{"id":72769,"date":"2026-05-14T15:48:59","date_gmt":"2026-05-14T15:48:59","guid":{"rendered":"https:\/\/one.sightlinemg.com\/defensenews\/uncategorized\/2026\/05\/14\/blacklists-corruption-and-frontline-needs-ukraine-tackles-an-arms-export-puzzle\/"},"modified":"2026-08-08T01:36:53","modified_gmt":"2026-08-08T01:36:53","slug":"blacklists-corruption-and-frontline-needs-ukraine-tackles-an-arms-export-puzzle","status":"publish","type":"post","link":"https:\/\/one.sightlinemg.com\/defensenews\/global\/europe\/2026\/05\/14\/blacklists-corruption-and-frontline-needs-ukraine-tackles-an-arms-export-puzzle\/","title":{"rendered":"Blacklists, corruption and frontline needs: Ukraine tackles an arms-export puzzle"},"content":{"rendered":"\n

KYIV, Ukraine \u2014 The U.S. State Department and Ukraine\u2019s ambassador in Washington have outlined a memorandum that would route Ukrainian drone technology into joint ventures on American soil in an attempt to inject Kyiv\u2019s combat experience into the military\u2019s equipment supply chains.<\/p>\n\n\n\n

The draft agreement would open a legal channel for Kyiv to sell its weapons to the U.S. for the first time since it effectively banned arms exports to maintain its own forces at the start of Russia\u2019s full-scale invasion in 2022, CBS News<\/a> first reported.<\/p>\n\n\n\n

The memorandum, drawn between the State Department and Ukrainian Ambassador Olha Stefanishyna, would integrate Ukrainian producers into joint ventures and tech-transfer arrangements with American firms.<\/p>\n\n\n\n

The development caps two weeks in which Kyiv adopted an export framework dubbed \u201cDrone Deals,\u201d launched a procurement coalition with multiple European partners and watched Washington lift a 1997 import ban \u2013 all while signing four bilateral export contracts and pursuing roughly 20 more across the Middle East and partner countries, President Volodymyr Zelenskyy said this week.<\/p>\n\n\n\n

Zelenskyy touted the new framework at a May 13 summit in Bucharest, Romania, with delegates from NATO\u2019s nine eastern-flank members and their Nordic allies, as seen in a clip of the event posted on X<\/a>.<\/p>\n\n\n\n

\u201cI believe all of us need bilateral Drone Deals,\u201d he said, \u201cusing Europe\u2019s production capabilities and Ukrainian expertise proven in real defense during a real war.\u201d<\/p>\n\n\n\n

Over four years into Russia\u2019s full-scale invasion, Ukraine has built an arms industry that manufactures much of the hardware seen on the battlefield today, but that has struggled to scale up while capped by export bans, funding limitations and manufacturing challenges caused by the ongoing war.<\/p>\n\n\n\n

\u201cThe Ukrainian military will always have the right to priority and sufficient supply \u2013 they will take what is needed, and the volume beyond that will go to export,\u201d Zelenskyy said in a April 28 Telegram<\/a> post announcing the new policies.<\/p>\n\n\n\n

After years of struggling to arm its one million active-duty soldiers, Kyiv has been wary of allowing its domestic producers to sell their weapons abroad at a markup in case they may choose profit over supplying their own military. <\/p>\n\n\n\n

But times have changed. Foreign defense funding to Ukraine hit $6.1 billion in 2025, marking a tenfold increase over the roughly $600 million the year before, according to the Ministry of Defense<\/a>, and the world is turning to Kyiv as the leader in modern warfare and defense tech.<\/p>\n\n\n\n

Fears over remaining empty-handed at home appear to have subsided.<\/p>\n\n\n\n

\"\"
Ukrainian President Volodymyr Zelenskyy arrives to attend the summit of B9 and Nordic countries in Bucharest, Romania, on May 13, 2026. (Alex Nicodim\/Anadolu via Getty Images)<\/figcaption><\/figure>\n\n\n\n

\u201cIn some production areas, we currently have up to 50% surplus capacity,\u201d Zelenskyy said last month.<\/p>\n\n\n\n

Ukraine\u2019s defense production capacity has grown 35 times since the invasion began, from $1 billion to $35 billion, but domestic contracts covered only about a third of that last year \u2013 a gap Kyiv\u2019s National Security and Defense Council<\/a> projects will widen, with capacity expected to hit $55 billion in 2026.<\/p>\n\n\n\n

Western contracts pay multiples of what the domestic procurement budget can offer, and those funds are the only capital large enough to fund the scale Ukraine needs to sustain both its front line and its surging arms industry.<\/p>\n\n\n\n

Stefanishyna told the Philadelphia Inquirer<\/a> in April that more than 100 U.S. investors have already expressed interest in Ukrainian defense-tech companies, and the U.S. government bought an initial 1,000 P1SUN drones from Ukraine that month.<\/p>\n\n\n\n

Business lost?<\/h3>\n\n\n\n

Ukrainian producers have been pressing for new and improved export laws for years, but especially since demand from foreign buyers for Ukraine\u2019s drones began surging after the war in the Middle East kicked off earlier this year.<\/p>\n\n\n\n

Ihor Matviyuk has spent months turning down orders he cannot legally fill. He heads Aero Center Drones, a Kyiv-based manufacturer building FPV strike platforms and interceptor drones.<\/p>\n\n\n\n

Until now, the only legal route has run through state arms-trade companies like Ukrspecexport, Progress and SpetsTechnoExport that take the contract on the producer\u2019s behalf, he said.<\/p>\n\n\n\n

\u201cNo Ukrainian company can export military goods independently. Companies can manufacture, but they cannot ship,\u201d Matviyuk told Military Times<\/a> in March.<\/p>\n\n\n\n

He said a Western government asked Aero Center for 1,500 interceptor drones earlier this year, a request he\u2019s now received several times over as the Iran war demonstrates how quickly a state can exhaust conventional interceptor stocks defending against mass-drone attacks<\/a>.<\/p>\n\n\n\n

But Matviyuk said he had to turn down the request despite having the manufacturing capacity to do it within weeks without affecting his current contracts.<\/p>\n\n\n\n

\u201cWe cannot currently export large quantities,\u201d he said at the time. \u201cIt\u2019s only possible at the state level.\u201d<\/p>\n\n\n\n

The new framework permits five export categories \u2013 drones, missiles, ammunition, software and integration services \u2013 drawn from Defense Ministry-certified surplus. The Foreign Ministry and intelligence services have naturally blacklisted Russia and its cooperators from buying Ukrainian.<\/p>\n\n\n\n

\u201cThe National Security and Defense Council of Ukraine, based on intergovernmental agreements with partners, will define the framework for cooperation \u2013 just to ensure that Ukrainian technologies and Ukrainian weapons do not end up in Russian hands,\u201d Zelenskyy said.<\/p>\n\n\n\n

It opens three legal channels for producers \u2013 independent licensing through the State Export Control Service, routing via specialized state arms-trade companies, and a 15-day \u201cDefense City\u201d preliminary permit that skips Cabinet designation, though the interagency commission still reviews every application under all three routes.<\/p>\n\n\n\n

Defense City is a special legal regime for defense manufacturers, launched in January, that grants qualifying firms tax exemptions, simplified customs and the fast-track 15-day export permit regardless of where they operate in Ukraine. Approved firms will also be able to sell through the ten European hubs Zelenskyy announced in February, according to Euronews<\/a>.<\/p>\n\n\n\n

Every signed contract will now move through a 90-day clock at the State Export Control Service and a 17-member interagency commission under the National Security and Defense Council, replacing a licensing regime that set no fixed timelines and left approvals to bureaucratic discretion.<\/p>\n\n\n\n

The NSDC commission had sat dormant for eight months until Zelenskyy reactivated it in December. It has made roughly 80 decisions since then, according to Ukrinform<\/a>.<\/p>\n\n\n\n

The new framework is intended to break the bottleneck that turned Matviyuk\u2019s prospective 1,500-interceptor order into a loss, and Zelenskyy said the new timelines should close the room for graft that the old system created.<\/p>\n\n\n\n

\u201cWe also need automatic export authorizations with a clear and predictable timeframe for approval, so that there is no ground for corruption,\u201d he said.<\/p>\n\n\n\n

Kyiv officials have pledged to continue advancing anti-corruption enforcement in parallel \u2013 a difficult process that has seen several successes but still has significant work ahead, according to a 2026 analysis by the global watchdog group Transparency International<\/a>. <\/p>\n\n\n\n

Procurement orchestrations<\/h3>\n\n\n\n

For Kyiv, things are moving forward elsewhere, too, when it comes to fresh approaches to defense purchases with European partners.<\/p>\n\n\n\n

Ukraine and five European nations \u2013 Finland, Italy, Norway, Sweden and the United Kingdom \u2013 signed the CORPUS Memorandum on April 30 in a Kyiv hotel garage-turned-bunker, launching a defense-procurement coalition that links the countries\u2019 national procurement agencies to coordinate buying, share supply-chain intelligence and open a path to joint contracts.<\/p>\n\n\n\n

Ukraine\u2019s CORPUS chair, Arsen Zhumadilov, also heads the country\u2019s Defense Procurement Agency, set up in 2023 to take over arms buying after scandals over inflated food contracts and substandard winter jackets cost then-Defense Minister Oleksii Reznikov his job. <\/p>\n\n\n\n

One of the DPA\u2019s biggest moves against corruption and approval delays cut out the intermediaries \u2013 middleman firms that had been a required layer between state buyers and private manufacturers. Their share of arms procurement has fallen from 81% to 12%.<\/p>\n\n\n\n

Zhumadilov\u2019s role in CORPUS places Ukraine\u2019s own procurement agency inside a multinational coalition, rather than leaving it only on the buyer\u2019s side.<\/p>\n\n\n\n

\u201cWe are starting with the exchange of experience and best practices to build coordination mechanisms, mutual trust, and plan for the future,\u201d Zhumadilov said at the CORPUS post-signing press conference<\/a>.<\/p>\n\n\n\n

Denmark, France and the Netherlands have already registered interest in joining the group, he added.<\/p>\n\n\n\n

More bilateral defense procurement partnerships are in the works, too. Kyiv and Berlin announced six new joint ventures over the last month, and Norway inked a parallel cooperation declaration to mass-produce Ukraine\u2019s mid-range strike drones. Zelenskyy has announced plans to open ten export hubs across Europe in 2026, with production lines already running in the United Kingdom.<\/p>\n\n\n\n

European leaders increasingly see Ukrainian weapons production as key to allied defense.<\/p>\n\n\n\n

\u201cInstead of us thinking that Ukraine needs Europe, perhaps we should think that we in Europe need Ukraine more,\u201d Finland\u2019s president, Alexander Stubb, said on May 4.<\/p>\n","protected":false},"excerpt":{"rendered":"

After years of struggling to arm its one million active-duty soldiers, Kyiv has been wary of allowing its domestic producers to sell their weapons 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