OECD Development Co‑operation Peer Reviews: European Union 2025

Annex B. Progress against OECD legal instruments under the responsibility of the DAC

Recommendations adopted by the Development Assistance Committee (DAC)

DAC Recommendation on the Terms and Conditions of Aid

The 1978 DAC Recommendation on Terms and Conditions of Aid [OECD/LEGAL/5006] commits DAC Members to ensure a minimum concessionality for their ODA commitments, with special provisions for least developed countries (LDCs). Within the EU institutions’ ODA portfolio in 2023, 43.9% was provided in the form of grants and 56.1% in the form of non-grants.

The European Union has not complied with the DAC Recommendation on Terms and Conditions of Aid since 2020. In 2023, the grant element of ODA commitments was 65.8% (below the 86% norm, and below 79.1% in 2022). This is mainly driven by large loans to Ukraine.

The European Union is in line with special provisions for LDCs. In 2023, the grant element of bilateral ODA commitments to LDCs was 97.9% (above the 90% norm and slightly above 97.7% in 2022).

According to the European Union, the decrease of the grant element reported in the table below reflects the increase in interest rates in 2023, which has decreased the level of concessionality of the EIB and MFA loans.

DAC Recommendation on Untying Official Development Assistance

Overall, the European Union has a strong track record on untying, although in practice most procurement contracts are awarded to European companies. The European Union unties entirely its ODA to the countries covered by the DAC Recommendation on Untying ODA [OECD/LEGAL/5015].1 As regards to overall ODA (all countries, all sectors), the European Union untied 95% in 2023. The EU has favoured financing modalities that are, by their nature, both legally and practically untied – such as budget support and indirect management – where procurement authority is delegated and no longer exercised by the EU itself. In the case of untied ODA projects that involve contract awards, around 50% are awarded to European entities (EU companies and civil society organisations).

DAC Recommendation on the Humanitarian-Development-Peace (HDP) Nexus

The European Union has a strong track record in operationalising the Humanitarian-Development-Peace Nexus approach in contexts facing high or extreme fragility, starting in 2017 with the adoption of Council Conclusions on the Humanitarian-Development nexus and the designation of six pilot countries under DG DEVCO/INTPA, as well as several countries under DG NEAR (albeit without the “nexus” label). This was followed by the 2018 Council Conclusions on the EU integrated approach to conflict and crises. A particular innovation of this approach at the time was the explicit inclusion of a conflict prevention and peacebuilding component that requires humanitarian, development and peace actors to work together to address the root causes of fragility, vulnerability and conflict and to build resilience. The European Union started elaborating the peace pillar more formally from 2018 onwards through dedicated guidance and adhered to the DAC Recommendation [OECD/LEGAL/5019] in 2019 on its adoption. The NDICI Regulation introduced in 2021 requires a conflict analysis screening to inform programming in crisis-affected regions or contexts with high and extreme fragility. The European Commission together with the EEAS have since issued a suite of guidance notes to support the implementation of the HDP nexus in the EU’s external actions shared with EU Delegations and Member State embassies in a Team Europe approach. At the country level, a number of innovative approaches to programming across the HDP nexus have been developed to support more effective, coherent and co‑ordinated Team Europe approaches, such as in Ethiopia, Myanmar or Pakistan.

There is scope to further strengthen the HDP nexus approach in EU external action. In contexts with high or extreme fragility, the conflict analysis screening and principles of conflict sensitivity and do no harm should be a regular and iterative process that actively informs operations throughout the programme cycle, not just at the outset. Beyond situations of high or extreme fragility, the HDP nexus in particular can support peace-positive and conflict prevention approaches within the pivot to the new development paradigm, including in more stable environments.

DAC Recommendation on Ending Sexual Exploitation, Abuse and Harassment in Development Co-operation and Humanitarian Assistance

The European Commission demonstrates a strong institutional commitment to the DAC Recommendation on Ending Sexual Exploitation, Abuse and Harassment in Development Co-operation and Humanitarian Assistance [OECD/LEGAL/5020], particularly in terms of policy development, partner co-ordination and internal procedures.

The Commission has a zero-tolerance approach for inaction against Sexual Exploitation, Abuse and Harassment (SEAH). It has adopted clear instructions for reporting SEAH allegations, emphasising a zero-tolerance approach. DG INTPA and DG ECHO have developed policies, strategies and manuals to clarify responsibilities and procedures, ensuring alignment with the DAC Recommendation. Measures prioritise confidentiality, informed consent and victim/survivor support, in alignment with the core principles of the Recommendation. DG ECHO requires partners to provide aggregated reports on support mechanisms and ensures personal data protection. Reporting processes and tools have been strengthened, including legal frameworks and contract management adaptations to address SEAH allegations effectively. The Commission has also developed online courses, awareness sessions and tailored training programmes to raise awareness about preventing SEAH and to encourage a culture of reporting. Internally, the Chief Confidential Counsellor and the PSEAH Technical Co-ordination (PTCG) group, which involves staff from DG ECHO, DG ENEST and FPI, support the co-ordination of SEAH prevention and response.

DG ECHO conducts annual SEAH risk assessments in humanitarian operations, complemented by in-depth analyses in high-risk countries to inform targeted actions. These assessments guide programming priorities and are used to tailor monitoring and support to implementing partners, especially local actors who may lack robust safeguarding systems. Risk mitigation is also embedded in grant management processes, including partner certification, proposal evaluation and field audits. In civil protection, efforts are under way to establish a comprehensive SEAH control framework. DG ECHO also uses annual partner reports to inform funding priorities and support targeted actions – which is a positive practice. DG ECHO and DG INTPA use annual partner reporting, risk overviews (e.g. SEARO), and compliance audits to assess the effectiveness of SEAH prevention and response systems. These insights inform funding decisions, policy updates and capacity-building efforts. DG ECHO’s compliance team synthesises findings for senior management and co-ordinates follow-up actions, including support to partners and potential contractual measures. Lessons are shared across internal and external co‑ordination platforms to promote systemic learning and harmonisation of safeguarding standards.

Internationally, the Commission supports co-ordination, including through its effort to adhere to the Common Approach to Protection from SEAH (CAPSEAH), its participation in the OECD DAC reference group on ending SEAH, and alignment with CHS Alliance reporting schemes to streamline processes and reduce partner burdens. Standardised reporting forms and strengthened co-ordination facilitate monitoring and evaluation of SEAH cases.

DAC Recommendation on Enabling Civil Society in Development Co-operation and Humanitarian Assistance

The European Union has a good track record on implementing the DAC Recommendation on Enabling Civil Society in Development Co-operation and Humanitarian Assistance [OECD/LEGAL/5021]. It has made progress in protecting and promoting civic space including with the launch of the EU System for an Enabling Environment for Civil Society (EU SEE) in 2024. It supports civil society organisations (CSOs) in monitoring and preventing the deterioration of their operating environment. In addition, the Team Europe Democracy initiative supports a co-ordinated approach between the European Union and its Members on democracy support, including protecting and promoting civic space. Additionally, the European Union collaborates with international bodies, such as the Community of Democracies Working Group and the Fundamental Rights Agency, to protect civic space. At the country level, the European Union provides technical assistance for legal analyses of repressive laws and organises civil society forums alongside high-level meetings. However, geopolitical developments, including the US withdrawal from championing civil society and multipolar competitiveness, make it challenging to prioritise policy dialogue with partner governments.

The European Union has expanded its Civil Society Roadmaps to 90 countries, ensuring an inclusive approach and local ownership by involving CSOs in the development process. Structured dialogues through the Policy Forum on Development (PFD) foster collaboration and co-creation between CSOs, EU institutions and partner country governments. However, strategic engagement is somewhat challenged by limited participation of civil society in the steering of Global Gateway and Team Europe Initiatives. Under the thematic programme on civil society, the European Union has allocated EUR 428.2 million for civil society support in partner countries for 2025-2027 (and EUR 773.1 million for 2021-2024), including in its priorities, climate action (adaptation and mitigation), women and youth organisations. Nonetheless, with the adoption of NDICI-Global Europe, CSOs have lost dedicated access to EU funding and local CSOs struggle to access funding because of large calls for proposals. In practice, direct funding to local civil society has been stable over the period under review between 1‑2% of ODA. To overcome this challenge, the European Union is expanding the use of Financial Support to Third Parties (FSTP) to provide flexible funding to grassroots and marginalised groups.

The EU SEE programme includes strong capacity-building elements, such as peer-to-peer learning and co-creation processes, to enhance CSO effectiveness. Through the Global Gateway CSO and Local Authorities Platform, the European Union is mapping CSO constituencies to improve collaboration at regional, national and policy sector levels. However, recent reductions in donor funding for civil society have led to fewer resources and increased competition among CSOs for EU funding.

Regular surveys of EU Delegations have enabled the European Union to monitor progress in its dialogue and consultation processes with CSOs. While most provisions of the Recommendation are well supported by existing guidance, additional tools and guidance are needed to counter mis- and disinformation, harassment and anti-democratic narratives targeting civil society.

DAC Recommendation on Gender Equality and the Empowerment of All Women and Girls in Development Co‑operation and Humanitarian Assistance

The European Union is implementing the DAC Recommendation on Gender Equality and the Empowerment of All Women and Girls in Development Co‑operation and Humanitarian Assistance [OECD/LEGAL/5022]. The EU Gender Action Plan III (GAP III) is the central policy and operational framework for advancing gender equality and empowering women and girls, endorsed by 24 Members in 2020. It follows a three-pronged approach: gender mainstreaming, targeted actions and legislation. GAP III sets ambitious targets, including making 85% of new external actions gender-responsive, with 5% having gender equality as the principal objective also applying to development finance. In 2022-2023, however, only 59% of the EU’s bilateral allocable ODA had gender equality objectives – above the DAC average of 46%.

The European Union allocated EUR 48 million to address gender-based violence (GBV) in emergencies and continues to promote the Women, Peace and Security (WPS) agenda through national action plans and peacebuilding efforts. The EU also continues supporting the Spotlight Initiative to end violence against women and girls.

At the multilateral level, the European Union remains active in UN forums and co-led efforts in the Generation Equality Forum, in particular in the action coalition on Technology and Innovation for Gender Equality and GBV. Country-level implementation plans foster a Team Europe approach, encouraging broad stakeholder consultations. In 2023, gender equality featured in dialogues with around 100 partner countries, and was the sole focus in 34 of them. Gender equality is a key element of EU engagement with candidate and potential candidate countries, including through the IPA envelope. The EU also integrates gender into trade, climate and digital policies. For instance, gender analysis is systematically included in the evaluations of trade agreements and legally binding commitments on gender equality are embedded in recent investment facilitation agreement with countries such as Angola and trade agreements with Chile, Kenya and New Zealand. The European Union also collaborates with the International Labour Organization on the “Trade for Decent Work” project to improve working conditions for women. The European Union also supports women’s leadership in climate governance and negotiations and funds gender-responsive climate initiatives. In the digital domain, the European Union is working to ensure that its forthcoming AI Act includes safeguards against gender discrimination in artificial intelligence applications.

While not endorsed by all EU Members, the GAP III emphasises intersectionality and transformative approaches. Programmes like Women and Youth Democratic Engagement (WYDE) and regional partnerships (e.g. ASEAN) promote inclusive governance. In 2025, ProtectDefenders.eu assisted over 5 450 Women Human Rights Defenders (WHRDs).

Gender analysis underpins programme design, with 85% of EU Delegations having conducted at least one gender sector analysis but only 48% of them have gender sector analyses for all their priority sectors. A new conflict-sensitive gender analysis methodology has been introduced in 2024. However, stronger focus on qualitative impact and implementation is needed. Flexibility and risk monitoring are key, particularly in settings with high levels of fragility.

Women’s rights organisations (WROs) are strategic partners. Funding to these organisations increased from EUR 46.6 million (2022) to EUR 121 million (2023) via subgrants and global programmes like ACT and WYDE. Innovative financing tools such as EFSD+, IYBA and the ACP Gender Facility support women’s entrepreneurship and financial inclusion. The European Union also works with development finance institutions to integrate gender equality into investment strategies and reach its financial target of 85%.

Monitoring and reporting are integral to corporate systems. The European Union uses gender-specific and sex-disaggregated indicators, but with only 53% of interventions reporting sufficient data by end-2024. The MORE framework for Team Europe Initiatives (TEIs) includes GAP III indicators. The European Union also supports implementing partners with training and technical assistance for improved monitoring.

Internally, the EU aims to foster a gender-responsive organisational culture. Gender-responsive leadership (GRL) training is provided to managers, and gender focal points are in 99% of Delegations.

Recommendations adopted by the Council under the DAC’s responsibility (joint with other OECD committees)

Recommendation on Policy Coherence for Sustainable Development

The European Union is a leader in promoting policy coherence for sustainable development and supports coherence within the EU legal framework, across its policy agendas and among Member States, in line with the Recommendation on Policy Coherence for Sustainable Development [OECD/LEGAL/0381]. There is strong legal foundation for policy coherence at EU level. Notably, Article 4(4) of the Treaty on the Functioning of the European Union (TFEU) and Article 208 TFEU grant the EU competence in development co‑operation, establish poverty reduction as a primary objective, require compliance with global commitments and that EU and Member States policies complement each other and consider their impact on developing countries. Article 21 of the Treaty on the European Union (TEU) further integrates development policy into broader external action. More specifically, NDICI-Global Europe regulation underscores consistency, coherence and complementarity, emphasising Policy Coherence for Development and requiring the European Union to consider the impact of all policies on sustainable development and promote synergies (Art. 5(1) of Regulation (EU) 2021/947). Moreover, the EU legal framework supports coherence across Member States by harmonising national rules in areas where a common approach is justified, in line with the principle of subsidiarity.

The 2021 Better Regulation initiative requires impact assessments to consider the impact of EU regulation on developing countries. These include:

• Regulatory impact assessments (RIAs): all major EU policy proposals undergo RIAs, which consider social, economic and environmental effects, including on developing countries. Trade agreements are a key example.

• Sustainability impact assessments (SIAs): SIAs examine the long-term impacts of EU policies (e.g. trade, climate, agriculture) on partner countries and include consultations with stakeholders.

• Fitness checks and evaluations of existing policies, programmes and laws to assess their performance.

Inter-service consultations help foster dialogue across DGs, with DG INTPA, ENEST and MENA advocating for the impact of EU policies on partner countries to be properly factored in. In addition to formal inter-service consultations on draft proposals, inter-service steering groups are used to consult on draft proposals. During the formal consultation process consulted DGs can issue a positive opinion, a positive opinion with comments or a negative opinion. A negative opinion triggers an escalation of the “disagreement” to a higher level (Director, Director-General, then Cabinet of Commissioner). The lead DG is not obliged to take on board suggested changes or perspectives when another DG issues a positive opinion with comments. The lead DG determines which DGs are formally consulted. While DGs not included in the initial list can request to be formally added, it is the responsibility of the inter-institutional unit in other DGs to proactively monitor relevant initiatives of other DGs, which can be challenging.   The European Union also promotes strong stakeholder engagement when designing and evaluating initiatives through public calls for evidence and consultations.

As identified in EUs self-assessment, applying PCSD across all areas remains complex, especially when internal and external priorities diverge. Development perspectives can be further integrated across all sectors, especially in sensitive areas like migration or security. EU impact assessments primarily focus on EU-level impacts: more attention could be given to impact on developing countries. Institutional fragmentation can also hinder coherence during inter-institutional negotiations.

Recommendation for Development Co‑operation Actors on Managing the Risk of Corruption

The European Union has built a robust ethical framework centred on the Practical Guide to Staff Ethics and Conduct. It addresses risks of corruption, fraud, financial misconduct, conflicts of interest, harassment and more, complemented by codes and operational tools. Audit and Control Units co‑ordinate auditing and internal investigations, with cases handled by the European Anti-Fraud Office (OLAF) or the Investigation and Disciplinary Office of the Commission (IDOC), depending on the nature and severity of the alleged fraud or corrupt practices.

To bolster internal controls and manage corruption risks, the European Union prioritises training and awareness, particularly for finance and contract staff in Delegations. For example, in 2024, it developed – with the European External Action Service (EEAS) – a joint ethics and anti-fraud training plan to ensure consistent, specialised training for targeted groups in Representations, Delegations and Missions. Measures were also introduced to mitigate risks associated with long-standing local agents. However, limited staff attendance to trainings due to heavy workloads, operational pressures and competing priorities, undermine training impact and the potential of preventive measures.

Corruption is one of five dimensions covered by the European Union’s risk framework. Under the 2020 Fraud Risk Assessment, corruption risks were further grouped into five areas: external co‑operation context; contract award procedures; financial risks in project implementation; risks from false representations; and control environment risks. In 2025, DG INTPA launched a new Fraud Risk Assessment to adapt to evolving operations, financial instruments, policies and emerging corruption risks. This review will shape the 2025-28 Anti-Fraud Strategy and address persistent challenges to effective risk-based management, such as weak detection capacity, slow institutional response and inadequate data sharing.

To help staff integrate and mainstream anti-corruption into external actions, the European Union issued guidance in 2024. The document offers tools to assess and mitigate corruption risks in different contexts and modalities, as well as across sectors. It focuses on five sectors of the Global Gateway: transport, education, health, energy and digital transformation. It further addresses the need to understand the enablers and drivers of corruption to design appropriate direct or indirect anti-corruption interventions and avoid unintentionally fuelling corruption dynamics. It is intended for EU staff and implementing partners.

The European Union works across directorates to address corruption and integrity risks in partner countries, as highlighted in the OECD Monitoring Report of the Recommendation [OECD/LEGAL/0431], as well as with local, regional and international partners to deliver technical assistance as relevant. For instance, directorates working on taxation, customs, financial stability and capital markets collaborate on support related to international tax governance, anti-money laundering and to counter terrorist financing. A key example is the EU Global Facility on Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT), which offers tailored support to partner countries based on the deficiencies in their AML/CFT regimes.

Recommendation on Environmental Assessment of Development Assistance Projects and Programmes

The European Union has made progress in implementing the OECD Recommendation on Environmental Assessment of Development Assistance Projects and Programmes [OECD/LEGAL/0458], integrating environmental considerations more systematically across its external action. Through instruments such as NDICI-Global Europe and the Global Gateway, the European Union has reinforced its commitment to ensuring that all development co-operation activities undergo rigorous environmental and climate screening. This includes the systematic use of Strategic Environmental Assessments (SEA) and Environmental Impact Assessments (EIA), in line with international good practice. These assessments are embedded early in the project cycle, helping identify risks, promote environmental sustainability and support “do no harm” principles.

In recent years, the European Union has updated its operational guidance to align with the evolving global agenda, notably through the launch of the Greening EU Co-operation Toolbox in 2024. This online resource replaces the 2016 guidelines and reflects the OECD Recommendation’s emphasis on upstream integration of environmental considerations, transparency and stakeholder participation. Furthermore, dedicated technical support is provided through the Greening Facility, extended until 2029 and capacity-building activities such as training and webinars are regularly conducted for EU staff and partners.

OECD DAC Declarations

OECD DAC Declaration on a new approach to align development co‑operation with the goals of the Paris Agreement on Climate Change

The European Union has taken steps to align its development co-operation with the goals of the Paris Agreement, in line with the OECD DAC Declaration [OECD/LEGAL/0466]. The European Green Deal reaffirmed the European Union’s ambitions on climate and the environment with a growth strategy that aims, among other things, to stop net emissions of greenhouse gases by 2050. In the NDICI-Global Europe Regulation (EU) 2021/947, the European Union commits to the achievement of an overall target of 30% of the EU budget expenditure supporting climate objectives. Furthermore, the NDICI-GE Regulation (EU) 2021/947 provides that, in view of contributing to halting and reversing the decline of biodiversity, the Instrument should contribute to the ambition of providing 7.5% of annual spending under the MFF to biodiversity objectives in 2024 and 10% to biodiversity objectives in 2026 and 2027, while considering the existing overlaps between climate and biodiversity goals. The EU Instrument for Pre-Accession 3 (IPA3) programming framework promotes the enhanced mainstreaming of climate change and environment actions. The crosscutting nature of environment and climate change is also reflected in the Green Agenda for the Western Balkans, especially in relation to key sectors of the Green Deal, such as energy, mobility, circular economy, pollution, food systems and biodiversity. Within the 360-approach to the Global Gateway, the green and clean principle aims at climate neutrality and the promotion of a transition to a cleaner and more circular global economy, as well as doing no harm. Yet, support to adaptation, losses and damages, as well as biodiversity, might be less suitable for the Global Gateway.

EU development co-operation now systematically considers low-emission, climate-resilient development pathways, aiming to both mitigate greenhouse gas emissions and strengthen partner countries’ climate adaptation capacities. The EU Greening toolbox provides mainstreaming guidelines for integrating the environment and climate change into EU international co-operation and development. Climate change risk screening and resilience measures are incorporated into programme design, while dedicated support for climate finance, renewable energy and nature-based solutions is increasing. Key instruments such as the EFSD+ guarantees and blended finance mechanisms are also being steered towards climate-smart infrastructure and clean energy. Furthermore, the European Union supports partner countries in updating and implementing their Nationally Determined Contributions (NDCs) and Long-Term Strategies (LTSs), in coherence with the Paris Agreement goals. Capacity development for EU Delegations and partners on climate mainstreaming has also been scaled up.

In 2022-2023, the EU institutions committed 35% of their total bilateral allocable ODA (USD 8.1 billion) in support of the environment and the Rio Conventions, up from 26.7% in 2020-2021. The DAC average was 39% in 2022-2023. In addition, 31% of total bilateral allocable ODA (USD 7.2 billion) focused on climate change overall, up from 23.2% in 2020-2021 (the DAC average was 34.8%). The EU institutions had a similar focus on mitigation (24.8%) and adaptation (24%) in 2022-2023. Seven per cent of bilateral allocable ODA focused on mitigation only, 6% on adaptation only and 17.6% on both mitigation and adaptation. Nine per cent of screened bilateral allocable ODA (USD 2 billion) focused on biodiversity overall, up from 6.9% in 2020-2021 (the DAC average was 7.6%).

Note

← 1.  Countries covered by the recommendation are least developed countries (LDCs), heavily indebted poor countries (HIPCs), other low-income countries and IDA-only countries and territories. The Recommendation only applies to specific sectors, excluding scholarships and free-standing technical co‑operation, among others.