24 April 2019

Defence and security issues are pivotal issues of the President of Ukraine, and, corruption within defence is a serious threat for national security. NAKO has studied the statements and actions of Presidential candidates concerning defence issues and the answers to the NAKO’s pre-election questionnaire thoughoruly. Simultaneously,  we have focused significantly on Ukroboronprom and the debate which broke out during the election period after the release of the Bihus.Info investigation.

Volodymyr Zelenskiy’s campaign office gave us written responses to NAKO’s 7 questions on how to fight corruption within the defence sector. Now that he has won the race, we are attentively watching to see whether the promises (which closely coincide with NAKO recommendations) will be fulfilled.

Unlike Zelenskiy, Petro Poroshenko’s campaign headquarters did not provide answers to NAKOs questionnaire. This, in light of the fact that since 2016, Bankova has received 6 research publications on corruption risks within the defence sector and over 120 recommendations on how to minimize them.

NAKO has also been making significant efforts to organize an international audit of Ukroboronprom. After the scandal with Ukroboronprom, the President fired one of its key figures – Oleh Hladkovskiy, the Deputy Secretary of NDSC, replacing him with a defender of Kramatorsk airport, Serhii Kryvonis.  Then, the President called for an extraordinary NSDC meeting. As a result, a decision, enacted by Presidential Decree of 15 April, 2019 was made. Among other things, it foresaw that the following actions should take place within one month:

  • An audit of Ukroboronprom and its enterprises were to be organized (with the participation of international experts), and the public was to be informed of its results.
  • A public hearing was to be held identifying the peculiarities of the transformation of  MIC state commercial enterprises into joint-stock companies. Foreign investments were also to be attracted to the MIC thereby providing state control aimed at neutralizing potential threats to national security.
  • Amendments were to be drafted on Law of Ukraine “On State Defence Order” (SDO).

The deadline of this Presidential Decree was April 20 (right before the election day). The deadline has been missed.

Rather, days before the second  presidential election round, the Chairman of the Parliamentary Committee on National Security and Defense, Serhii Pashynskiy, took the initiative of fighting the defence corruption by promising to urgently introduce a bill to the Parliament. A new bill, inter alia, aims to declassify more than 80% of SDO, allow for the creation of joint defence enterprises with strategic partners, and, liquidate Ukroboronprom; transferring enterprises under its control of a new central executive body which will be responsible for the defence industry.

Such a bill, in case of its proper implementation, can be a significant step further for Ukraine’s defence industry. However a reckless approach to defence industry reform threatens significant risks. Particularly, a hasty liquidation of Ukroboronprom (Pashynskiy’s proposal does not mention the need for an international audit). The international audit was to be a key element for the future decision-making regarding the  fate of the MIC state sector.

NAKO hopes that the promises articulated by the candidates will eventually become the reality, and, is committed to keeping society informed.  Not only on the implementation status of pre-election promises, but also on the (non)implementation of Presidential Decrees.

In the meanwhile, NAKO calls upon President Poroshenko, who in any case remains in office until Zelenskiy’s inauguration, to provide for the implementation of his own Decree of April 15, 2019.