and in January-February

2014 (provision of a frigate). Ukraine has also contributed to the EU Battle Groups on

various occasions between 2011 and 2020 and was preparing to participate in the EUFOR

Althea mission which was eventually not possible due to Russia’s war against Ukraine. There

is scope to further enhance cooperation in the area of Common Security and Defence Policy

(CSDP) and to achieve increased convergence with the Common Foreign and Security Policy

(CFSP) including on EU positions. Ukraine has still to fulfil its commitment under Article 8

of the Association Agreement to ratify the Rome Statute of the International Criminal Court.

4. CONCLUSIONS AND RECOMMENDATIONS

Ukraine is a vital parliamentary-presidential democracy with competitive elections at national

and local level, based on a comprehensive constitutional, legislative and institutional

framework which overall corresponds to European and international standards. The legal

framework for a modern public administration is in place but is not yet fully implemented.

Ukraine has undertaken a successful decentralisation reform, including fiscal decentralisation.

Judicial independence has been strengthened and independent anti-corruption bodies have

been set up, including a well-functioning High Anti-Corruption Court. The independence of

all anti-corruption institutions remains crucial. Accountability and efficiency of the judiciary

need to be strengthened and shortcomings in the functioning of law enforcement institutions

addressed, in particular in fighting corruption, which remains a serious challenge across the

country. The legal and institutional framework ensuring the respect for fundamental rights is

EUU, Alm.del - 2021-22 - Bilag 579: Kommissionens udtalelser vedr. Ukraines, Moldovas og Georgiens ansøgninger om EU-medlemskab

in place and overall complied with but implementation should be further improved. An active

and empowered civil society is a defining feature of Ukrainian democracy. The resilience of

Ukrainian institutions has been on full display since the Russian invasion, with the

government continuing to function at all levels. Overall, as regards the

political criteria,

Ukraine is well advanced in reaching the stability of institutions guaranteeing democracy, the

rule of law, human rights and respect for and protection of minorities.

Concerning the

economic criteria,

Ukraine has continued its strong macro-economic record,

demonstrating a noteworthy resilience with macroeconomic and financial stability ensured

also after

Russia’s invasion in February 2022. This reflects not only a very strong political

determination, but also relatively well-functioning institutions. At the same time, ambitious

structural reforms to remove corruption, reduce the State footprint and the persistent influence

of oligarchs, strengthen private property rights and enhance labour market flexibility need to

continue in Ukraine to improve the functioning of its market economy. The capacity of the

country to cope with the competitive pressure in the EU will depend crucially on how post-

war investments in Ukraine are designed and sequenced in order to upgrade its physical

capital, improve educational outcomes and spur innovation.

As regards the

capacity to fulfil the obligations of membership,

Ukraine has worked since

2016 on the implementation of the EU-Ukraine Association Agreement, including a Deep and

Comprehensive Free Trade Area (AA/DFCTA). These agreements already capture an

unprecedented amount of the EU

acquis.

Ukraine has gradually approximated to substantial

elements of the EU

acquis

across many chapters. It has an overall satisfactory track record of

implementation, while in some sectors the country is more advanced than in others.

Ukraine is a European State which has given ample proof of its adherence to the values on

which the European Union is founded. The Commission therefore recommends to the Council

that Ukraine should be given

the perspective to become a member

of the European Union.

Ukraine has demonstrated the resilience of its institutions guaranteeing democracy, rule of

law, human rights and respect for and protection of minorities.

The Commission, therefore, recommends that Ukraine be granted

candidate status,

on the

understanding that the following steps are taken:

enact and implement legislation on a selection procedure for judges of the Constitutional

Court of Ukraine, including a pre-selection process based on evaluation of their integrity

and professional skills, in line with Venice Commission recommendations;

finalise the integrity vetting of the candidates for the High Council of Justice members by

the Ethics Council and the selection of candidate to establish the High Qualification

Commission of Judges of Ukraine;

further strengthen the fight against corruption, in particular at high level, through proactive

and efficient investigations, and a credible track record of prosecutions and convictions;

complete the appointment of a new head of the Specialised Anti-Corruption

Prosecutor’s

Office through certifying the identified winner of the competition and launch and complete

EUU, Alm.del - 2021-22 - Bilag 579: Kommissionens udtalelser vedr. Ukraines, Moldovas og Georgiens ansøgninger om EU-medlemskab

the selection process and appointment for a new Director of the National Anti-Corruption

Bureau of Ukraine;

ensure that anti-money laundering legislation is in compliance with the standards of the

Financial Action Task Force (FATF); adopt an overarching strategic plan for the reform of

the entire law enforcement sector as part of

Ukraine’s security environment;

implement the Anti-Oligarch law to limit the excessive influence of oligarchs in economic,

political, and public life; this should be done in a legally sound manner, taking into account

the forthcoming opinion of the Venice Commission on the relevant legislation;

tackle the influence of vested interests by adopting a

media law that aligns Ukraine’s

legislation with the EU audio-visual media services directive and empowers the

independent media regulator;

finalise the reform of the legal framework for national minorities currently under

preparation as recommended by the Venice Commission, and adopt immediate and

effective implementation mechanisms

The Commission will

monitor Ukraine’s progress in fulfilling these steps and report on

them,

together with a

detailed assessment

of the country, by the end of 2022.

The accession process remains based on

established criteria and conditions.

This allows

any country in the process to progress based on own merits but also means that steps towards

the EU can be reversed if the underlying conditions are not met anymore.