Ukraine Defense Procurement

Ukraine is dismantling the obsolete, Soviet system of State Defense Acquisition in favor of unified defense acquisition plans.  The law “On Defense Procurement” was approved in July 2020, declassifying a significant part of the state defense order, creating a competitive and transparent environment in the arms and military hardware market. 

“Declassifying a significant part of the state defense order, creating a competitive and transparent environment in the arms and military hardware market is critical to improving our country’s defense capability at a time when it needs security and a buildup of military strength. That is why this law is particularly important,” Oleksandr Zavitnevych, Chairman of the Verkhovna Rada Committee on National Security, Defense, and Intelligence, said.

The law aims to fundamentally change the mechanism of pricing, change the system of product quality control, and create conditions for efficient coordination between producers and customers. The new defense procurement policy is supposed to minimize corruption risks, raising the level of transparency, and increase fair competition in this sector.  The new approach to defense procurement is meant to bring balance and strategy-based priorities.  The Ministry of Defense of Ukraine will set up an independent task force to inspect and approve all acquisitions.

In December 2019, the Ministry of Defense of Ukraine started working with the NATO Support and Procurement Agency (NSPA), making its first trial purchase. Ukraine joined it in 2016 but made no progress in implementing it.  

To learn more about this and other export opportunities in Ukraine, please contact the U.S. Commercial Service in Ukraine office.kyiv@trade.gov.