Over the past year, the Ukrainian government has streamlined its legislation governing the production of unmanned aircraft systems (drones) and ammunition, eliminating many bureaucratic procedures. The government has also created certain benefits for domestic drone producers, including the cancellation of VAT and import duties for drone components required for production and repair by Ukrainian entities. These benefits are valid throughout the duration of martial law.
The Ukrainian government has also passed a series of “experimental projects,” which streamline procedures for the production, procurement and supply of drones and ammunition, including means of radio-electronic warfare and active countermeasures against technical intelligence of domestic production. One of the most recent experimental projects has now allowed domestic producers to produce, procure and supply ammunition for unmanned aircraft systems and combat units of unmanned systems during martial law. This novation will allow domestic drone producers to expand their production activity and create new local jobs and proceeds for the armed forces.
Last week some of the world’s largest foreign defense companies were in Kyiv to attend various conferences and make arrangements to set up local production facilities with Ukrainian partners to manufacture military equipment, including drones and munitions.
After speaking with a few of the companies, and listening to their questions, we prepared a memorandum covering the following topics:
- Setting Up Production Facilities in Ukraine: Options for Foreign Defense Companies
- Transfer and Protection of Dual Application Technologies in Ukraine
- Drone and Ammunition Production: Licenses and Permits
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