The European Union is tightening the rules for screening foreign direct investments. The EU Council has approved an updated regulation that will strengthen oversight of deals in strategic sectors—energy, transportation, artificial intelligence, digital infrastructure, critical raw materials, and dual-use goods.
The new rules will replace the mechanism in place since 2020. The main change is that all EU countries must have their own investment screening systems, and the approach to such deals will become more uniform across the entire union.
This is particularly important for Ukraine amid EU accession negotiations and future post-war reconstruction. The country needs significant foreign capital for energy, infrastructure, industry, logistics, defense technologies, IT, and raw material extraction. It is precisely these sectors that will now be under closer scrutiny from Brussels.
In practice, this means that Ukraine will have to gradually align its regulations with European standards for investor screening. This may apply to major deals involving capital from third countries, especially when it comes to strategic assets, critical infrastructure, or dual-use technologies.
For Ukrainian businesses, the new rules are also important when entering the EU market. The acquisition of assets, the creation of joint ventures, or investments in sensitive sectors in EU countries may be subject to more detailed scrutiny.
On the other hand, this could be an advantage for Ukraine. If Kyiv establishes a transparent system for monitoring foreign investments, it will boost confidence from the EU and major international investors.
For Ukraine, the main takeaway is simple: in the country’s recovery, it will be not only the volume of foreign capital that matters, but also its origin, transparency, and compliance with EU economic security standards.
The European Bank for Reconstruction and Development (EBRD) and the European Union (EU) are expanding their support program for micro, small, and medium-sized enterprises (MSMEs) and larger companies in Ukraine, which will enable the mobilization of EUR2 billion in new financing through EBRD partner banks thanks to EUR315 million in additional EU support, the financial institution announced on its website.
The additional EU support is being implemented through the Ukraine Investment Framework (UIF) program and includes EUR200 million in guarantees, EUR105 million in grants, and EUR10 million in technical assistance.
As noted in the press release, the new package is expected to provide loans to at least 3,000 MSMEs and preserve approximately 180,000 jobs.
Funds will be provided through the EBRD’s partner financial institutions in Ukraine. According to the bank’s assessment, the expansion of the program should support businesses’ access to financing amid the war, particularly against the backdrop of rising borrowing costs, disrupted logistics, and companies’ need to replace or modernize damaged equipment.
Ukrainian companies will be able to receive investment incentives in the form of EU grants to cover 10% to 30% of the cost of critical capital investments, primarily in high-efficiency and “green” technologies.
At least 50% of these grant incentives will be directed toward priority categories of MSMEs: enterprises with assets damaged or destroyed as a result of the war, businesses in frontline zones, veteran-owned companies, enterprises supporting the reintegration of internally displaced persons and people with disabilities, micro-companies, startups, small farms, as well as businesses led by women and young people.
The program also provides for support to restore activity in Ukraine’s insurance market, specifically the development of solutions for insuring military risks. As part of a pilot project, insurance subsidies are planned to be provided to MSMEs.
Part of the expanded support will be implemented through the Enterprise Security Enhancement (ESE) mechanism, which the EBRD is rolling out on a pilot basis in collaboration with partner financial institutions in Ukraine. It allows banks to reduce the debt burden for borrowers whose assets have been damaged by the war.
To implement this mechanism, it is planned to use EUR 200 million in first-loss guarantees provided by the EU as part of the new phase of the program. Such coverage of credit risk associated with the loss of assets due to the war is intended to support lending for capital investments and the continuity of economic activity.
This support builds on the first phase of the Financial Inclusion Recovery Program, which confirmed significant demand from Ukrainian businesses for financing through partner banks.
As reported, in May the EBRD launched a pilot ESE donor mechanism in Ukraine to partially write off business debt on investment loans in the event of damage to financed assets resulting from hostilities: with PrivatBank—in the amount of EUR 6.8 million, and with Raiffeisen Bank—EUR 1.2 million.
In 2025, the EBRD allocated a record EUR2.9 billion in financing to Ukraine, including EUR1.2 billion through partner financial institutions, as well as EUR504 million under portfolio risk-sharing programs, which facilitated new lending of up to EUR1.6 billion.
The European Bank for Reconstruction and Development (EBRD) and the European Union (EU) are launching the “Ukrainian SME Recovery” program, which is expected to provide approximately EUR135 million in financing and advisory support for small and medium-sized enterprises, larger companies, and startups in Ukraine, the financial institution announced on its website.
EU support under the program is being implemented through the Ukraine Investment Framework (UIF) and amounts to EUR46 million, including EUR41 million in guarantees and approximately EUR5 million in technical assistance.
According to the announcement, the program provides for financing at least 15 investment projects by Ukrainian companies, as well as advisory support for up to 34 startups.
The first component of the program will be implemented through the EBRD’s Risk Sharing Framework (RSF) in collaboration with partner banks. EU guarantees will be used to cover the first-loss risks of the EBRD and partner banks on a parity basis.
According to the bank’s assessment, this will expand Ukrainian companies’ access to long-term financing, particularly for the restoration and expansion of production assets and capacity.
The second component involves expanding the EBRD’s Star Venture program in Ukraine, aimed at supporting high-potential startups and developing an innovative ecosystem.
Under this initiative, selected startups, accelerators, and venture capital firms will receive advisory support. The funding is intended to help early-stage companies cover operational and market development costs and enhance their readiness to attract commercial investment.
The EBRD is the largest institutional investor in Ukraine. Since the start of Russia’s full-scale invasion in February 2022, the bank has allocated nearly EUR10 billion to Ukraine.
Ukrainian men of conscription age who are already under temporary protection in European Union countries should not lose their status under the current scheme. Any restrictions currently under discussion within the EU are likely to apply primarily to new applicants, should the temporary protection scheme be extended or amended after March 2027.
The discussion began following reports in the European media that some EU countries are considering restricting access to extended temporary protection for Ukrainian men of conscription or mobilisation age. This does not refer to the immediate withdrawal of status from those already in the EU, but to the possible parameters of the future regime once the current period of temporary protection expires.
The current temporary protection for Ukrainians in the EU has been extended until 4 March 2027. This mechanism was first activated in March 2022 and allows Ukrainians to live, work, and access education, healthcare and social support in EU countries without going through the standard asylum procedure.
The European Commission has previously emphasised that the current rules on temporary protection apply to all Ukrainians eligible for this status, with no specific exception for men of conscription age. Any potential changes must be discussed by EU member states and will require a separate political and legal decision.
According to Eurostat, as of the end of March 2026, 4.33 million people from Ukraine were under temporary protection in EU countries.
Germany remained the largest host country – around 1.275 million people, or 29.4% of all recipients of temporary protection in the EU. Poland was in second place – 961,400 people, or 22.2%, and the Czech Republic in third – 379,800, or 8.8%.
The composition of Ukrainians under temporary protection remains predominantly women and children. According to Eurostat, adult women accounted for 43.3% of all beneficiaries of temporary protection, minors for 30.1%, and adult men for 26.6%.
In absolute terms, this means that approximately 1.87 million adult women, around 1.30 million children and approximately 1.15 million adult men were under temporary protection in the EU.
A rough estimate suggests there are between 0.9 and 1.1 million Ukrainian men of working age and potentially conscriptionable age under temporary protection in the EU. This is an indicative estimate, not official statistics on those liable for military service.
The discussion of possible restrictions is linked to two parallel processes. On the one hand, the EU is seeking a long-term model for the millions of Ukrainians who have been under temporary protection for over four years. On the other hand, Ukraine has an acute need for human resources for defence and economic recovery.
At the same time, any changes within the EU will be legally sensitive. Restricting access to protection on the basis of gender, age or conscription status could spark debates about discrimination, human rights, the national powers of states and the alignment of EU policy with Ukraine.
Thus, the current status of Ukrainians in the EU will remain in place until at least March 2027. The question of whether there will be new restrictions for men of conscription age after that date is still under discussion and has not yet been decided.
Ukrainian President Volodymyr Zelenskyy has signed two decrees enacting decisions by the National Security and Defense Council of Ukraine to align sanctions with those of the European Union, according to the president’s press service.
“The synchronization of EU sanctions under the 20th package covers 120 individuals and organizations and imposes economic sanctions targeting key sectors of the Russian economy. Some of them are already subject to Ukrainian sanctions. Today’s decision applies to an additional 16 Russian citizens and 31 companies from Russia, Belarus, the UAE, Kyrgyzstan, Kazakhstan, Uzbekistan, and the temporarily occupied territory of Ukraine,” the statement reads.
Among the individuals are heads of Russian strategic enterprises, state-funded institutions, units of the Russian army, and entities serving Russia in our temporarily occupied territories.
The list also includes Russian defense industry enterprises, manufacturers of electronic warfare equipment, software, and drone components, as well as companies involved in oil, gas, and gold extraction. In particular, restrictions have been imposed on the Russian manufacturer of aerospace products and drone components, LLC
“Atlant Aero,” as well as on the Russian manufacturer of communication systems and components for UAVs and missiles, LLC “Irz-Zvyazok.”
Sanctions have been imposed on companies from the UAE that sell machine tools and laboratory equipment, chemical products, and spare parts for commercial aircraft, as well as on an oil exporter in Belarus.
Ukraine has also imposed restrictive measures on three Russians: Prosecutor Lyudmila Balandina, who was involved in systematic repression and human rights violations against individuals who supported Ukraine or criticized the Russian government; Judge Dmitry Gordeev, also implicated in repression, who issued politically motivated rulings against opposition figures and human rights defenders; and Russian editor and propagandist Maria Sittel, who systematically disseminated disinformation.
Sanctions have also been imposed on 19 Iranian citizens, 7 Sudanese citizens, and 11 Iranian companies involved in Iran’s ballistic missile and drone programs.
“We continue to coordinate sanctions regimes with the EU and our partners. We expect further pressure on Russia and all those who help it sustain its aggression. We are already finalizing joint work on draft EU and partner-state sanctions decisions, including the 21st sanctions package,” noted Vladyslav Vlasyuk, the President’s Advisor and Representative on Sanctions Policy.
According to Serbian Economist, Montenegro is drafting new regulations for home producers of rakija and other spirits as part of its efforts to align its legislation with EU requirements. Even small producers who make the beverage solely for their own consumption will be required to register with the Customs Service and declare their distillation equipment.
The regulations are contained in a draft of the new law. The law is set to take effect after Montenegro joins the European Union.
According to the draft, an individual will be able to produce up to 50 liters of strong fruit-based alcoholic beverage per year per household without paying excise tax. However, such a beverage may only be used for personal consumption, family members, and guests. The sale of homemade rakija under this regime will be prohibited.
A producer planning to produce more than 50 liters per year or sell the beverage will be required to register as a small distillery and pay excise tax. For strong alcoholic beverages, the rate remains at 1,250 euros per hectoliter of pure alcohol. This corresponds to €12.50 per liter of pure alcohol, and for rakia with an alcohol content of about 50%, approximately €6.25 per liter of finished beverage.
The draft also provides for the status of a small distillery. Such a distillery will be able to produce up to 1,500 liters of pure alcohol per year, which is equivalent to approximately 3,000 liters of 50% rakia. A preferential rate—50% of the standard excise tax on spirits—will apply to such producers.
The new rules significantly tighten control over home production. A small producer will be required to submit an application to the local Customs Service office at their place of residence no later than eight days before production begins. The application must specify the capacity of the still and the production location.
If a producer exceeds the 50-liter limit without notifying customs or begins selling the beverage without registration and excise accounting, the entire batch produced will be considered illegal. In this case, the customs authority may assess excise tax on the entire volume, not just the excess over the limit.
Several types of penalties are provided for violations. First, monetary fines for failure to register, failure to submit a notification, exceeding the permitted volume, and selling without excise clearance. The published materials do not provide an exact scale of fines in euros, but indicate that the new law specifically establishes such penalties.
Second, the violator may be charged unpaid excise tax on the entire volume of alcohol produced. Interest will also be charged on the amount of unpaid excise tax.
Third, the Customs Service will be able to seize illegally produced alcohol and decide whether to sell or destroy it. This measure will apply in cases where production is deemed illegal due to exceeding the limit, failure to report, or selling without registration.
Fourth, customs will be able to seal or confiscate equipment used for the production of strong alcoholic beverages. This measure applies if the distillation apparatus is unregistered or is used to produce more than the permitted volume and to sell without excise accounting.
For Montenegro, this issue has not only fiscal but also social significance. Home production of rakija is a widespread tradition in the country’s rural areas and throughout the Balkans. Therefore, the new rules may cause discontent among some households that are accustomed to producing the beverage for personal consumption without a complicated registration process.
The authorities, in turn, aim to make the market more transparent, curb the illegal sale of strong alcohol, and bring the excise system into line with European standards.
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