Ukraine launches controlled export of defense technologies with new restrictions
The Cabinet of Ministers of Ukraine adopted Resolution No. 875, which implements a model of controlled export for certain military goods and technologies. The new rules allow expanding possibilities for international contracts while maintaining state control tools.
This resolution does not open free export of military products but creates a mechanism for regulated trade of military goods, dual-use goods, and technologies. Manufacturers working under state defense contracts can now export their products without obtaining separate authorization from the Cabinet, although permission from the State Export Control is still required. It is important to note that the innovations also introduce the Drone Deal—special agreements with foreign states regarding unmanned systems and joint technology development.
Despite the simplification, the resolution retains several restrictions. For example, the export permit may be denied if the Ministry of Defense or other state customers intend to use these goods for defense needs. Manufacturers can submit written guarantees to fulfill internal defense needs if previously denied permission. If the state fails to execute the contract within 30 days after refusal, the manufacturer has the right to reapply for permission.
A critical aspect of the innovations is the creation of a new export corridor for dual-use goods and technologies, such as unmanned aerial vehicles and defense systems. This opens up broad opportunities for attracting investments and technological exchange, particularly through joint production and localization.
With the changes, financial aspects of export agreements have also been introduced, including a fee for obtaining permits (20-30% depending on the category of goods), which should be considered part of the business model. The total value of the contract cannot be less than 15 million UAH, which also adds to the challenges for manufacturers in pricing and negotiations.
Experts believe that successful implementation of the new rules can significantly strengthen Ukraine’s positions in international defense markets, but emphasize the importance of the stability of permits and control over the end use of the goods. This decision opens a new phase in the development of the Ukrainian defense industry while leaving questions about the effectiveness of implementing new mechanisms.
| Key Changes | Meaning |
|---|---|
| Controlled export model | Regulated market opening for military goods |
| Drone Deal | Special agreements with states for unmanned systems |
| Contract threshold | At least 15 million UAH for export |
| Permit fees | From 20% to 30% depending on the category of goods |
