![handle is hein.crs/govekcz0001 and id is 1 raw text is: Congressional Research Service
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U.S. Direct Financial Support for Ukraine
January 10, 2023
Background
In 2022, Congress enacted four emergency supplemental
funding measures to address the crisis caused by Russia's
February 2022 invasion of Ukraine. These include the
March 2022 Ukraine Supplemental Appropriations Act,
2022 (FY2022 USAA, P.L. 117-103, Div. N); the May
2022 Additional Ukraine Supplemental Appropriations Act,
2022 (FY2022 AUSAA, P.L. 117-128); the September
2022 Ukraine Supplemental Appropriations Act, 2023
(FY2023 USAA, P.L. 117-180, Div. B); and the December
2022 Additional Ukraine Supplemental Appropriations Act,
2023 (FY2023 AUSAA, P.L. 117-328, Div. M). As of
January 1, 2023, Congress has appropriated a total of $113
billion in FY2022 and FY2023 in response to Russia's war
against Ukraine.
To date, the U.S. Agency for International Development
(USAID) has obligated $13 billion of the appropriated
funding for direct financial support for the Government of
Ukraine's (GOU's) central budget. USAID has not yet
obligated FY2023 AUSAA funds for direct financial
support. The agency has provided such support via three
World Bank mechanisms, rather than bilaterally.
Figure 1. U.S. Direct Financial Support for the GOU
Total Obligated: $13.0 billion
Source: CRS, compiled from USAID and World Bank reporting.
World Bank Mechanisms
The Multi-Donor Trust Fund for Ukraine (MDTF), a
mechanism established in March 2022 that is meant to
reduce procedural steps and transaction costs associated
with individual transfers by consolidating resources across
donors for transfer to Ukraine.
The Public Expenditures for Administrative Capacity
Endurance (PEACE) Fund, a mechanism established in
June 2022 meant to support the GOU's ability to continue
compensating public employees. The initial scope included
government salaries (at the central and regional levels) and
school employees, and later expanded to pensions and other
social services.
The Transfer Out MDTF, a mechanism specifically for
direct U.S. support to Ukraine established in July 2022. It is
meant for the same purposes as the MDTF, but is intended
to allow a rapid, standalone U.S.-World Bank agreement
not subject to the negotiated terms of the MDTF or PEACE
Fund.
The World Bank recently established a new Ukraine
Relief, Recovery, Reconstruction and Reform Trust Fund
(URTF); the United States has not funded that mechanism.
Congressional Oversight Measures
Funds appropriated for direct financial support to Ukraine
are subject to a number of congressional oversight
measures, including those in the laws described above;
annual Department of State, Foreign Operations and
Related Programs (SFOPS) appropriations; and the Foreign
Assistance Act of 1961, as amended (P.L. 87-195).
(Separate oversight provisions address funding provided
pursuant to other laws, particularly military assistance.)
Section 507 of the FY2022 AUSAA, for example, sets
certain requirements specifically for direct financial support
to Ukraine. Section 507(b) requires that such support be
subject to a memorandum of understanding [MOU] that
describes how the funds proposed to be made available will
be used and includes appropriate safeguards for
transparency and accountability. The section also requires
that such funds be maintained in a separate, auditable
account and may not be comingled with any other funds.
Sections 507(c) and 507(d) establish notification and
reporting requirements, including reports to Congress
detailing results achieved by the financial support every
90 days. The FY2023 USAA shortens the timeline for
preparing the required reports to 45 days and requires that
such reports also include the metrics established to
measure such results. That timeline holds today; Congress
received the most recent of such reports in December 2022.
World Bank Oversight Measures
As noted, the United States channels direct U.S. financial
support to Ukraine through the World Bank. These funds
are subject to the World Bank's Standard Conditions for
multi-donor trust funds; a bilateral U.S.-World Bank
Administration Agreement detailing obligations between
the parties; and an agreement between Ukraine and the
World Bank detailing financing terms, scopes of activity,
requirements, and oversight standards.
The MDTF was created under a broader project framework
that predates the renewed onset of hostilities. Before
withdrawal of funds, that framework requires that (1) the
World Bank affirm it is satisfied with the GOU's
macroeconomic policy framework, and (2) that Ukraine
show progress toward carrying out reforms to land policy,
pensions, inland waterways, and anti-corruption programs,
among others. The World Bank affirmed in November 2021](ViewImageLocal?handle=hein.crs/govekcz0001&div=1&collection=&method=preview&ext=.png&size=3)
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