KYIV, July 1 (Reuters) – Ukrainian arms manufacturers will be able to export products and components under a new framework that channels a percentage of revenues into a state defence fund, Prime Minister Yulia Svyrydenko said on Wednesday, as Kyiv seeks to raise funds for its burgeoning weapons industry.
Ukraine announced it was permitting wartime arms exports in February, but manufacturers have since complained of regulatory barriers as the government has retained tight control and threshed out a framework to regulate deals.
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However, the country also needs funding for its defence industry, which has swelled since Russia’s 2022 invasion, to further expand capacity and invest into research and development.
Svyrydenko, writing in English on X, said the scheme would levy 20% of proceeds from finished defence goods and 30% from components.
She said manufacturers would have to prove their capability to fulfill Ukrainian defence orders and export contracts simultaneously, and restrictions would apply to items placed on a list of critical goods.
“Every export contract must serve one strategic goal: strengthening Ukraine’s defence industrial base and delivering more weapons for our Armed Forces,” Svyrydenko wrote.
The system would operate throughout the period of martial law, which has been in effect in Ukraine since Russia’s invasion in February 2022.
She said it would operate under the aegis of bilateral “drone deals” which Ukraine has already struck with some European and Middle Eastern states, and is seeking to sign more, including with the United States.
Svyrydenko said Ukrainian technologies will be “transferred without assigning intellectual property rights and will remain subject to controls on their use and re-export.”
She added that more than 50% of weapons in battlefield use by Ukraine were domestically produced and that defence manufacturers “continue to expand production of drones, electronic warfare systems, ammunition, components and other critical defense technologies”.
Reporting by Max Hunder and Ronald Popeski
Editing by Gareth Jones and Chizu Nomiyama
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