Support to the Antimonopoly Committee of Ukraine for enforcing State Aid rules

The current EU-funded Project, “Support to the Antimonopoly Committee of Ukraine for enforcing State Aid rules” (the Project) originally commenced on 1 September 2017 and was intended to operate for 36 months. Following approval of a non-cost extension, the Project was extended until the end of December 2022. Overall objective of the projects is to support the establishment of an effective State aid control and monitoring system in Ukraine as required under the EU-Ukraine Association Agreement. In pursuing this objective, the Project has created a better understanding of the role and impact of state aid on the public and private sectors and, in particular, has facilitated more effective economic and financial support for businesses and economic development. Following the onset of military aggression against Ukraine on 24 February 2022, the EU Delegation requested contractors to re-assess their ability to continue the implementation of contracts and offered three options for activity, in summary: to adjust, continue, or suspend/terminate activities. Following this request, as contractors, the focus was on the means by which it was possible for the Project to maintain support and communications with the staff of the main beneficiary – AMCU – and other national, regional and local stakeholders, and the identification of ways in which some level of activity could be maintained, and more importantly, to ensure that work could be effectively resumed as soon as conditions in Ukraine allowed. It was eventually recognised that it was unlikely that progress could be made, in the short term at least, on some activities, but it would be possible to continue implementation of some activities under project Component 1 (Support to the establishment of effective SA control system in Ukraine), in particular, to respond to requests for support received from the beneficiary. It was considered that these tasks could carried out through remote working and direct communication with the relevant members of AMCU staff, under the supervision and coordination of the Project Team Leader.   It was subsequently agreed with the EU Delegation on 7 April 2022 that, “a partial suspension of the Project, but keeping open component 1, “Support to the establishment of effective SA control system in Ukraine”, and primarily sub-component 1.1, Legislative proposals for aligned legal framework with EU State Aid rules, to be repurposed for the following activities:

• preparatory work for possible amendments to the Law on SA and possible amendments to other laws to address the war or post-war situation, analysis and expert opinion on current LSA modifications;
• framework AMCU decisions for State aid schemes to address (i) the war situation, (ii) the post-war reconstruction needs of the country and (iii) the support needs of businesses of the country,
• possible EU accession related analysis.”

  The Delegation’s, and the contractor’s, aim being to support the needs of the beneficiary while preserving resources for when the situation allows to return to some degree of normality.   The benefits of the adoption of this approach can now be viewed in retrospect in the recent, rapidly changing political context. In a visit to Kyiv on 8 April 2022, the President of the European Commission, Ursula von der Leyen, stated that, “Ukraine belongs to the European family. And today, Ukraine takes another important step towards EU membership. We will accelerate the process as much as we can, while ensuring all conditions are respected”. Following this, an initial questionnaire was submitted by the Commission to the Ukrainian Government intended as providing the basis for accelerating the process of EU Accession. The Commission has now presented further questionnaires specifying other issues to be addressed and the EU has granted Ukraine candidate country status, further accelerating the Accession process. The first period of partial suspension on the Project commenced on 7 April 2022 when the decision by the EU Delegation was received and as a result of a further agreement the Project work has been able to continue operating in the same way as the initial period for an additional 3 months – to 7 October 2022. This is, of course, subject to any further review of priorities in the intervening period and any further tasks identified. There continues to remain considerable uncertainty about the extent to which the current conflict will continue or the point at which the project work can return to some degree of normality and the date at which a return to working in Kyiv may be possible. While the scale of work undertaken has been influenced by the remote working methods which have proved to be possible within the project resources available, progress has been maintained and support provided for the beneficiary and stakeholders. A range of activities and tasks, representing substantial inputs on Component 1, and in addition those areas of relevant joint activity which have been specified by the main beneficiary -AMCU, and as priority issues in discussion with the EU Delegation have continued to be undertaken. Maintaining effective Project activities has been seen as not simply providing continued support for the main beneficiary and other Ukrainian institutions, but also providing foundations for future working and particularly a number of areas of joint work which focus on speeding up Ukraine's accession to the EU.