How a Ukrainian company can become a special importer of weapons: explanation of the Ministry of Defense

To export or import weapons, a Ukrainian company must obtain the authority to carry out international transfers of goods, a permit from the State Export Control Service, and undergo a number of checks, including those of the Security Service of Ukraine. This was reported by the Ministry of Defense of Ukraine in response to a request by UNN.

The MoD explained that in order to obtain the authority to export or import arms, a company must be registered with the State Export Control Service as an entity engaged in international transfers of goods. After that, the company must send to the State Special Export Control Service an application for authorization to export and import military goods and documents.

"Applications and documents submitted for authorization are reviewed by the State Export Control Service and sent for consideration to the Ministry of Economy, Ministry of Defense, Ministry of Foreign Affairs, Security Service of Ukraine, intelligence agencies of Ukraine and, if necessary, other central executive authorities," the Defense Ministry said in a response.

It is noted that a number of factors are taken into account when considering an application from a company:

-        its activities in the international market over the previous three years;

-        no data on violations of the law, including export control legislation, as well as the protection of state secrets in the course of foreign economic activity by the company or its officials;

-        Participation in the execution of the state defense order (if any);

-        expediency of granting powers for a certain nomenclature of goods based on the interests of the state;

-        The company (institution, organization) has an internal export control system and officials who ensure the functioning of this system;

-        accounts payable and receivable;

-        Availability of production facilities and scientific and technical potential.

The State Special Export Control Service must review the application and the documents attached to it within 40 days.

The application will not be considered if:

-        when it contains inaccurate data,

-        The State Export Control Service has information on the facts of violations of the state export control legislation by the company;

-        when the certificate of registration of a company as a subject of international transfers of goods expires less than 30 days from the date of receipt of the application and the documents required to obtain a new certificate have not been submitted.

If the State Special Export Control Service accepts the application, it prepares a draft resolution of the Cabinet of Ministers of Ukraine on granting the company the authority to export/import arms or a conclusion on the inexpediency of granting such authority, taking into account information from the Ministry of Economy, the Ministry of Defense, the Ministry of Foreign Affairs, other central executive authorities involved in its consideration, as well as the Security Service of Ukraine and the intelligence agencies of Ukraine.

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It is difficult for Ukraine to buy much-needed ammunition for its army because the arms market is very specific and operates as a large monopolywhere the main players know each other. Therefore, the Ministry of Defense often has to involve intermediaries in the process of purchasing ammunition on the world market, in particular from the Balkan countries. Experts notethat sometimes this leads to an increase in the price of supplies, but due to the high competition in the arms market, counterparties should be accepted as a "necessary element of the game.

The Ministry of Defense reportedthat in 2022-2023, it signed state contracts for the purchase of weapons and ammunition with more than 130 contractors, including 30 foreign companies. 

The Ukrainian Armor Company described what tasks a special exporter undertakes when purchasing weapons. In particular, special exporters search for reliable supply channels at the lowest prices and have to conduct inspections of production facilities and stocks.