By Resolution No. 1113 of 09.09.2026 (hereinafter – Resolution No. 1113), the Cabinet of Ministers of Ukraine approved the Procedure of the same name (hereinafter – the Procedure) for the return of European Union grant funds under the Interreg and Interreg NEXT programmes. For the first time, the document establishes the grounds on which a grant, non-repayable by its nature, must be returned, who bears responsibility for penalties and exchange rate differences, and what consequences a partner faces for failure to comply with a recovery request.

The list of grounds for return is exhaustive and comprises five items. The most common of them is not related to any violation: funds must be returned if part of the pre-financing remained unused within the project term or if its use was not substantiated by reporting documents. Return is also required in the event of early termination of the grant contract or unilateral refusal to perform it, regardless of the reasons; therefore, even a good-faith withdrawal from the project due to loss of capacity or changed circumstances triggers the same procedure.

The recovery request proceeds in two stages. The programme’s managing authority submits it to the lead partner, who in turn submits it to the resident partner if the violation occurred through the latter’s fault. The resident partner settles accounts only with the lead partner, while the lead partner is liable to the managing authority for the entire amount, regardless of the part of the project in which the problem arose. The repayment deadline is set by the managing authority itself, and penalties are charged for late payment, payable by the partner whose fault gave rise to the request. The risk of exchange rate differences between the receipt of the grant in euros and the return of funds, as well as bank service costs, are also borne by the relevant partner and are not compensated in any way.

The Procedure distinguishes between budgetary and non-budgetary recipients. A budget funds administrator returns the grant within the appropriations approved by the Law on the State Budget of Ukraine or by the decision on the local budget for the relevant year, whereas a partner without the status of a budgetary institution must set out the return mechanism in advance, including deadlines, settlement currency, and the dispute resolution procedure, directly in the grant contract or subsidy contract.

Source  https://biz.ligazakon.net