1.The Framework Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of Ukraine on Official Credit Support for the Development of the Capabilities of the Ukrainian Navy (the UK-Ukraine Credit Support Agreement) was laid on 22 November 2021, and the scrutiny period is scheduled to end on 11 January 2022. It was considered by the Committee on 8 December 2021.
2.The purpose of the Agreement is to bolster Ukraine’s naval capabilities by providing the framework for a £1.7bn loans package to enable Ukraine to purchase two British minesweeper vessels and retrofit UK weapons systems to existing vessels, and for specified UK contractors to work with Ukraine to build eight missile ships and a frigate. The package also includes consultancy and technical support for the building of naval infrastructure, including the delivery of equipment. The Agreement includes deadlines for granting credits, with each contract having to be allocated no later than 31 December 2024.
3.Although the Agreement provides a framework to allow contracts to be placed and be accompanied by UK Export Finance support, it does not set out the specific contracting or financing arrangements at this stage, which will need to be negotiated separately.
4.A bilateral agreement was necessary because standard Ukrainian procurement rules would not have allowed Ukraine to make a single source contract award, and would not have allowed a certain percentage of the goods and services to originate from the UK, which is itself a condition for UK Export Finance. The Explanatory Memorandum (EM) published alongside the Agreement explains that Ukraine has signed similar agreements with other countries (although it does not list them).
5.The Agreement contains commitments from both Parties to fight against corruption in international commercial transactions, and the UK can refuse payment to Ukraine where commitments are breached:
“In the event of failure to comply with the undertakings set out in this Article, the UK Party reserves the right to refuse to allocate any relevant Contract and/or to suspend disbursements of the Credit to the Borrower in relation to the relevant Contract.”
6.The Agreement will enter into force on the day that both Parties have confirmed that their relevant domestic procedures have been completed. The EM explains that no domestic implementing legislation is required to bring it into force.
7.In response to Russia’s annexation of Crimea and the military conflict in the Donetsk and Luhansk regions of eastern Ukraine (the Donbas) in 2014, the UK has provided substantial bilateral military assistance and training to Ukraine. The original training package was extended in 2018 to include the navy—with Royal Navy and Royal Marines personnel deployed to deliver training to the Ukrainian Navy. Operation Orbital, the name of the UK’s training operation in Ukraine, has trained around 22,000 Ukrainian troops to date. Unlike the approach followed by the United States, the UK Government initially ruled out providing lethal arms to Ukraine. The then Foreign Secretary, Philip Hammond, however, set out the UK’s right to review its position:
“It is a national decision for each country in the NATO alliance to decide whether to supply lethal aid to Ukraine. The UK is not planning to do so, but we reserve the right to keep this position under review.”
8.The provision of financing to purchase weapons systems and build war ships under the Credit Support Agreement therefore represents a step change from the UK’s original approach of providing non-lethal support—a change that has its origins a Memorandum of Intent signed in October 2020.
9.In October 2020, Ukrainian Minister of Defence Andriy Taran and UK Defence Secretary Ben Wallace signed a Memorandum of Intent on military and defence construction cooperation, to be largely funded through UK Export Finance (UKEF). This was followed by a Memorandum of Implementation to support the enhancement of Ukrainian naval capabilities in June 2021.
10.In its Integrated Review of Security, Defence, Development and Foreign Policy published in March 2021, the UK Government made clear that it considers Russia to be “the most acute threat to our security”, and explicitly set out military support for Ukraine as one of its objectives:
“The UK respects the people, culture and history of Russia. However, until relations with its government improve, we will actively deter and defend against the full spectrum of threats emanating from Russia … We will also support others in the Eastern European neighbourhood and beyond to build their resilience to state threats. This includes Ukraine, where we will continue to build the capacity of its armed forces.”
11.On 29 November, Defence Minister Baroness Goldie summarised the UK’s position in answering an oral question in the House:
“…we have signed a number of agreements with the Government of Ukraine to work together and with industry to boost Ukraine’s defence capabilities. This is part of the UK’s ongoing commitment to the Ukrainian defence capabilities and the support announced during President Zelensky’s visit to the UK in October. The UK maintains close dialogue with key allies, including Germany, France and the US, regarding Ukrainian military development. These agreements reflect and underline the UK’s commitment to Ukraine’s territorial integrity and sovereignty.”
12.Since late October, concerns have been rising about the risk of a significant Russian military incursion into Ukraine, following reports of a build-up of Russian troops and military equipment on the border shared by the two countries. Although he did not supply any evidence, on 26 November, Ukraine’s President Zelensky claimed that his country’s intelligence services had obtained recordings of a Russian-backed coup plot against his government.
13.Tensions have continued and, at the time of publication of this report, there was little sign of a de-escalation. On 30 November a NATO meeting of Foreign Affairs Ministers was held to discuss Russian motives, and NATO issued a warning to Russia that it would pay “a high price” if it were to use force against Ukraine. President Putin, in turn, responded that Russia would be forced to act if NATO missiles were deployed in Ukraine and asked for guarantees that NATO would stop its eastward expansion, and not deploy weapons systems in any countries with which Russia shares a border. NATO’s view is that it is up to individual countries, including Ukraine, to choose its alliances, and that deployments of missile shields in Poland and Romania are aimed at countering states outside the Euro-Atlantic area, and are not intended as a threat to Russia.
14.The UK-Ukraine Credit Support Agreement represents an important sign of support for Ukraine and its territorial integrity. The provision of credit to purchase British weapons systems and jointly build warships marks an important shift in UK policy. Given the present heightened risks of conflict, this Agreement should be considered in the context of the UK and NATO’s commitments to Ukraine. The Government should therefore use the occasion of a parliamentary debate to set out its current approach with its allies to countering any threats to Ukraine’s territory and sovereignty, in line with the Government’s stated policy.
15.We report the UK-Ukraine Credit Support Agreement to the special attention of the House on the grounds that it is politically important, and gives rise to issues of public policy that the House may wish to debate prior to ratification.
16.We make our report on this Agreement for debate.
1 Framework Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of Ukraine on Official Credit Support for the Development of the Capabilities of the Ukrainian Navy, CP 553, November 2021: [accessed 9 December 2021]
2 Article 9. Deadlines may only be extended in exceptional circumstances and after mutual agreement through an exchange of letters.
3 Department for International Trade, Explanatory Memorandum on the “Framework Agreement” between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of Ukraine on Official Credit Support for the Development of the Capabilities of the Ukrainian Navy, November 2021: [accessed 9 December 2021]
4 Article 8
5 House of Commons Library, Military Assistance to Ukraine, Briefing Paper, , 29 April 2021
6 HL Deb, 29 November 2021,
7 HC Deb, 10 February 2015,
8 Naval Technology, ‘Ukraine to boost naval capabilities with UK loan’, 9 October 2020: [accessed 9 December 2021]
9 Ministry of Defence, Press Release: ‘UK signs agreement to support enhancement of Ukrainian naval capabilities’, 23 June 2021: . The June memorandum was signed by both Parties and UK defence industry representatives on HMS Defender, which later that day was involved in a confrontation with the Russian military while on its way to Georgia sailing near the Crimean Peninsula. See: BBC News ‘HMS Defender: Russian jets and ships shadow British warship’, 23 June 2021: [accessed 2 December 2021]
10 HM Government, Global Britain in a competitive age The Integrated Review of Security, Defence, Development and Foreign Policy, CP 403, March 2021, p 61: [accessed 9 December 2021]
11 HL Deb, 29 November 2021,
12 See, for example: ‘Russian troop movements near Ukraine border prompt concern in U.S., Europe’, The Washington Post, 30 October 2021: [accessed 9 December 2021] ‘Satellite images show new Russian military buildup near Ukraine’, Politico, 1 November 2021: [accessed 9 December 2021]
13 ‘Ukraine has uncovered Russia-backed coup plot, says president’, Financial Times 26 November 2021: [accessed 9 December 2021]
14 NATO, Press conference by NATO Secretary General Jens Stoltenberg at the Meeting of NATO Ministers of Foreign Affairs, Riga, 30 November 2021: [accessed 9 December 2021]
15 See: NATO, ‘NATO-Russia relations: the facts’, 22 October 2021: ; [accessed 9 December 2021]