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24 February, 2021
Failure to Implement the Law on Defence Procurement Threatens Ukraine's Movement to NATO


Cabinet of Ministers of Ukraine

The сopy to:

Ministry of Strategic Industries of Ukraine

Ministry of Defence of Ukraine

National Security and Defence Council of Ukraine

Office of the President of Ukraine

A Joint Statement of the Civil Society

Civil society urges the unblocking of defence procurement reform to prevent the possible return of post-Soviet corrupt practices. The Law “On Defence Procurement” came into force on January 1, 2021, but it does not work because the regulatory acts needed to implement it have not been developed and approved in a timely manner. Thus, defence procurement reform is under threat.   
The Ministry of Strategic Industries and the Ministry of Defenсe needed to develop a series of regulatory acts to reform defenсe procurement in accordance with Euro-Atlantic principles enshrined in the Law. As it was not fulfilled in a timely manner, implementation of the Law has failed. The deadlines set by the Law and the relevant Presidential Decree are overdue. There is no approved list of state customers in the defence sector, making it impossible to carry out any procurement procedures under the new law, including but not limited to the needs of the home front. The draft Cabinet of Ministers regulatory acts previously developed by the responsible ministries partially contradict the Law and preserve the current status quo: excessive state secrecy, lack of competition, lack of producers’ transparent access to closed procurement, lack of market pricing, and lack of a transparent and progressive model to determine the profits of monopoly enterprises. All these factors can lead to the reform’s complete failure.
These acts nullify the idea of a progressive Law on Defence Procurement and make it impossible for implementation.
The Ministry of Strategic Industries regularly ignores suggestions from independent experts and co-authors of the Law on Defence Procurement itself, and even the recommendations of selected state bodies such as the National Agency on Corruption Prevention. Military-industrial policy is formed without any dialogue with civil society, which contradicts the principles of democratic and civil oversight over the defence and security sector. Democratic oversight, reduced classification of defence procurement, and defence procurement reform are key requirements for Ukraine to move towards NATO and to receive U.S. military-technical assistance. The collapse of defence procurement reform is a serious obstacle to Ukraine’s movement towards NATO membership criteria. We urge the Cabinet of Ministers, the President of Ukraine, and the Verkhovna Rada Committee on National Security, Defence, and Intelligence to:
  1. Publish the draft regulatory acts developed to implement the Law on Defenсe Procurement and to discuss them with civil society;
  2. Take into account the critical suggestions that the expert community has repeatedly provided; we stress that selected provisions of these acts make real defence procurement reform and development of the defence industry impossible.
We remain committed to providing any necessary expertise and assistance to the authorities to ensure effective implementation of the Law on Defence Procurement.
Signatories: Independent Defence Anti-Corruption Committee (NAKO), NGO StateWatch NGO Defenсe Procurement Reform Project supported by the UK Ministry of Defence Transparency International Ukraine, NGO Ukrainian Defence and Security Industry Association, NGO Institute of the Law Initiatives, NGO New Europe Center, NGO Anti-corruption Research and Educational Center “ACREC” Automaidan of the Vinnytsia region, NGO