Ukraine is introducing new rules for the export of weapons, however, industry experts warn that without the participation of the private sector in the development of regulations, the country risks losing competitiveness in the global market. Key players in the defense industry call the proposed conditions a de facto export ban, especially in the segment of critical components.

Systemic gap in document preparation

As reported by RBC-Ukraine, when developing export rules, state representatives did not involve representatives of the private sector in consultations. Serhiy Honcharov, CEO of NAUDI, emphasizes that this is not about offending individual companies, but about a systemic gap in the document preparation process. The lack of dialogue with manufacturers has led to conditions that could paralyze the industry.

30% rate: a decision closing the market

One of the most controversial points was the 30% rate on components. According to Honcharov, this decision effectively closes the market for Ukrainian manufacturers. It is precisely in the components segment that Ukrainian companies critically need to enter European markets, replacing Chinese products. However, competition there is predominantly price-based, and additional costs make Ukrainian goods uncompetitive.

"Such a rate is effectively prohibitive, and it is unlikely that anything will go anywhere from here — neither low-tech nor high-tech," noted Honcharov. He added that components cover both cheap propellers for FPV drones and expensive thermal cameras, despite high demand for both types.

Administrative barrier: 20% of contract value

Another serious obstacle became the mechanism for obtaining an export license. Previously, the fee for it was about a thousand hryvnias and was fixed. Now it has transformed into 20% of the contract value — an amount tied to a specific contract or even a letter of intent from a foreign customer.

"To get an export license, you must pay $20 million immediately for an administrative service," Honcharov gave an example of a contract worth $100 million. The key problem, according to him, is that these funds are not returned if the license is ultimately refused.

Simplified export mechanism: hopes and risks

Despite the criticism, on July 1 it became known that Ukraine is introducing a simplified mechanism for exporting domestic weapons and military technologies to partner countries. The new model will allow reducing the time for reviewing applications from manufacturers by three times. The simplified procedure will apply to supplies to countries with which agreements have been signed in the Drone Deal format, and its main change is the reduction of the application review period from 90 to 30 days.

It was also reported that the United States is purchasing a large batch of Ukrainian drones from the company F-Drones. The company was the first to receive permission to export weapons from Ukraine, which became an important signal for the industry.

Prospects and challenges

New export rules open up opportunities for the Ukrainian defense industry, but at the same time create serious risks. Without taking into account the opinion of the private sector and revising controversial conditions, the country may lose competitiveness in key markets. Experts urge the authorities to review their approach to regulating exports so as not to miss the chance to take a worthy place in the global arms supply chain.