After years of accepting the donation of foreign weapons and ammunition, the Ukraine government on Wednesday announced a “transparent” wartime arms export framework of its own to raise defense funds as Russia’s invasion enters its fifth year.
The mechanism, Ukrainian government officials detailed, aim to “attract international investment” while maintaining the supply of the nation’s army as the priority. The framework also aims to secure long-term growth goals for the nation’s weapons industry.
“We are launching a transparent, controlled export mechanism for Ukrainian defense technologies,” Ukraininan Prime Minister Yulia Svyrydenko announced on social media. “It will enable Ukrainian innovation and manufacturing to strengthen the capabilities of our partner countries while generating additional resources to expand Ukraine’s defense industrial base.”
Svyrydenko stressed that the “clear” priority is that every export contract under the recently announced mechanism must contribute to the nation’s “primary objective,” which she defined as a “stronger Ukrainian defense industry and more weapons for the Armed Forces of Ukraine.”
Under the terms of the export mechanism, 20 percent the revenue from the export of finished defense products and technologies, and 30 percent of the exports of components will be directed to a “special state budget fund” for Ukraine’s defense industry. The export mechanism will be in place for as long as Martial Law in Ukraine is in effect — which has been the case since Russia’s February 2022 invasion.
“The mechanism introduces transparent rules for exports to partner countries under the Drone Deal format. The needs of the defense forces remain an unconditional priority,” Svyrydenko said, according to the Ukrainian outlet Ukrainska Pravda.
“If a manufacturer confirms it can fulfil both a state contract and an export contract, it will be able to export,” she continued.
Ukrainska Pravda noted that a minimum contract value for finished products has been set at 15 million Ukraininan hryvnias (roughly $334,000).
The Kyiv Independent, for its part, reports that Defense Minister Mykhailo Fedorov said during a conference in Kyiv on June 30 that the entire process “will be as digitalized and as streamlined as possible, and I hope you’ll enjoy selling your products to our partners.”
Fedorov reportedly affirmed during the event that Ukraine has “already adopted more than 50 legal and regulatory acts related to defense technology during the war,” and has been working on the weapons export framework “for more than a year.”
According to the Ukrainian Defense Ministry, countries that have signed Drone deals with Ukraine will receive a “streamlined” access to Ukraininan weapons under the new exports framework. The Ukraininan Foreing Ministry will be tasked with compiling the list of partner countries in which the streamlined process is applicable.
“The procedure includes safeguards to ensure that Ukraine’s defense needs are met. A permit may be denied if the Ministry of Defence of Ukraine or another state customer plans to procure the relevant goods for Ukraine’s defense needs, or if the relevant goods are included on the List of Critical Goods,” the Ministry’s statement read in part.
“At the same time, the manufacturer may guarantee that it can both fulfill the state contract as a priority and deliver the contracted export volume. In such cases, demand from state customers will not constitute grounds for denying the permit,” the text continued, and stressed, “Failure to fulfill obligations to state customers in the defense sector constitutes grounds for suspension or revocation of the export permit.”
Ukraine’s new weapons export framework comes nearly two months after President Volodymyr Zelensky announced in May that his administration was working on inking drone deals with about 20 other countries.
“Arms exports must become a long-term source of economic strength for Ukraine,” Zelensky affirmed in an early June address.