REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT ANDTHE COUNCIL Annual Report 2025: Twentieth annual report on the implementation of the EUassistance under Council Regulation (EC) No 389/2006 of 27 February 2006 establishingan instrument of financial support for encouraging the economic development of the REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT ANDTHE COUNCIL Annual Report 2025: Twentieth annual report on the implementation of the EUassistance under CouncilRegulation (EC) No389/2006 of 27February 2006 establishingan instrument of financial support for encouraging the economic development of the 1. Council Regulation (EC) No389/20061(theAidRegulation)is the basis forprovidingassistance to the Turkish Cypriot communityand requires annual reporting to theEuropean Parliamentand theCouncil.Theaid programmefor the Turkish Cypriotcommunity aims to facilitate the reunification of Cyprus by encouraging the economicdevelopment ofthis community, with a particular emphasis on:(i)the economic 2.PROGRAMMING OF THE ASSISTANCE Between 2006 and the end of2025,EUR760670469.93 was programmed foroperations under the Aid Regulation. The amount committed inSeptember2025forthe2025 annual action programme was EUR33721307.002.The 2021-2027multiannual financial framework, with a total budget of EUR240million,hasprovidedmultiannual funding for the programme.The aid programme remainsexceptionaland transitionalinnature.Itaimstoprepareforandfacilitatethe full In the event of a comprehensive settlement of the Cyprus problem,the Council will,on the basis ofa proposal from the Commission, decide unanimously on the necessaryadaptations tothe Aid Regulation.In addition,Council Regulation(EU, Euratom) 3.IMPLEMENTATION MECHANISMS Theaidprogramme is implemented in the areas of the Republic of Cyprus in whichtheGovernmentof the Republic of Cyprus does not exercise effective control(the ‘non-government-controlled areas’)and where the application of the acquis istemporarily suspended pursuant to ProtocolNo10 of theActof Accession. Assistance The Commissioncontinues toimplementthe aid programmein aunique political, legaland diplomatic context.The granting of assistanceunder the Aid Regulationdoesnotimply recognition of any authority in the areasin whichtheGovernmentof theRepublic of Cyprusdoes not exercise effective control.Ad hoc arrangements arerequiredto implement the programme,while respecting the principles of sound In the event of reunification and a comprehensive settlement entering into force, thesuspension of the application of the acquis pursuant to ProtocolNo10 will be lifted.For this reason, and to facilitate the implementation of the projects financed throughthe aid programme, the Turkish Cypriot community must progressively align with the TheCommission implements theselectedprojectsthrough the EU Programme SupportOfficein the non-government-controlled areas in Nicosia.The CommissionRepresentationin Cyprus also hosts meetings, seminars and press conferences andcommunicates with theCypriot public throughout the island, includingon topicsrelated totheaid programme.In addition, the EUInfoPoint, funded under theaid 4.IMPLEMENTATION DURING THE REPORTING PERIOD 4.1.General overview The Commission continues to implement the Aid Regulation with the overall aim ofsupporting reunification. During the reportingperiod, theCommissioncontinuedto provide supporttokeyinitiatives. These include:(i)theEU scholarshipsprogrammefor the Turkish Cypriotcommunity;(ii)the peace education programmefor high school studentswiththeUnited World Colleges;(iii)supporting confidence-building measures under theauspices of the respective leaders of the two communities,such asthe Committee on Supportingthesocio-economic development of the communityremainsan essentialfeatureof the programme. Tailored assistance was provided to upgrade standards in key economic sectorsthroughprojectstargetingtheprivate sectorandfood businesses.Significanteffortswere madeto improve animal health and food safety in the Turkish Cypriot The Commission continuedto providesupporttotheTurkish Cypriot communitytoreachtheEUstandardsset by the measures adopted in 2021 registering‘Χαλλούμι’(‘Halloumi’/‘Hellim’)as a protected designation of origin (PDO) and setting out the conditions for itstradeacross the Green Line.The Commissionalsocontinued toconvene theinformal working group on‘Halloumi’/‘Hellim’,bringing together SignificantEU-funded infrastructureprojectswerelaunchedin2025. They included:(i)extendingthe Pedieos/Kanlıdere linear park into the northern part of Cyprus;(ii)expandingthe Agios Dometios/Metehan crossing point;(iii)installingphotovoltaicpanels in the Mia Milia/Haspolat wastewater treatment plant;(iv)replacingsewerage There are still considerable gaps inthebeneficiaries’capacity to effectively implementtheacquisfollowinga comprehensive settlement.However, theTurkish Cypriotcommunitycontinued to make progressinacquisalignmentinseveralareas,such