NAUDI has called for lifting of restrictions on controlled arms exports: the defence industry remains underutilised
The National Association of the Defence Industry of Ukraine(NAUDI) has called for the immediate lifting of restrictions on controlled arms exports, accompanied by clear and transparent procedures.
This is stated in a statement by the association, reports Censor.NET.
Details
The association welcomes the decision to lift the ban on the export of arms and military equipment, but notes that the system still functions more as a barrier than as a licensing mechanism.
"Political statements regarding the lifting of export restrictions, unfortunately, do not yet correlate with the actual decisions being made by the relevant export control authorities.
During the full-scale war, the Ukrainian defence industry has proven its effectiveness, flexibility and ability to rapidly scale up production. At the same time, as of today, a significant portion of the sector’s production capacity remains underutilised due to the limited volume of domestic government orders," NAUDI explained.
They emphasised that due to a lack of funding, systemic problems in our sector are only intensifying. Companies are facing a widespread shortage of working capital, are forced to limit investment in development and technology, and are reducing the pace of production scaling.
"If systemic funding problems in the sector deepen, Ukraine risks losing the production capacity for critical categories of military equipment, which will inevitably lead to a deterioration in our country’s position in the war," the association noted.
At the same time, NAUDI noted that controlled exports of arms and military equipment, provided that supplying the Armed Forces of Ukraine is given unconditional priority, could strengthen Ukraine’s defence capabilities and geopolitical agency.
The introduction of such a mechanism, they explained, would generate additional tax revenue for the state budget, create a financial basis for scaling up production and investing in new developments, increase the volume of arms manufactured for the Ukrainian army by expanding production capacity, and create thousands of additional jobs.
"Continued restrictions on exports create long-term risks in the form of production being moved outside Ukraine, a gradual drain of technology and expertise, and a loss of ground in foreign arms markets. This will lead to the weakening of the state," NAUDI noted in its statement.
What are they proposing?
NAUDI has proposed measures that would simultaneously protect the interests of the Army, boost the budget and strengthen Ukraine’s influence on the global arms market:
1. Processing of export applications within 14 days (introduction of a default approval mechanism). If the Ministry of Defence plans to procure the relevant type of military product, it notifies the manufacturer; if not, the export of the product should be permitted.
2. Amending legislation to introduce a 10% export duty and channelling these funds towards the procurement of arms for the Security and Defence Forces.
3. Maximising the simplification of inspection procedures where the potential importer is the Ministry of Defence or another government agency of a NATO member state (or a country with which a relevant security agreement has been signed).
4. Simplifying the procedure for obtaining authorisation to export domestic products.
5. Prioritising support for the export of finished products rather than encouraging the export of technology.
More on arms exports
- As a reminder, following the start of the full-scale Russian invasion in 2022, Ukraine banned the export of military goods in an effort to provide the army with everything it needed. However, in 2024, Ukraine allowed for the possibility of lifting such a ban.
- In the summer, Ukrainian President Volodymyr Zelenskyy stated that Ukrainian weapons could be exported in a controlled manner via production lines abroad.
- In November, the head of state announced that Ukraine would open two offices for arms exports — in Berlin and Copenhagen — and was preparing an agreement on the sale of US drones, known as the ‘Drone-deal’.
- Zelenskyy has set a target of over 50% of Ukrainian-made weapons being used in the defence of our country.
