Contingent Liability Notification: Ukraine Guarantee

Monday 6th June 2022 Written Statements

[The Minister for Europe and North America (James Cleverly)]

Today, I have laid a departmental minute which describes a liability the Foreign, Commonwealth and Development Office is undertaking to support the economic stability of Ukraine after the Russian invasion in March 2022.

It is normal practice, when a Government Department proposes to undertake a contingent liability in excess of £300,000 for which there is no specific statutory authority, for the Minister concerned to present a departmental minute to Parliament giving particulars of the liability created and explaining the circumstances; and to refrain from incurring the liability until 14 parliamentary sitting days after the issue of the statement, except in cases of special urgency.

The FCDO will guarantee a further $500 million or euro equivalent—approximately €464 million, or £396 million at current exchange rates—of financing by the World Bank to the Government of Ukraine. It will enable $500 million of additional World Bank financing to the Government of Ukraine.

The UK announced an intention to guarantee a further $500 million of financing from the World Bank to the Government of Ukraine on April 9 2022. If, during the period of 14 parliamentary sitting days beginning on the date on which this minute is laid before Parliament, a Member signifies an objection by giving notice of a parliamentary question or by otherwise raising the matter in Parliament, final approval to proceed with incurring the liability will be withheld pending an examination of the objection.

The exact length of the liability is dependent on the agreed loan by the World Bank but is expected to last up to 25 years. FCDO would pay official development assistance only if a default occurred as agreed with the World Bank. The departmental minute sets this out in detail.

HM Treasury has approved the proposal in principle and the Chair of the Public Accounts Committee has been notified.

I am placing today a copy of the departmental minute in the Library of the House.

[HCWS74]