Support Us

State-owned companies received billions to purchase weapons, failed to deliver, then withdrew funds from country

Thursday, 25 May 2023, 12:09
State-owned companies received billions to purchase weapons, failed to deliver, then withdrew funds from country

Ukrainian state-owned companies engaged in international arms purchases received billions of hryvnias under Defence Ministry contracts in 2022, then failed to deliver.

Source: Special looters. How arms importers withdrew billions of hryvnias from the country during the war by Ukrainska Pravda 

Details: Ukraine’s Ministry of Defence signed contracts with several arms importers - SpetsTechnoExport (STE), Ukrspecexport, Progress, and the Defenсe Procurement Agency - mainly in the spring and summer of 2022.


The Ministry of Defence paid 100% upfront, but the companies have yet to fulfil the orders. In the case of at least some of the contracts, the money received was moved abroad and transferred to foreign firms.

In early 2023, the Ministry of Defenсe began filing lawsuits against state suppliers. As of 23 May, Ukrainska Pravda has managed to find at least 30 such claims in the court register.

The claims for overdue contracts that were unearthed in the register are worth UAH 8.9 billion [about US$265 million – ed.].


This UAH 8.9 billion includes both the advance payments received by the suppliers and the fines and penalties incurred for late execution of the contracts. But according to Ukrainska Pravda, the lawsuits cover only part of the overdue transactions.

The court handed down judgments requiring that funds be repaid to the state in just two of the cases: Ukrspecexport was required to repay UAH 293.4 million [about US$7.9 million] and SpetsTechnoExport UAH 121.97 million [about US$3.3 million].

Many of the claims were initially dismissed by the court due to errors in the paperwork. Moreover, in several cases the contractors managed to return the funds while the Ministry of Defence was correcting these errors, and then the court case was closed.

These "peaceful" resolutions occurred only four times, however, with the most significant amount returned being UAH 1.7 million [about US$46,000].

Most of the Defence Ministry's claims are still pending.

Journalists fight on their own frontline. Support Ukrainska Pravda or become our patron!