EU report on Ukraine: Key findings and conditions for accession

Despite Russia's full-scale invasion in February 2022 and an aggressive war, Ukraine continues to move forward with democratic and rule-of-law reforms. The process was further accelerated by the granting of EU candidate status in June 2022.

No elections were held during the reporting period. Overall, the legal framework continues to be conducive to the organization of democratic elections. The reform of the electoral legal framework should continue, taking into account the outstanding recommendations of the OSCE (Organization for Security and Co-operation in Europe) ODIHR (Office for Democratic Institutions and Human Rights).

The work of the Verkhovna Rada continues to be marked by extraordinary circumstances related to Russian aggression. Nevertheless, legislative tasks are being carried out systematically, laying the groundwork for an ongoing democratic decision-making process.

Key decisions, especially on defense/security issues, were adopted with clear cross-party majorities. Significant attention was paid to legislation related to EU integration. The Rada performed important functions, while concerns were raised about limited transparency for security reasons and weakened oversight of the executive.

Public administration reform

Ukraine has a certain level of preparedness in the area of public administration reform, with limited progress made during the reporting period. While the Ukrainian administration proved its resilience during the full-scale invasion, reforms slowed or stopped in several sectors, including merit-based recruitment and selection, job classification and salary reform, and the rollout of the human resources management information system. Digitalization of service delivery has reached a high level.

Local governance

In terms of multi-level governance, the achievements of the decentralization reform continued, with municipalities emerging as a pillar of Ukraine's resilience. In general, after the successful completion of the territorial part of decentralization, other elements of the reform have yet to be finalized.

Local self-government in the liberated territories and areas near the front line should be gradually restored where the security situation allows. The newly created Ministry of Recovery should integrate the infrastructure and regional development portfolio to stimulate recovery and reconstruction at the local level, based on the systematic participation of local authorities and associations. The local financial base needs to be strengthened.

Judicial reform

Regarding the functioning of the judiciary, Ukraine needs to continue its efforts. Despite Russia's aggressive war, Ukraine continued to provide legal services and made good progress in implementing the 2021 judicial reform focused on integrity and professionalism.

The High Council of Justice and the High Qualification Commission of Judges were reconstituted following a transparent process with significant involvement of independent experts. This will allow the government to begin filling more than 2,000 judicial vacancies and assessing (vetting) the qualifications of about 1,900 current judges.

Despite significant difficulties, Ukrainian institutions have demonstrated excellent resilience and have put in place the necessary legislative and organizational measures to continue providing legal services to citizens and businesses during the war.

In 2022, most courts maintained their disclosure rate (the ratio of the number of resolved cases to the number of cases received in that year) at 100% or even higher. In August 2023, Ukraine adopted a law ensuring the transparent selection of Constitutional Court judges in line with the recommendations of the Venice Commission and began the implementation process by establishing an Advisory Group of Experts and announcing competitions to the Constitutional Court.

Legislation on the election of judges still needs to be improved, and a more transparent procedure for the selection of managerial-level prosecutors needs to be introduced. In August and September 2023, Ukraine adopted two laws to re-establish disciplinary proceedings against judges and to establish an independent service of disciplinary inspectors based on a transparent and meritocratic selection procedure involving internationally nominated experts.

Following the liquidation of the Kyiv District Administrative Court, a new administrative court should be established to hear cases involving central authorities, staffed by vetted judges. Legislative and institutional changes are needed to ensure a stronger disciplinary system for prosecutors.

To increase transparency, efficiency, and access to justice, Ukraine should also continue its efforts to digitalize the judiciary. Systematic measures are still needed to advance the reform of the enforcement of judgments, including the implementation of European Court of Human Rights (ECHR) judgments. To ensure the sustainability of efforts to strengthen the rule of law, Ukraine should continue legal education reform.

Since the start of the full-scale invasion, Ukraine has faced an unprecedented number of atrocities committed by the Russian military. Ukrainian institutions have made significant efforts to address this problem and bring those responsible for international crimes to justice. Several law enforcement agencies, on the instructions of the Prosecutor General's Office, have launched investigations into these complex crimes.

To this end, specialized investigative and prosecutorial departments have been established. As a result, 107,951 incidents related to various crimes were officially registered. Ukrainian courts have indicted 267 people and convicted 63 for war crimes. Close international cooperation has been established, including with the International Criminal Court and its prosecutors, Eurojust, Europol, and many EU member states. To improve the effectiveness of investigating international crimes and cooperating with the International Criminal Court, Ukraine should further harmonize its legal framework with international standards.

Fighting corruption

During the reporting period, some progress was made, in particular, in establishing and strengthening a comprehensive institutional framework for fighting corruption and gradually gaining experience in investigating, prosecuting, and adjudicating high-level corruption cases.

Ukraine has intensified reforms in this area since becoming an EU candidate. New legislative, policy and institutional improvements have been made, including the adoption of a national anti-corruption strategy accompanied by a comprehensive state program for its implementation.

The new heads of the Specialized Anti-Corruption Prosecutor's Office (SAPO) and the National Anti-Corruption Bureau of Ukraine (NABU) were appointed in July 2022 and March 2023, respectively, following transparent and meritocratic selection procedures involving independent experts. Since their appointment, the NABU and the SAPO have intensified cooperation and high-level investigations of corruption cases.

The electronic asset declaration system, which was suspended after the introduction of martial law, has been restored and opened to the public, albeit with some potential shortcomings related to the powers of the National Agency for the Prevention of Corruption (NAPC) and the data to be verified.

The Parliament also passed a law that would weaken administrative liability for electronic asset declarations, but the President did not sign the law and it has not entered into force. To ensure the effectiveness and sustainability of its anti-corruption efforts, Ukraine should continue to build a credible track record of investigations, prosecutions, and final judgments in high-level corruption cases, including the seizure and confiscation of criminal assets.

The timely and consistent implementation of the State Anti-Corruption Program for 2023-2025 should also be pursued. Efforts are also needed to further optimize and improve substantive and procedural criminal law. To cope with the growing workload, the number of NABU employees, SAPO prosecutors, and judges of the High Anti-Corruption Court should be increased. In addition, the SAPO should be further protected from possible undue interference by improving the selection procedures for the head of the SAPO and its key officials, increasing its organizational and procedural autonomy, and improving its accountability system.

Fighting organized crime

Some progress has been made. Ukraine has a dedicated strategic and institutional framework for fighting organized crime and a good level of international cooperation. The number of joint operations with EU member states is growing. Measures are being taken to combat the illicit flow of firearms, human trafficking, and cybercrime. The development of an electronic case management system in the criminal justice system has begun. A national strategy for asset recovery was adopted.

Russia's aggressive war has affected the institutional capacity to fight organized crime, but the relevant institutions have demonstrated resilience and continued their work. However, the legal framework and operational capacity to fight organized crime remain weak.

Procedural gaps, overlapping jurisdictions, widespread corruption, and poor IT infrastructure also impede the effective fight against organized crime. Interagency coordination needs to be further strengthened. Ukraine should also launch a national serious organized crime threat assessment in line with EU standards and build capacity to implement it.

The legal framework and institutional capacity still need to be improved in financial investigations, asset recovery, and management. Transparent and merit-based selection of leadership and staff, as well as a robust accountability system, should be introduced in the Bureau of Economic Security, the key agency tasked with fighting economic crime.

Fundamental rights

Ukraine generally adheres to international human rights instruments and has ratified most international conventions on the protection of fundamental rights. Citizens have been severely affected by Russia's violations of fundamental rights, which the Ukrainian authorities and civil society have been trying to remedy since February 2022.

At the beginning of the full-scale invasion, Ukraine imposed martial law, which led to some restrictions on rights and freedoms, but so far these have remained largely proportionate to actual needs and applied with caution. The number of reported cases of discrimination against minorities, including LGBTIQ and national minorities, as well as anti-Semitic acts, has significantly decreased.

Regarding the rights of persons belonging to national minorities, Ukraine needs to implement the recommendations of the June 2023 opinion of the Venice Commission and the subsequent October 2023 opinion. Further efforts are also needed to ensure that people with disabilities can enjoy their rights under the UN Convention on the Rights of Persons with Disabilities.

At the same time, important reforms have been adopted, such as a new media law. Ukraine also ratified the Istanbul Convention on Preventing and Combating Violence against Women and Domestic Violence in July 2022 and adopted a state strategy until 2030 to ensure equal rights between men and women, which is to be implemented.

Only limited progress has been made in the area of prevention of torture and ill-treatment in prisons and other forms of detention, where cultural change within state authorities needs to be materialized and further measures are needed to prevent and ensure accountability for such acts.

A law on personal data protection in line with EU legislation should be adopted. The situation of children (but also of older people) in institutions, as well as of persons with disabilities, remains difficult, but commitments to deinstitutionalize childcare and to make Ukraine a barrier-free environment are promising and should be implemented as a priority. Similarly, support for the Roma community should be strengthened through a concrete and targeted action plan.

Given the breadth of issues relating to fundamental rights, including numerous violations by Russia, the Ukrainian Parliament Commissioner for Human Rights faces serious challenges in terms of its current capacity to effectively address the full range of its responsibilities.

Freedom of speech

Despite the full-scale war, Ukraine is at an average level of preparedness in the area of freedom of speech. Good progress was made during the reporting period with the adoption of the media law in December 2022, despite the restrictions on media and journalists imposed during the war.

Ukrainian citizens enjoy freedom of expression and critical reporting in the media. However, there is a concentration of media due to the collapse of the media and advertising market, especially in the television segment. This has limited people's access to pluralistic media in Ukraine. The situation of journalists remains precarious, both economically and, since the beginning of the full-scale invasion, physically.

Ukraine needs to envision new ways to ensure a post-war structure for pluralistic and independent non-online media (including television), including a long-term perspective for public service broadcasting and the independence of the national regulator.

Ukrainian economy

Due to the effects of Russia's full-scale invasion, as well as pre-existing structural economic problems, the Ukrainian economy is between an early stage and some level of preparation for a functioning market economy. The conduct of monetary policy, overall economic management, and the institutional and regulatory environment have faced significant challenges.

Despite these challenges, the Ukrainian authorities have responded quickly and with an eye toward overall stability, although circumstances have also led to temporary disruptions in some important elements of the market economy. In 2022, the economy contracted by 29.1%, demonstrating greater resilience than initially expected. To promote financial stability and strengthen confidence in the national currency, the National Bank of Ukraine suspended the successfully managed inflation targeting system, fixed and devalued the exchange rate, and raised the key policy rate.

The banking sector remained fully operational and stable with sufficient liquidity, in part due to previous reforms and supervisory easing measures. The state of public finances deteriorated markedly due to the duration of the war and its impact on economic activity. This has reversed the significant fiscal consolidation and related debt reduction achieved in the years before the COVID-19 pandemic. Significant internal and external population movements have had a profound impact on the labor market.

Ability to cope with competition in the EU

Due to the consequences of Russia's full-scale invasion and structural economic problems, Ukraine is at an early stage of preparation in terms of its ability to cope with competitive pressures and market forces within the EU. The war has severely damaged Ukraine's capital infrastructure and triggered a massive outflow of people, which has had a profound impact on the economy.

Investments in research and innovation were low, and educational outcomes did not meet labor market needs, despite rather high costs and relatively high formal educational attainment.

The structure of the Ukrainian economy remained concentrated in low-value-added industries. Although trade integration with the EU has recently advanced, including through the creation of the Deep and Comprehensive Free Trade Area, it remains rather low. At the same time, the international response in support of Ukraine has been massive over the past year, and the upcoming reconstruction could also help support modernization, in which Ukraine specializes in higher value-added chains, and help strengthen its competitiveness.

Relations with EU countries

In terms of good neighborly relations and regional cooperation, Ukraine maintains good bilateral relations with other enlargement countries and with neighboring EU member states. They have been strengthened against the backdrop of Russia's aggressive war, which has led to further deepening of cooperation with many of these countries, marked by several high-level visits and significant humanitarian, military, and financial support.

Progress in Ukraine's capacity to assume EU membership obligations

In terms of Ukraine's capacity to assume the obligations of EU membership, the country continued to work on aligning itself with the acquis (a set of rights and obligations of EU member states) in many areas.

The internal market cluster is key for preparing Ukraine for the requirements of the EU internal market and is of great importance for the implementation of the Deep and Comprehensive Free Trade Area. Good progress was made in the areas of free movement of capital and intellectual property legislation. Some progress has been made in other areas, especially in financial services, the free movement of goods, the right to establish businesses, and the freedom to provide services and company law. Progress has been limited in competition policy, consumer protection, and health, and there has been no progress in freedom of movement due to Russia's full-scale invasion of Ukraine.

The competitiveness and inclusive growth cluster is closely linked to the ability and potential for recovery and reconstruction. This requires increasing competitiveness and building a sustainable and inclusive economy. Good progress was made in digital transformation and media, as well as in the Customs Union. Some progress was made in taxation, education, and culture. Limited progress was made in social policy and employment, business and industrial policy, and science and research. No progress was made in economic and monetary policy due to the full-scale Russian invasion, which required emergency economic policy measures.

"The Green Agenda", the Resilient Connections Cluster, and related reforms are also inextricably linked to Ukraine's recovery during and after the war. Russia's aggressive war against Ukraine has caused enormous damage to the transportation infrastructure, environment, and climate. Progress has been made in several areas within the cluster: good progress in the environment, some progress in energy and trans-European networks, while progress has been limited in climate change and transport policy.

In the areas covered by the resources, agriculture, and cohesion cluster, progress was made in three areas in particular, namely agriculture and rural development, food safety and veterinary and phytosanitary policy, and fisheries and aquaculture. Progress was limited in regional policy and coordination of structural instruments, as well as financial and budgetary provisions.

In the external relations cluster, Ukraine has a good level of preparation. In terms of foreign, security, and defense policy, Ukraine has made good progress, increasing the level of compliance with EU decisions and declarations of the EU's common foreign and security policy to 93% (2022). Progress was limited in the area of EU trade policy.

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Given the foregoing, the European Commission recommends to the European Council that it open accession negotiations with Ukraine and will monitor progress and compliance in all areas related to the launch of negotiations. The next report to the European Council is scheduled for March 2024.