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17 July, 2020
Revolutionary Law ‘On Defence Procurement’ Adopted
On 17 July 2020 Ukraine’s Parliament adopted the Law ‘On Defence Procurement’. The law was supported by 276 MPs. The law has to minimize corruption risks in Ukraine’s defence sector: it ensures transparency of defence procurement procedures, considerably increases the transparency of procurement planning, and provides effective civil and democratic oversight. After the law is implemented, budget funds for defence-related goods, services and works will be used more efficiently. Apart from that, the law also stipulates the opportunity to create a Central Procurement Agency for the MoD which will enable saving funds for the ministry and minimizing corruption risks.

NAKO has been involved in the process for pushing for the new legislation and formulating the bill on defence procurement since 2017. At the final stage for the revised second reading, NAKO provided 8 key recommendations, out of which 4 were partly included in the law. Still, several important issues that require further elaboration remained. For instance, one of the important questions that we raised is the need to create a clear system to declassify on a regular basis data about the plans, content and volume of financing of contracts that have been already implemented according to the Law ‘On State Defence Order’. We supported the idea to launch a special order of de-classification. Originally, it was supposed that a special inter-agency commission would deal with declassification. The commission was supposed to review all the executed contracts and define which of them could be de-classified without the damage to national security. However, the final version of the text includes the opportunity to de-classify contracts by both the commission and individual experts, without clear explanation who should do it. In our opinion, this brings serious risks of legal uncertainty.

Other contradictory questions that we paid attention to include removing from the text of the names of procurement organizations and increase of the National Defence and Security Council powers as for approval of procurement plans of the State Customers (which in our opinion can damage the checks and balance system defined by the Constitution). For the first time ever the draft law in Ukraine’s defence sector was developed involving all the key stakeholders including the relevant government bodies, state and private arms producers and the civil society. The Independent Defence Anti-Corruption Committee was actively engaged in this legislative process as the coordinator of civil society and expert community. NAKO’s recommendations concerning minimizing corruption risks in the State Defence Order system presented in our report on SDO reform were also taken into consideration during the work on the draft law.