European Commission’s recommendations in the areas of combating corruption and organized crime, financial control, procurement, and reconstruction. 

The European Commission has published its 2025 EU Enlargement Report on Ukraine as a candidate country. Overall, the EC has given a positive assessment of our progress in European integration reforms. 

However, not all areas received equally positive feedback. Regarding the fight against corruption and public procurement, for example, the European Commission noted Ukraine’s limited progress. The EC gave a more positive assessment of the reforms of the Asset Recovery and Management Agency and the Accounting Chamber. 

Overall, after attempts to abolish the independence of the NABU and the SAPO and a series of other harmful legislative decisions, we expected a more critical report from the European Commission. However, it only noted that these events call into question Ukraine’s commitment to the anti-corruption agenda. 

Despite the generally rather mild tone of the document, most of the European Commission’s specific recommendations coincide with what we recommended in our Shadow Report and the study on public procurement.

Transparency International Ukraine has analyzed the European Commission’s assessment of all areas of our expertise in detail, highlighted key recommendations, and drawn attention to important trends that the EC did not mention in the document.

NACP Effectiveness

Compared to the last year’s report on the European Commission’s enlargement policy towards Ukraine, this year’s report was much more critical in its assessment of the work of the National Agency on Corruption Prevention (NACP). Although some recommendations were transferred from the previous to the fresh report, many new ones were added. In particular, the Commission recommended the following: 

1. Expand the personal scope of declarants regarding the patronage of high-ranking officials and simplify and improve the procedures for verifying declarations.
2. Strengthen the NACP’s capacity and focus on identifying unjustified assets.

These recommendations are fully consistent with ours, which we described in both this year’s Shadow Report and the previous one.

In this context, the European Commission noted that, overall, the NACP retains its central role in shaping anti-corruption policy and preventing corruption. However, it also expressed concern about its impartiality and effectiveness in some functions. The Commission called on the Agency to urgently implement all the recommendations of the report published in July 2023 by the commission on the independent assessment of the NACP’s effectiveness. The next such assessment should be carried out without further delay, using a reliable methodology and criteria — another crucial recommendation from the European Commissioners, which we fully support.

The EU also stressed that the Agency needs to ensure that its internal processes are regulated through binding bylaws rather than through non-binding recommendations or similar documents. This issue has also been repeatedly mentioned in both the NACP audit report and our analysis.

Importantly, the report also mentions the need to strengthen the e-declaration system in order to effectively prevent and detect unjustified assets, which is also in line with our recommendations. The Commission pointed out that the system has practical and legal shortcomings, primarily related to the (automated) verification process, in particular the verification methodology and the risk-based approach applied. 

The Commission also noted that a certain degree of external oversight over logical and arithmetic control (LAC) of declarations should be ensured. Back in 2021, we called on the Agency to make the LAC rules accessible, as they determine the level of risk of a declaration and its subsequent selection for verification. The publication of these rules in previous years allowed public experts to identify shortcomings and propose ways to address them. At present, it is not possible to assess whether the rules established by the NACP are sufficiently effective.

Despite this criticism, the report positively assesses the effectiveness and results of lifestyle monitoring of public officials (LSM). TI Ukraine does not share this position, as the current LSM procedure is not properly regulated and effectively duplicates the content of a full declaration check. Moreover, when conducting this type of control, the NACP does not use automated distribution among authorized persons. This poses a risk that specific categories of declarants or even individuals will be checked by specially designated NACP employees, which means there is a possibility of political influence on this process. 

Overall, the Commission emphasized that more attention should be paid to the practical application of financial control tools to high-ranking officials. After all, during the period under review, there were many reports of allegations of unjustified assets and hidden property. Parliament should further increase penalties for unjustified assets and lower the applicable thresholds to make the sanctions regime more relevant and effective. In addition, the obligation to declare assets should also cover the patronage of private offices of high-ranking officials, including advisors and assistants. We fully support these recommendations.

The Enlargement Report also raises the issue of insufficient human resources at the NACP. In particular, it states that competitive salaries and a clear internal personnel policy are necessary to attract and retain qualified employees. In addition, the Agency has created sectoral expert units, which now need to be empowered to provide additional methodological support to anti-corruption units and officials of public authorities and state-owned enterprises. Similarly, the skills, professionalism, and accountability of anti-corruption commissioners need to be strengthened. We agree that the NACP’s staffing should be enhanced, given its heavy workload, particularly due to the Agency’s central role in anti-corruption mainstreaming in negotiations with the EU.

In the section on effectiveness, the European Commission noted that the number of reports of corruption received by the NACP increased significantly, from 534 in 2023 to 982 in 2024, but the number of confirmed whistleblowers fell from 25 in 2023 to 17 in 2024. Only a small number of individuals were convicted in criminal proceedings based on whistleblower reports (0.47% of proceedings in ordinary courts; 5% in proceedings in the High Anti-Corruption Court).

The Commission also mentioned the anti-corruption review of draft laws by the NACP and the specialized committee of the Verkhovna Rada. In their opinion, which is consistent with ours, this review is not currently systematic, and the recommendations made by the Agency based on its results are not consistently implemented.

With regard to strategic documents, the European Commission assessed the impact of the Anti-Corruption Strategy for 2021-2025 and the State Anti-Corruption Program as limited due to gaps in their implementation, indicating the need for nationwide participation.

The Commission called for the development and adoption of a new Anti-Corruption Strategy for 2026-2030 and a State Anti-Corruption Program without delay in a transparent and inclusive manner. They should include an ambitious but realistic level of priority measures in areas most prone to corruption, such as public procurement, reconstruction, energy, infrastructure, construction and land management, the judiciary and law enforcement, customs and taxation, extractive industries and natural resources. To avoid problems with the implementation of the future strategy, it is necessary to strengthen capacities and resources, particularly at the level of the NACP. In addition, there is an urgent need to strengthen law enforcement structures and the regular participation of (high-level) political coordination bodies. All of these recommendations also echo those we described in the Shadow Report.

Furthermore, the Commission rightly noted that most public bodies have adopted anti-corruption programs, but these rarely address root causes of corruption, and the NACP needs to strengthen its quality control over them. Certain local authorities and smaller state-owned enterprises are not required to develop such programs, which remains an issue that needs to be addressed.

Finally, the report mentions that the NACP needs to develop its capacity to effectively and impartially monitor compliance with lobbying legislation. This is a new area of responsibility for the Agency, which we believe does indeed require additional attention.

Thus, with regard to the work of the NACP, the European Commission recommended:

• Expanding the list of declarants regarding the patronage of private offices of high-ranking officials.
• Simplifying and improving the procedures for verifying declarations. 
• Strengthening the NACP’s capacity and focusing on identifying unjustified assets.
• Urgently implementing the outstanding recommendations of the report based on the results of an independent assessment of the Agency’s effectiveness in 2023 and ensuring that a new assessment is carried out in a timely manner using an updated methodology.
• Ensuring the regulation of the NACP’s internal processes through binding bylaws.
• Publishing the LAC rules to monitor their application.
• Enhancing the NACP’s staffing, in particular by increasing salaries.
• Developing and adopting a new Anti-Corruption Strategy for 2026-2030 and a State Anti-Corruption Program without delay in a transparent and inclusive manner. 
• Developing the NACP’s capacity to effectively and impartially monitor compliance with lobbying legislation.

What did the European Commission not mention?

Despite comprehensive recommendations on the development of the next cycle of anti-corruption policy, the Commission briefly mentioned the limited impact of existing strategic documents. Last year’s report referred to the need to introduce sanctions for systematic non-compliance with the State Anti-Corruption Program (SAP) measures, which was quite specific. At the same time, this year, European Commissioners limited themselves to a general opinion on the need for nationwide participation. Our Shadow Report describes specific problems with the implementation of the current Anti-Corruption Strategy and the SAP and recommendations on how to solve them.

This year, the European Commission did not mention the shortcomings of the Unified Whistleblower’s Reporting Portal. These include the requirement for whistleblowers to provide a legal assessment of a possible offense at the stage of submitting a report, the ability of the whistleblower’s supervisor to view the archive of such reports, the lack of a TOR version of the portal, and other non-compliance with best standards of anonymity and confidentiality. The challenges of the Politdata register of political parties reporting o were neither mentioned.

Conclusion

This year’s assessment of the NACP’s work by the European Commission covers virtually all of the Agency’s problems that have long been criticized by the public. Despite its controversial position on lifestyle monitoring of declarants, the EC has described the necessary reforms of the financial control system quite comprehensively, with an emphasis on transparency and inclusiveness. Updates in this area should be a priority for the NACP, and we hope that the Agency will heed the EU.

Anti-corruption segment of criminal justice

Compared to the previous European Commission report, which noted that Ukraine had made some progress in the fight against corruption, this year’s assessment was more limited. The Commission noted that its recommendations from last year had been partially implemented and remained relevant. 

At the same time, the report states that the number of indictments in NABU cases has increased, while the total number of suspects and defendants has decreased slightly. At the same time, the number of indictments in corruption cases investigated by the National Police (NPU), the State Bureau of Investigations (SBI), and the Economic Security Bureau of Ukraine (ESBU) has decreased. Many cases remained without a court decision, and the number of closed cases also increased. We drew attention to this problem in the Shadow Report and emphasized that the reasons for the increase in the number of closed cases need to be thoroughly analyzed. At the same time, it is necessary to improve statistical reporting mechanisms so that the results of the work of pre-trial investigation bodies and court proceedings are more comparable.

The European Commission noted that the number of cases considered by the High Anti-Corruption Court (HACC) remains at a level similar to the previous year, while the number of convictions, including final convictions, has increased slightly. 

However, the EC draws attention to a critical problem: the average length of court proceedings is very high, leading to a backlog of cases. We have repeatedly highlighted this problem in our reports monitoring the work of the HACC.

This issue has become even more acute due to the ineffective second competition of HACC judges, which may lead to even greater court overload due to unfilled vacancies. Therefore, it is crucial to successfully complete the new competition for HACC judge positions with the involvement of the Public Council of International Experts (PCIE), identifying honest and professional judges. Also, in order to eliminate significant delays, reduce the backlog of cases, and shorten the time required for consideration, the High Anti-Corruption Court should develop a comprehensive strategy to ensure the effectiveness of the judicial process.

The European Commission notes positive progress in civil forfeiture but identifies the low number of seizures and final confiscations of assets in high-level corruption cases as a critical issue. Further progress is needed in this area, including through effective parallel financial investigations. This issue should also be addressed in line with the measures set out in the relevant Roadmap.

The European Commission notes that the legal framework for combating corruption is in place but needs to be further strengthened. 

At the same time, Ukraine should extend the statute of limitations and review the grounds for its interruption and suspension in line with European standards to ensure sufficient time for proper investigation, prosecution, and adjudication of corruption and corruption-related offenses. This is also in line with our recommendations from the latest report on monitoring the work of the HACC. During the year, this recommendation has become even more relevant due to the growing number of cases that may be closed due to the expiry of the statute of limitations. The Rule of Law Roadmap provides for the implementation of these measures only by the second quarter of 2027, which is an unacceptably long period.

The EC paid particular attention to legislative initiatives that exempt certain defense companies from criminal liability or introduce unjustified restrictions on criminal liability and investigations, including for corruption and other economic crimes. This refers, in particular, to draft law No. 12439, which needs to be substantially revised.

The European Commission also reported on the risk of undermining public trust in anti-corruption institutions through unfounded public statements and the creation in June 2025 of a Temporary Investigative Commission with a broad mandate to investigate possible corruption in law enforcement agencies, courts, and judicial bodies. This risks going beyond the limits imposed by the separation of powers. 

The European Commission also noted that the position of the Prosecutor General remains politicized. It recommended adopting legislative changes to make the procedures for selecting and dismissing the Prosecutor General more objective, transparent, and merit-based. We also emphasized this in our materials.

Thus, with regard to the fight against corruption, the European Commission recommended:

• Resolving the problem of lengthy court proceedings in corruption cases at the highest level. This could be facilitated by the introduction of an institution to counter abuse of cases in the High Anti-Corruption Court.
• Extending the statute of limitations and reviewing the grounds for its interruption and suspension in accordance with European standards. 
• Removing the provision on the automatic closure of criminal cases due to the expiry of the pre-trial investigation period and revising the current time limits to ensure sufficient time for criminal investigations. 
• Improving confiscation mechanisms and ensuring effective parallel financial investigations.
• Implementing all recommendations of the NABU audit. 
• Removing restrictions that prevent the full deployment of the iCase system. 
• Granting the NABU access to autonomous wiretapping and independent forensic examinations, as well as the ability to wiretap communications without involving other agencies. 
• Granting the head of the SAPO the authority to initiate investigations and approve investigative actions against MPs independently of the Prosecutor General. 
• Reviewing exceptions for high-ranking officials regarding sole consideration of cases to ensure proportionality and impact on the effectiveness of judicial proceedings. 
• Improving the rules on the jurisdiction of the NABU and introducing guarantees for their proper enforcement. 

What did the European Commission not mention?

The European Commission’s report does not directly address the issue of enforcement of penalties in the form of property confiscation, which we have written about in separate studies. However, the section on justice states that Ukraine should adopt additional legislation to improve the enforcement of court decisions related to monetary and non-monetary obligations. 

In addition, it does not explicitly mention the problem that the issue of early release of convicted persons is decided by the local court at the place of imprisonment. The reason for this may be the focus on the stages of pre-trial investigation and court proceedings in corruption cases and the limited communication about the results of the enforcement of such decisions, even though they are the main goal of the entire process.

Conclusion

The European Commission rightly notes the progress made in building a track record of fighting high-level corruption, but at the same time identifies critical systemic challenges. Of particular importance are the recommendations on improving the statute of limitations, granting the NABU autonomous wiretapping powers, abolishing the automatic closure of cases due to the expiry of the pre-trial investigation period, and strengthening the effectiveness of asset confiscation. These issues require urgent corrective measures at the legislative and institutional levels.

Fight against organized crime

As in the previous year, the European Commission noted some progress in the fight against organized crime this year. The report states that the legal framework is partially aligned with the EU acquis, but the capacity to fight serious and organized crime needs to be improved. 

The European Commission notes that Ukrainian law enforcement agencies have begun to implement some measures within the framework of the comprehensive strategic plan for law enforcement reform (CSP). The EC stresses that the continued implementation of the CSP until the end of 2027, together with the relevant parts of the Rule of Law Roadmap in Chapter 24, is crucial for reforming the civilian security sector in line with European standards. We consider this recommendation to be important. As our Shadow Report shows, the CSP Action Plan contains points aimed at strengthening public control and accountability of the NPU, the SBI, and the ESBU. However, certain measures need to be improved during the drafting of regulatory acts, especially regarding the involvement of independent (including international) experts in the competition commissions for the selection of managers. 

The European Commission notes that Ukraine has strengthened the legal framework for financial investigations by adopting the relevant implementing legislation. It also notes that the Ministry of Internal Affairs is preparing a Financial Investigation Strategy. However, it is important that the Ministry of Internal Affairs conducts public consultations with experts during the preparation of this document.  

The European Commission shares the recommendations expressed in the Shadow Report to ensure the systematic, effective, and timely conduct of financial investigations. To this end, it is important to allocate sufficient resources, provide training, grant access to the necessary databases, and develop practical guidelines and tools.  

The European Commission also drew attention to the law that disproportionately restricted access to public registers during martial law. The issue is that the President of Ukraine did not heed the calls of more than 50 civil society organizations and journalists to veto the law on the specifics of providing information from public electronic registers. The European Commission expressed concern about these changes, as investigations into financial crimes are often initiated based on reports from civil society and the media. The EC also drew attention to controversial amendments to the Criminal Procedure Code, which are ostensibly aimed at protecting business. They could undermine the effectiveness of financial and criminal investigations into economic crimes and the investigative independence of the ESBU. 

The European Commission noted positively in its report the adoption of the law on the reform of the Asset Recovery and Management Agency (ARMA), which introduced a competitive selection process for the agency’s head, regular independent audits, and a revised asset management system. However, it noted that for the reform to be fully implemented, relevant implementing legislation needs to be adopted, and an independent assessment of the Agency’s effectiveness needs to be carried out. In our view, this primarily concerns amendments to the Criminal Procedure Code of Ukraine to ensure effective interaction between the ARMA and the prosecution authorities. 

In line with our Shadow Report, the European Commission noted that many convictions for money laundering were based on plea bargains with subsequent release without imprisonment. It noted that financial investigations are still hampered by the lack of reliable information on property ownership, company structures, bank records, and cross-border transactions. The “follow the money” approach is largely absent. 

The EC report also pointed to the problem of the lack of consolidated statistics on confiscations and mentioned that less than 3% of the assets traced by the ARMA were transferred to it for management. An audit of the agency by the Accounting Chamber revealed some shortcomings in asset management and the selection of managers, which should be addressed in light of the agency’s reform. 

The European Commission noted that the appointment of the head of the State Financial Monitoring Service (SFMS) took place without a competition due to the provisions of the legislation on martial law and stressed that the SFMS should have the necessary capabilities and resources to effectively fulfill its mandate, in particular to ensure timely and high-quality intelligence. 

It is important that the EC did not overlook the fact that the current rules and judicial practice regarding the inadmissibility of evidence collected by an unauthorized law enforcement agency, together with the unclear division and fragmentation of competences, undermine the fight against complex forms of organized crime and increase the risk of corruption. This refers to the practice of the Supreme Court of declaring evidence collected in violation of the rules of jurisdiction inadmissible. Unfortunately, such examples still occur. 

In general, with regard to financial investigations, confiscations, and law enforcement management, the European Commission recommended: 

• Implementing the Comprehensive Strategic Plan for Law Enforcement Reform (CSP) by the end of 2027, together with the relevant parts of the Rule of Law Roadmap in Section 24. 
• Ensuring the effectiveness of financial investigations by allocating sufficient resources and databases so that financial investigations are conducted systematically, effectively, and at an early stage in parallel with criminal investigations. 
• Adopting legislation to establish a bank account registry and close the legislative gap on virtual assets. 
• Restoring access to information on real estate rights registered to any legal entities in electronic form. 
• Refraining from adopting controversial amendments to the CPC ostensibly aimed at “protecting business” but in reality, designed to undermine the effectiveness of financial and criminal investigations of economic crimes.
• Improving asset confiscation mechanisms to allow for pre-trial seizure of assets for extended confiscation and confiscation of proceeds (“special forfeiture”). Rules on confiscation without conviction in criminal proceedings should be further aligned with the EU Directive on the recovery and confiscation of assets.
• Strengthening the capabilities of the State Financial Monitoring Service. 
• Introducing transparent procedures for selecting the heads of the NPU and the SBI.
• Addressing shortcomings in the work of the Asset Recovery and Management Agency in light of ongoing reforms. 

What did the European Commission not mention?

Although the European Commission draws attention to the reform of the ARMA, it does not assess how effectively the Asset Recovery Strategy is being implemented. At the same time, we can note that by the end of 2025, according to the Action Plan for its implementation, measures should be introduced, in particular, regarding the reform of the confiscation mechanism. Unfortunately, we do not see their implementation.

Also, despite the fact that the report explicitly states that the head of the State Financial Monitoring Service was appointed without a competition, the European Commission did not pay attention to the fact that the current legislation does not provide for high-quality competitive procedures, although such competitions are held for positions in anti-corruption bodies.

Conclusion

Ukraine has a serious task ahead of it in the fight against organized crime. The effectiveness of the fight against corruption depends, among other things, on the completion of this task. After all, corruption is an integral element that determines the existence of organized crime, and due to unfounded prosecutions and institutional conflicts between the NABU/SAPO and other pre-trial investigation bodies, the focus of attention is blurred and valuable resources are lost. 

Regional policy

First of all, the European Commission noted progress in lawmaking in the field of regional policy, in particular the approval of the Action Plan for 2025–2027 on the implementation of the State Strategy for Regional Development for 2024–2027. At the same time, the Report emphasizes that the aforementioned Plan, as well as community development strategies, should more closely integrate the requirements of public investment management reform. It also stresses the importance of developing digital tools, primarily the DREAM system (which is a “bank” of public investment projects within the reform). 

In terms of local planning, the EC generally sees a need to clarify and streamline the content and structure of local strategic documents.” Local authorities are advised to logically combine such documents with sources of funding. In other words, strategies should be based on an assessment of real needs and capabilities.

The European Commission also noted a number of other decisions at the central level. These include steps such as the appointment of the Deputy Prime Minister for Recovery – Minister of Community and Territorial Development as the head of the Interdepartmental Coordination Commission; provision in the 2025 state budget for funding to restore the State Regional Development Fund, etc. According to the EC, Ukraine should make more efforts to create a legal system that would involve local authorities, the public, and partners in all stages of planning, in the spirit of the European Code of Conduct on Partnership. 

The report emphasizes transparent and accountable financial management, especially in matters of recovery. The European Commission recommends developing an approach to reporting on the use of Ukraine Facility funds and other sources of financing so that the entire process complies with the principles of EU cohesion policy: subsidiarity (so that decisions are made at the level where they will be implemented), effectiveness (so that funds deliver tangible results), accountability (so that authorities explain their actions), and the participation of subnational authorities in decision-making (so that communities have a real say in the allocation of resources).

For local authorities, this means planning recovery projects taking into account the real needs of the community, using allocated funds transparently, reporting regularly, involving the public in decision-making, and ensuring control over the effectiveness and efficiency of resource use. 

The European Commission makes similar recommendations on auditing and control, noting that internal and external audit functions exist (in particular, the Accounting Chamber, which now has the power to audit local budgets), but their work does not yet meet international standards. The report describes the implementation of audits at the community level as “unevenly effective.” For local authorities, this could be an opportunity to strengthen their own internal control and financial transparency mechanisms: according to the Transparent Cities program, less than a third of Ukraine’s 100 largest cities have internal audit departments, and only four of them report on the results of their work.

Therefore, the European Commission recommends that local authorities:

• Develop or update strategic documents for communities based on an assessment of needs and resources. Back up strategies with implementation plans. 
• Maintain dialogue with the public, business representatives, and international partners through proper communication and proactive engagement.
• Use the DREAM system to manage and monitor recovery projects.
• Enhance transparency in financial management through regular reporting on the use of budget funds. 
• Develop or expand internal audit and control mechanisms. 

What did the European Commission not mention? 

The European Commission mentions administrative capacity in the field of regional policy only at the level of the Ministry of Community and Territorial Development. At the same time, the report does not address the issue of personnel stability in local self-government, which remains one of the challenges for communities in wartime.  

In addition, the European Commission considers the fight against corruption at the regional level through the prism of control and audit, while the development of local anti-corruption infrastructure is no less important – strengthening the role of anti-corruption commissioners, approving and implementing local anti-corruption programs, training on integrity issues, etc.

Conclusions

Guided by the European Commission’s recommendations, local authorities are contributing to Ukraine’s European integration and opening up opportunities to strengthen governance, increase trust, and move towards sustainable transparency practices. The extent to which communities consistently and effectively build transparent financial processes, strategic planning, and interaction with residents will determine their readiness for European rules of the game. 

Financial control

External audit

In this year’s report, the European Commission has, for the first time in recent years, highly praised Ukraine’s progress in the field of external audit. Amendments to the Law “On the Accounting Chamber” adopted at the end of last year played a significant role in this. They helped bring national legislation closer to the International Standards for Supreme Audit Institutions (ISSAI) and expanded the mandate of the Accounting Chamber (AC), which was one of the European Commission’s recommendations in 2024.

However, the key recommendation regarding the activities of the country’s supreme audit institution remained almost unchanged compared to the last year: it is necessary to strengthen the political and financial independence of the Accounting Chamber, as well as to enahnce its administrative capacity, in particular by completing the formation of its management. And over the past year, this recommendation has become even more relevant.

To strengthen the political independence of the body in 2024, amendments to the law introduced, among other things, an updated competitive selection procedure for members of the Accounting Chamber, with a decisive voting right for international experts and an emphasis on transparency. However, more than 10 months later, the competition has not yet begun due to the parliament’s inability to form an advisory group of experts (AGE) to select candidates. TI Ukraine has called on parliamentarians to consider the experience and reputation of experts and form an AGE to unblock the competition.

In the context of the need to strengthen the administrative capacity of the body, it should be noted that more than a third (35%) of the positions of state auditors remain vacant in the Accounting Chamber. After approving the competitive selection procedure at the end of January 2025 and transferring current employees to the positions of state auditors, the body announced only two competitions, both in July 2025. As a result, only 15 state auditors were appointed, which is approximately 3% of the total staff. Under these conditions, the effective functioning of the Accounting Chamber remains questionable, especially given the significant expansion of its control powers, as noted by the European Commission in its report.

Despite progress in improving national legislation, full compliance with international standards remains a challenge. European experts emphasize that the Accounting Chamber should not only continue to implement approved audit methodologies in its work but also create quality control mechanisms to regularly assess the effectiveness of its audits. This will ensure their compliance with international standards of transparency and accountability.

However, not all of the EC’s conclusions and recommendations regarding the work of the Accounting Chamber can be agreed with.

With regard to the financial independence of the body, at the end of 2024, officials of the Accounting Chamber, including state auditors, were removed from under the scope of the Law on Public Service, and the amounts of their official salaries and allowances were established directly in the specialized law, which leaves them outside the influence of the government. In addition, in January 2025, parliament amended the Budget Code to introduce a special procedure for the government and parliament to consider the Accounting Chamber’s budget requests. In this context, the EC’s recommendation to further strengthen the financial independence of the Accounting Chamber appears debatable.

In their report, European experts also noted progress in monitoring the implementation of audit recommendations and developing specialized IT tools. The requirement to carry out such monitoring and publish its results was enshrined in the Law on the Accounting Chamber at the end of 2024. At the same time, the AC Regulations stipulate that monitoring must be carried out in accordance with the procedure approved by the authority. However, neither the published internal documents of the Accounting Chamber nor the materials on the implementation of recommendations mention the relevant Procedure for Monitoring the Implementation of Decisions. This gives reason to assume that such a document has not been approved.

Thus, for further European integration progress in the field of external audit, Ukraine needs to:

• Strengthen the political and financial independence of the Accounting Chamber, as well as enhance its administrative capacity, in particular by completing the formation of its management.
• In addition, the European Commission recommended that the Accounting Chamber:
• Prioritize the effective implementation of approved audit methodologies based on International Standards for Supreme Audit Institutions in its work.
• Develop robust quality assurance mechanisms to regularly assess the effectiveness of its audits, ensuring their compliance with international standards of transparency and accountability.
• Select audits for inclusion in the 2026 work plan based on risk and impact assessments.
• Increase the number of audits of consolidated financial statements of public sector entities and budgets in 2026.

Conclusions

In its report, the European Commission gave a positive assessment of Ukraine’s progress in the field of external audit. However, it should be noted that it focused more on progress in adopting legislative changes. In our opinion, Ukraine would also benefit from a critical assessment of the lack of real implementation of these innovations. In particular, the fact that in more than 10 months, the Ukrainian parliament had not been able to take a key step to strengthen the political independence of the Accounting Chamber — to form a commission to launch a competitive selection process for its members.

As for the recommendations provided, most of them, with the exception of strengthening the financial independence of the Accounting Chamber, are relevant and generally consistent with the position of TI Ukraine.

Protecting the EU’s financial interests

One of the priorities for improving the financial control system in the process of Ukraine’s European integration is to ensure adequate protection of the EU’s financial interests. This issue has become particularly relevant following the launch of the Ukraine Facility macro-financial assistance program, which provides for €50 billion from the EU in the form of grants and loans to support the recovery, reconstruction, and modernization of Ukraine for the period from 2024 to 2027.

In September last year, as part of the introduction of a national mechanism for coordinating the interaction of state authorities to protect the financial interests of Ukraine and the EU, the government authorized the State Audit Service of Ukraine to perform the functions of the Anti-Fraud Coordination Service. In addition, Ukraine has committed itself, within the framework of the Ukraine Facility, to amend its legislation by the end of 2025 in order to strengthen the capacity of the State Audit Service in the field of protecting the financial interests of the EU (this refers to the harmonization of our practices with international standards) and to increase the effectiveness of procurement monitoring measures.

As of early November, the relevant legislative changes had not been adopted, so the European Commission formulated a similar recommendation: in accordance with the Plan for Ukraine, amend the legislation on financial control to strengthen the system of state financial control, including the role and powers of the State Audit Service in protecting the EU’s financial interests.

TI Ukraine supports this recommendation. We have previously emphasized that problems may arise at the level of national legislation when the State Audit Service exercises the powers of the Anti-Fraud Coordination Service. The State Audit Service should assist the European Anti-Fraud Office (OLAF) in conducting administrative investigations and audits on the territory of Ukraine. However, its specialists do not have sufficient powers to access documents and information held by business entities and individuals that may be necessary for investigating violations within the Ukraine Facility. Therefore, without amendments to the legislation, investigations into possible misuse of EU funds may be significantly complicated.

In its report, the European Commission noted the partial alignment of Ukraine’s national legislation with the EU acquis in the area of protecting the EU’s financial interests. At the same time, it recommended that Ukraine fully adapt its legislation to the requirements of the EU Directive on combating fraud affecting the financial interests of the European Union. This will enable the competent national authorities to cooperate effectively with OLAF during investigations in Ukraine, including on-the-spot checks and access to information contained in national databases relevant to the investigations.

In the context of protecting the EU’s financial interests, there is also a mention of the need to develop and implement a National Anti-Fraud Strategy to protect EU funds. This task has been assigned to the State Audit Service of Ukraine, but there is no public information about the approval of such a strategy.

In the area of protecting the EU’s financial interests, the European Commission has recommended:

• Amending the legislation on financial control to strengthen the system of state financial control, including the role and powers of the State Audit Service in protecting the EU’s financial interests.
• Adapting national legislation to the requirements of the EU Directive on combating fraud affecting the financial interests of the European Union.
• Developing and implementing a National Anti-Fraud Strategy to protect EU funds.

Conclusions

In summary, the European Commission’s recommendations on ensuring adequate protection of the EU’s financial interests appear to be well-founded and largely coincide with the position of TI Ukraine.

Internal audit

In the area of internal audit, Ukraine has only partially implemented last year’s recommendation from the European Commission; experts noted in the report legislative changes that: 

• updated the definition of “internal audit” in line with the Global Standards for Internal Auditing; 
• clarified and strengthened management responsibility for the functioning of internal control and the implementation of internal audit; 
• provided for the creation of audit committees in key budget administrators.

However, as in the previous report, the key recommendation remains unchanged: Ukraine needs to improve the quality of internal audit in the public sector by applying the new Global Standards for Internal Auditing and strengthening the role and capacity of the Ministry of Finance’s Department for Harmonization of State Internal Financial Control.

Notably, the 2025 report repeats not only the recommendations in this area, but also references from last year’s report, in particular, about “creating a strategic framework for internal audit as part of the 2022-2025 public finance management reform strategy” and “establishing a commission for the certification of the internal audit function at the Ministry of Finance.” This leads to the conclusion that there has been no significant progress in the field of internal audit.

Therefore, in the area of internal audit, the European Commission recommended:

• Improving the quality of internal audit in the public sector by applying the new Global Standards for Internal Audit.
• Strengthening the role and capacity of the Department for Harmonization of Public Internal Financial Control of the Ministry of Finance.

Public procurement

In assessing the area of public procurement, the European Commission noted that Ukraine has a certain level of preparedness and has made limited progress. Last year’s recommendations have been only partially implemented and remain valid. 

This year’s progress was made possible primarily by the implementation of the Strategy for Reforming the Public Procurement System for 2024-2026 (hereinafter referred to as the Strategy) and its Action Plan. In particular, the European Commission positively noted the steps taken to professionalize procuring entities, develop the Prozorro system, and increase transparency and efficiency. 

At the same time, the European Commission recommends adjusting the Strategy to more clearly define its goals, objectives, and performance indicators. The DOZORRO project of TI Ukraine also drew attention to this, as in some cases the indicators currently refer more to the process than to the achievement of a specific result. 

Another goal of improving the Strategy should be to optimize control measures and the fight against corruption. In particular, the mechanism for refusing participants in procurement should become more effective on all grounds provided for by the EU acquis, especially in connection with corruption crimes. The report also mentions integrity criteria for tender participants — it is necessary to ensure that these requirements are met.

The European Commission recalled that Ukraine does not have a separate anti-corruption strategy specifically for the procurement sector and that one needs to be approved. However, we hope that next year a separate section of the state’s Anti-Corruption Strategy will be devoted to public procurement. It is currently being developed, and TI Ukraine is preparing a study on the main corruption problems in this area, the results of which will form the basis of the strategy. Calling for the adoption of the Anti-Corruption Strategy without delay, the European Commission mentions public procurement among the areas most prone to corruption and which should be included in the strategy as a matter of priority.

According to the European Commission’s assessment, procurement legislation is still only partially aligned with the EU acquis. The new law on public procurement, which the European Commission itself calls long-awaited, has not yet been adopted. Draft law No. 11520 is still being finalized and prepared for consideration in the second reading. 

Instead, in the summer, the Verkhovna Rada adopted a new law on public-private partnerships (PPPs), which is also included in the procurement section of the Association Agreement. However, the European Commission notes that it has significant differences from the EU acquis, in particular, it does not fully equalize access to PPPs for Ukrainian and European companies. Therefore, this law needs to be revised, and the PPP and concession system needs to be made more attractive for investment. TI Ukraine has pointed out the risks and problems of the draft law, such as insufficient transparency of procedures and excessive discretion of tender committees.

Therefore, the main recommendation for the coming year, as last year, is to make progress in bringing legislation on public procurement, PPPs, concessions, and defense procurement into line with the EU acquis. At the same time, it is important to ensure that European companies can participate in domestic procurement, PPPs, and concessions on an equal footing with Ukrainian companies, without any discrimination. 

In general, we support this recommendation as an indispensable condition for our European integration progress. At the same time, work on draft law No. 11520 has shown that some Ukrainian approaches to the regulation and implementation of procurement are more advanced than those in EU countries. For example, this year TI Ukraine submitted proposals for changes to European public procurement regulations during the European Commission’s public consultations.

When reviewing the procurement legislation, the European Commission also noted in its report on temporary exceptions to it. These exceptions concern the grounds for concluding contracts directly instead of competitive procedures for amounts above the threshold. This right is provided for by Cabinet Resolution No. 1178 of October 12, 2022 (as amended), which regulates the specifics of public procurement during martial law. The European Commission notes that the scope of exceptions related primarily to the needs of martial law has been expanded. However, unlike the previous report, there are no specific recommendations on this issue this year. Apparently, this is covered by the general requirement to harmonize legislation with the EU acquis. After all, during the work on draft law No. 11520, the list of exceptions is one of the most controversial parts. 

The European Commission also briefly mentions that legislation on the right to legal remedy in the field of public procurement is partially harmonized with the EU acquis. However, it does not provide specific warnings or recommendations as to what the non-compliance of the other part consists of and what steps need to be taken to eliminate it.

Instead, considerable attention is paid to procurement control. The Ministry of Finance’s adoption of a new methodology for determining automatic risk indicators, their list, and the procedure for their application was recognized as a positive step in this area. However, as noted in the report, the State Audit Service initiates only a small portion of its monitoring based on risk indicators. As for the results of monitoring, according to the European Commission’s assessment, they are rarely challenged in court, and even if they are, the courts more often side with the plaintiffs. 

European Commissioners characterize internal and external control in procurement as weak, especially at the early stage, before the conclusion of a contract. The same applies to risk assessment within procuring entities and the prevention of conflicts of interest in the field. The European Commission links the limited effectiveness of internal control and audit to a lack of human and financial resources. It notes that only in a few cases are the identified violations successfully eliminated, especially in the case of large-scale contracts.

Therefore, the key recommendation is to focus legislation on strengthening control measures for procurement procedures and to strengthen the role and capabilities of monitoring. In particular, priority should be given to risk-based preventive control measures and effective responses to identified violations. Similar recommendations were previously provided by TI Ukraine. This challenge is particularly important for procurement using EU funds, and the European Commission refers to the Ukraine Plan in these recommendations.

Defense procurement was also paid more attention in this year’s report. The European Commission noted the introduction of authorized persons in military units, a long-awaited reform. At the same time, it pointed out that the legislation still lacks clarity regarding the distinction between civilian and defense procurement, as well as cases of political interference in the work of organizations that carry out centralized procurement for the military. Most likely, this refers to the scandal surrounding the change of the head of the DPA in the winter of 2025, when Arsen Zhumadilov was appointed to the position of head of the enterprise instead of Maryna Bezrukova.

As for procurement practices, the European Commission indicated that 68% of the value of our procurement transactions is accounted for by competitive procedures. However, there are discrepancies in the calculations of the competition indicator: according to the European Commission, it averaged 1.55 participants per lot, while according to BI Prozorro, it was 1.59 in 2023 and 1.88 in 2024. However, it remains indisputable that the share of tenders with a single participant remains high.

In assessing these procurement transactions, the European Commission notes an excessive dependence on price as the sole criterion for awarding contracts — in its opinion, this indicates an imbalance in the prioritization of price over quality. The latter point seems debatable, since maximum quality requirements can be stipulated in the terms of a procurement transaction without non-price criteria. In addition, procuring entities who deem it appropriate have the opportunity to set them, although they rarely do so. The report also notes limited progress in the area of mandatory energy efficiency criteria.

European Commissioners recommend that procuring entities continue to build their capacity in procurement process management. The update of training resources, in particular free online courses, was positively noted. The report also mentioned the creation of a new Central Procurement Agency for the Recovery Agency. 

Other recommended steps include introducing new tools and electronic contracts in the Prozorro system and improving interaction with the DREAM system and other state IT systems. 

And since procurement is carried out in all areas of public administration and social life, it is mentioned in many sections of the report. For example, in the healthcare sector, the fight against corruption in medical procurement is considered a key priority, and when assessing the development of the transport sector, the European Commission did not ignore Ukrzaliznytsia’s fight against several cases of corruption, including in the procurement sector. 

Thus, for further European integration progress in the field of public procurement, the European Commission recommends:

• Adopting a new law on public procurement, PPPs, and concessions, in particular by eliminating discriminatory conditions for EU companies.
• Adjusting the Strategy with a clearer definition of goals, objectives, and performance indicators.
• Strengthening procurement control, in particular monitoring, focusing on preventive risk-oriented measures and effective response to violations.
• Optimizing control and anti-corruption measures, ensure that the grounds for refusing to participate in procurement comply with the EU acquis and are effective.
• Covering the area of procurement in the future Anti-Corruption Strategy.
• Building the capacity of contracting authorities to manage procurement.
• Introducing new tools and electronic contracts in the Prozorro system, improving interaction with the DREAM system and other state IT systems. 

What did the European Commission not mention?

There are other problems in the field of procurement, such as the inability to appeal the qualification and decisions of procuring entities in above-threshold procurement transactions in the Prozorro Market electronic catalog. However, this and some other problems should be resolved by the adoption of draft law No. 11520. 

Conclusions

In summary, the European Commission’s recommendations seem reasonable and largely coincide with the positions of TI Ukraine. Efforts should be focused on harmonizing legislation with the EU acquis, while preserving our own achievements in this area, as well as improving control over procurement.

Reconstruction

Although the European Commission’s report does not contain a separate section on reconstruction, various parts of the document contain references and recommendations relating to this area.

In its report, the EC classified reconstruction as one of the areas most vulnerable to corruption and stressed the need to include priority and realistic measures to prevent it in the new State Anti-Corruption Strategy for 2026-2030 and the corresponding State Anti-Corruption Program, which should be developed in a transparent and inclusive manner. In this context, it should be noted that the NACP has held and plans to continue discussions with experts from civil society on priority issues in the field of recovery as part of the preparation of the draft Anti-Corruption Strategy.

The issue of developing and implementing a recovery strategy is directly linked to the field of regional policy. Despite the progress made in strategic planning at the local level, European experts have drawn attention to the need to streamline and refine the content and structure of local strategic documents.

This is an important recommendation, as the system for planning and implementing regional policy currently consists of more than 20 documents at all levels of government (national, regional, and local). All of these documents relate in one way or another to similar planning processes, including the strategic vision for recovery, and the structure of the documents is often duplicated. This applies in particular to recovery plans and comprehensive recovery programs at the local community level, which are developed on the basis of the same data and contain similar structural sections in terms of content.

At the institutional level, European experts noted the creation of a centralized procurement organization under the State Agency for Infrastructure Recovery and Development as part of an experimental government project to minimize risks and standardize procurement procedures in the recovery process. 

With regard to the Agency for Restoration, the European Commission recommended intensifying efforts to complete the legal and regulatory framework in order to consolidate the agency as a transparent and accountable institution with clearly defined powers and adequate resources to effectively carry out its tasks. Previously, Transparency International Ukraine also drew attention to the Agency’s limited influence on the activities of regional recovery services, due to their status as separate legal entities, and stressed the need to reorganize the body into a single legal entity in order to strengthen control over the work of regional units.

The European Commission’s report also noted the development of DREAM as an element of public investment management reform, which covers, in particular, the financing of recovery projects. It is based on the creation of unified project portfolios at the central, regional, and local levels, which are based on transparent mechanisms for prioritization, evaluation, and selection for the formation of public investment project portfolios. Despite noticeable progress, European experts drew attention to the need to formally define the role of the DREAM system and ensure its continued functioning. This recommendation coincides with the position of TI Ukraine — the status and obligation to apply the system to recovery projects must be defined and enshrined in law.

For areas related to recovery, the European Commission recommended, in particular:

• Clarifying the legal requirements for the content and structure of local strategic documents.
• Intensifying efforts to complete the legal and regulatory process with a view to consolidating the State Agency for Infrastructure Recovery and Development.
• Formally establishing the role of the DREAM system and ensuring its continued functioning.

Conclusion

TI Ukraine welcomes the European Commission’s recommendations on reconstruction, as they are consistent with the organization’s position and emphasize the need to enhance the transparency, accountability, and coordination of reconstruction processes. The European Commission’s report draws attention to key issues previously identified by TI Ukraine, in particular the need for legal regulation of the status of the Agency for Restoration and increased control over its regional divisions, streamlining the strategic planning document system, and legally enshrining the DREAM system.

Competition for the High Qualification Commission of Judges

The European Commission separately mentioned the issue of ending the participation of international experts in the competition for the position of member of the High Qualification Commission of Judges. In particular, it pointed out that although the terms of office of almost all members of the HQCJ will end in 2027, the formation of the Selection Commission is the responsibility of unreformed national bodies. Therefore, the report emphasizes that the formation of a new Selection Commission should be discontinued and that the participation of independent experts nominated by international partners should be continued instead. 

This recommendation of the report is clearly positive. We have repeatedly pointed out that the termination of the participation of international experts in the competition for the HQCJ threatens the independence of future competitions for judicial positions and creates a negative precedent for the withdrawal of independent experts from one of the key competitions. The importance of this was also emphasized by 90 civil society organizations. Draft law No. 13382 has already been registered in parliament, which could extend the participation of international experts. However, since its registration in June, the specialized committee of the Verkhovna Rada has not yet managed to consider it.