08.01.2025 Money laundering

Servants of the People want to “forgive” suppliers who disrupted the supply of weapons to the front

Слуга народа - результаты Слуги народа на выборы в Раду 2019 | РБК-Україна

In the midst of the war, when every day counts, the Servants of the People decided to take a shocking step – to legislatively forgive arms suppliers who failed to fulfill contracts and provide the Defense Forces with timely deliveries of weapons and equipment. This is not just news – it is a serious signal of growing corruption in the defense sector, which could cost Ukraine its security and the lives of its military.

The case at hand

There are two draft laws on the agenda of the Verkhovna Rada: No. 12202 and No. 6013 (amendment No. 502), which propose to remove fines for arms suppliers if they delay deliveries for more than 30 days. The essence of these changes is to exempt companies from fines of 7% of the contract value, even if they have not fulfilled their obligations.

If these legislative initiatives are adopted, these “forgiveness” will affect suppliers such as Spetstenhoexport (which failed to deliver weapons worth UAH 6 billion) and Lviv Arsenal, through which UAH 1.5 billion was withdrawn and the ammunition never arrived at the front.

At first glance, these may look like minor legislative changes, but they are much more serious. According to recent reports, these bills are being promoted in the interests of companies that either failed to deliver equipment on time or delivered defective equipment and now want to avoid responsibility. It is important that these schemes go hand in hand with other violations in defense procurement.

Billions in fake procurement: a chronicle of violations

We have repeatedly covered the facts of embezzlement in the procurement of weapons and ammunition for the Armed Forces of Ukraine. In particular, it was discovered that private companies like Skryntek LLC, instead of actually supplying drones to the Armed Forces, began to earn billions from fictitious procurement.

Until 2022, the company had an annual income of only UAH 1.5 million, and by 2023 this figure had risen to UAH 3 billion. However, for this money, the Ukrainian military received only delays, poor quality equipment, and numerous violations.

“Skryntek entered into contracts under closed procedures without participating in open tenders, which made public control impossible. The products supplied did not meet the declared characteristics. Some of the funds, according to our data, may have been transferred through offshore companies, which gives rise to serious suspicions of money laundering.

A similar situation occurred with YASNO 2022, which until 2024 was only engaged in grain supply, and now successfully sells drones for the Ministry of Defense. Another company, Nebo v Piksel, is associated with Maksym Makarenko, a member of the Kyiv City Council from the UDAR party, which raises the issue of lobbying in the military supply market.

It is important to note that there are other companies among the drone suppliers that had nothing to do with military products before the war. For example, Flash Tech, which was registered only in the summer of 2023, has already supplied drones to dozens of government agencies.

It is important to note that among the drone suppliers are other companies that had nothing to do with military products before the war. For example, Flash Tech, which was registered only in the summer of 2023, has already supplied drones to dozens of government agencies.

Another interesting case is VNA TRADE, a company that sold cosmetics and perfumes before the war, but has now become a supplier of drones to the Ministry of Defense with an overpayment of 215 million hryvnias.

All of them supplied goods to the Armed Forces with violations, in particular, the drones often failed to pass tests. So how were the soldiers supposed to use them at the front?

The senior officials who oversaw these purchases are people who hold key positions in the Defense Ministry, including Minister Umerov and the heads of state-owned enterprises, such as AOZ, Bezrukova, and DOT, Zhumadilov.

In addition, numerous schemes for reselling ammunition at inflated prices have been uncovered in recent months. For example, firms like YDT LLC have been actively using intermediaries, such as the Bulgarian company BIEM, to inflate prices for mortar shells.

The amount of contracts for the production of mines alone is 400 million euros. However, this ammunition, which was supposed to be produced in Ukraine, is delivered to the Armed Forces at inflated prices through shell companies.

An example of corruption in numbers: One of the most recent cases involves 700 drones, for which UAH 7 million was overpaid. Each drone cost 10-12 thousand hryvnias more than a similar one purchased by other organizations.

For each of the above facts, we filed complaints with law enforcement agencies. Some of them, such as the BES of Ukraine, have initiated criminal proceedings (№ 72024102100000017), while others simply ignore the situation. Despite the fact that each of these actions poses a threat to the national security of the country.

And now the Servants of the People want to hush up each of these facts. So what’s the matter? What was the reason for this decision and where is the reaction of the main controllers, Shmyhal and Umerov?

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