As we reported in 2023, the Register of Damage for Ukraine caused by the Aggression of the Russian Federation against Ukraine (“RD4U”) was established as the first component of a future international compensation mechanism for Ukraine.
Since then, the RD4U has progressed from its establishment phase to accepting claims and has gradually expanded its scope to include businesses. The RD4U became operational on 2 April 2024, initially focusing on claims submitted by individuals. In April 2026, the RD4U began opening claim categories to legal entities, including:
C1.1/C1.2 – Damage to or Destruction of (Non-)Critical Infrastructure
C1.5 – Damage to or Destruction of Non-Residential Immovable Property
C3.1 – Damage, Destruction or Loss of Assets
C3.2 – Loss of Control of Property in the Temporarily Occupied Territories
In more detail
How has the RD4U expanded its framework for business claims?
On 10 September 2026, the RD4U opened the final three claim categories available to legal entities, completing the full set of claim categories currently available to businesses:
C3.3 – Business Relocation (Evacuation): Covers losses arising from the relocation or evacuation of business operations due to Russia’s aggression.
C3.4 – Other Economic Losses: Covers economic losses that do not fall within any other RD4U category.
C4 – Humanitarian Expenditures: Covers expenditures incurred in supporting employees and their family members affected by Russia’s aggression.
Russia’s aggression has caused extensive damage to warehouses, production facilities, offices, inventory and other business assets, as well as significant operational and financial losses. In many cases, businesses have also been forced to relocate their operations to safer regions. With the introduction of these final three categories, businesses may now submit claims not only for direct damage to property and assets, but also for relocation costs, other economic losses and humanitarian expenditures incurred as a result of the war. As a result, businesses can register a broader range of war-related losses with the RD4U and preserve their claims for the purposes of potential future compensation mechanisms.
Recommended actions
Businesses should review their losses on an incident-by-incident basis, assess which RD4U category is most appropriate, identify the supporting evidence available and determine how the claimed amount can be substantiated. Businesses that have suffered losses falling within the currently available categories should consider whether they are eligible to submit claims to the RD4U and ensure that those losses are properly documented for the purposes of future compensation mechanisms.
Anna Boyko, Associate, and Polina Novostroina, Legal Clerk, have contributed to this legal update.
Content is provided for educational and informational purposes only and is not intended and should not be construed as legal advice. This may qualify as “Attorney Advertising” requiring notice in some jurisdictions. Prior results do not guarantee similar outcomes. For more information, please visit: www.bakermckenzie.com/en/client-resource-disclaimer.
Ukraine’s Ministry of Economy and Environment has outlined its key priorities for 2027, including the creation of a portfolio of high-quality reconstruction projects.
Minister of Economy and Environment Oleksandr Kravchenko outlined the priorities in an interview with Forbes, according to the ministry.
Kravchenko said consumption currently remains the main driver of GDP growth, while the trade deficit continues to increase. A significant share of international assistance is directed towards consumption rather than expanding production, limiting economic growth and making the current model less sustainable.
The first priority is increasing investment. According to Kravchenko, this requires creating better conditions for both domestic and foreign investors through a comprehensive de-risking system aimed at reducing and sharing investment risks.
“The key gap is war-risk insurance. We need a comprehensive mechanism that will make investment in Ukraine acceptable to private capital. Our target for next year is around $5 billion in foreign direct investment,” Kravchenko said.
The second priority is developing a portfolio of reconstruction projects. The minister noted that Ukraine’s reconstruction could potentially attract hundreds of billions of dollars in investment, making it necessary to prepare high-quality projects that are ready to receive financing.
The target for 2027 is to create a portfolio of such projects worth approximately $40 billion.
Kravchenko also outlined several conditions needed to turn interest in Ukraine into actual investment. These include examples of foreign companies that continue to operate and invest in the country, further development of industrial parks and support mechanisms for projects involving significant investment.
The ministry is also discussing with international partners the possibility of compensating capital investments through the tax system. Investment by Ukrainian businesses remains another important signal for foreign investors.
At the same time, the ministry is working on deregulation and reducing the bureaucratic burden on businesses. A new law on state supervision has already been adopted, while more than 350 of the 1,353 regulatory instruments reviewed have been abolished.
The next steps include abolishing another 58 permits, introducing the e-Permit system with a comprehensive list of required permits, and replacing another 147 permits with declarations.
Deputy Minister of Economy and Environment Yehor Perelyhin announced this during Mining Day, a special industry event organised by the European Business Association.
According to Perelyhin, more than 300 projects across various sectors have already been submitted for consideration by the Fund’s specialised committees, with a significant share — more than 60% — in the energy sector.
“Most of the projects are still fairly raw and lack detailed justification and calculations. At the same time, there are some genuinely interesting ideas and proposals. However, they still need further development. For example, most projects involving subsoil resources require thorough assessment and structuring,” Perelyhin stressed.
According to him, even if the Fund decides to give a particular project the “green light” and refer it to the investment committee, additional time is required to prepare it properly. This includes professional evaluation and structuring, including the structuring of assets if participants from other jurisdictions are involved in implementing the project.
“In other words, to see the first deals and the first projects receive financing, at least 12 months are needed from the start of the Fund’s operational activities [the first contribution was received in September 2025, while the official online portal for accepting applications from investors was launched in January 2026 — ed.]. But we are trying to accelerate this work so that the first projects in energy, mining and possibly several other sectors can be financed by the end of the year,” the deputy minister continued.
In this context, Perelyhin recalled previously announced plans to begin implementing at least three promising investment projects in 2026.
The United States–Ukraine Reconstruction Investment Fund (URIF) was established under an agreement between Ukraine and the United States to finance economic recovery projects. Its initial capital amounts to $150 million, contributed in equal shares of $75 million by Ukraine and the United States, with the U.S. contribution provided through the U.S. International Development Finance Corporation (DFC).
The Fund’s priority sectors include critical minerals, energy, transport and logistics, information and communications technology, and innovation.
The European Business Association has presented the second edition of the White Paper “Support for Business in the Regions of Ukraine Bordering the EU”. The document contains updated recommendations for the Ukrainian government authorities and European Union institutions aimed at developing the economic potential of border regions, strengthening cross-border cooperation, and attracting investment.
Since the beginning of the full-scale war, Ukraine’s western border regions have become key gateways for exports, imports, business relocation, and economic integration with the European Union. Today, around 60% of Ukrainian exports are directed to EU countries, with a significant share of trade and logistics flows passing through border regions.
In the second edition of the White Paper, the Association’s experts updated the analytical framework of the document and supplemented it with new instruments to support cross-border cooperation. Particular attention is paid to new EU financial opportunities — the EastInvest Facility and the Ukraine Investment Framework (UIF), which can contribute to the implementation of joint investment projects between Ukrainian and European partners.
The document covers the Volyn, Zakarpattia, Ivano-Frankivsk, Lviv, Chernivtsi, Rivne, and Ternopil regions and proposes practical solutions for the development of logistics infrastructure, support for small and medium-sized enterprises, creation of cross-border industrial parks and clusters, development of medical infrastructure, increasing border crossing capacity, and deepening economic integration with the EU.
At the same time, the Association emphasises that the proposed recommendations do not envisage any special privileges or status for Ukraine’s western regions. Their purpose is to create an effective cooperation framework for territories where proximity to the EU border creates additional opportunities for business development, investment attraction, and implementation of joint projects.
To promote the developed proposals, the European Business Association and the Association’s Ukraine Recovery Committee submitted the second edition of the White Paper and the corresponding recommendations to the Prime Minister of Ukraine, the Head of the Office of the President of Ukraine, the Chairman of the Verkhovna Rada of Ukraine, and the Minister of Economy, Environment and Agriculture of Ukraine. In its appeal, the Association called for considering the development of border regions as one of the important tools for strengthening trade with the EU and supporting Ukraine’s economy as a whole. An English-language copy of the White Paper was also submitted to the Delegation of the European Union to Ukraine.
We would like to remind that the first edition of the White Paper was presented by the European Business Association in 2025. Since then, the document has served as a platform for shaping business community proposals regarding the development of border territories and their role in Ukraine’s recovery and further economic integration with the European Union.
The second edition of the White Paper is available via the link.
The document was prepared by experts of the Ukraine Recovery Committee in cooperation with the Association’s regional offices in Kharkiv, Dnipro, and Odesa. The updated edition has been submitted to the Cabinet of Ministers of Ukraine, the Office of the President of Ukraine, the Verkhovna Rada of Ukraine, the National Bank of Ukraine, the Ministry of Economy, Environment and Agriculture of Ukraine, and the Delegation of the European Union to Ukraine.
Unlike previous editions, the fourth publication is not merely an updated list of recommendations but introduces a new format — a White Paper that offers a comprehensive rethinking of approaches to supporting frontline regions. The document was prepared ahead of the Ukraine Recovery Conference 2026 in Gdańsk and aligned with the conference’s key thematic priorities.
The central message of the White Paper is that frontline regions should be viewed not only as areas that have suffered the greatest losses, but also as strategic spaces of Ukraine’s economic resilience. It is in these regions that the preservation of production, jobs, logistics, energy resilience, the tax base, and the ability of communities to remain economically active is being determined on a daily basis.
The document proposes moving from fragmented measures towards a comprehensive policy framework built around three horizons for action: stabilise, retain, invest. This means first stabilising economic activity in frontline regions, then retaining people, businesses, and production chains, and ultimately creating conditions for investment, modernisation, and long-term development.
Key areas covered by the White Paper include:
establishing a multi-level architecture for war-risk coverage;
dedicated financial instruments for businesses operating in frontline regions;
support for logistics, infrastructure, and energy resilience;
improved access to financing, guarantees, insurance, and CAPEX support;
support for human capital, housing, education, veterans, internally displaced persons (IDPs), and women;
strengthening local project development capacity and business-community engagement;
launching place-based investment regimes, industrial parks, and manufacturing clusters;
integrating frontline regions into the broader recovery agenda and cooperation with international partners.
The Association emphasises that general recovery instruments do not always work effectively for frontline regions, as businesses operating there simultaneously face elevated security risks, higher logistics costs, limited access to insurance, labour shortages, damaged infrastructure, and increased administrative uncertainty.
For this reason, the document proposes applying a so-called “frontline test” to government, donor, and investment programmes. Such an approach would help assess whether these programmes adequately reflect the real operating conditions faced by businesses in regions exposed to heightened security risks.
The European Business Association hopes that the White Paper will serve as a practical contribution from the business community to the development of recovery policies, preparations for URC 2026, and Ukraine’s continued dialogue with international partners on supporting frontline regions.
The Association remains committed to contributing to the development of solutions aimed at preserving economic activity, supporting enterprises, and unlocking the recovery potential of Ukraine’s frontline regions.
The document has been updated to reflect the latest changes to state compensation programmes and business recovery financing mechanisms, as well as practical issues companies face when using these instruments.
One of the key updates in Version 4.0 concerns the programmes of the Export Credit Agency (ECA). In particular, the guide incorporates the changes introduced by Cabinet of Ministers Resolution No. 1157. Kyiv and Kyiv Oblast have now been added to the territories where businesses may be eligible for compensation for damaged or destroyed property. The list of property covered by the programme has also been updated, the mechanism has been extended to certain movable assets while in transit through high-risk territories, and documentation requirements have been simplified, with some information now verifiable by the ECA through state registers.
The opportunities for compensation of insurance premiums for war-risk insurance have also been expanded. The maximum amount of such compensation has been increased from UAH 3 million to UAH 5 million per year, while property for which a business has an insurable interest, including leased property, may now be insured under the programme.
The fourth edition also includes practical guidance based on the results of the EBA meeting with the Ministry of Economy and the ECA. In particular, it addresses whether previously submitted applications need to be resubmitted, how to add additional property, what types of property can actually be insured, how to confirm ownership and the fact of damage, how to track the status of an application, and which documents should be prepared for damage assessment.
Another important section covers new financing opportunities for medium-sized and large businesses. The guide incorporates Resolution No. 1156, which expanded the interest-rate compensation mechanism to recovery and development projects involving fuel and warehouse logistics infrastructure, processing industries and trade. For relevant loans, the state provides compensation of 5.5 percentage points of the interest rate, while the minimum loan amount is UAH 100 million, or UAH 30 million for frontline territories.
Thus, Version 4.0 makes the guide even more practical: alongside the procedures for documenting damage and using judicial and international mechanisms, businesses can find up-to-date compensation, insurance and recovery financing instruments, as well as practical answers on how to use them.
The European Business Association will continue to update the document in line with changes in legislation and the practical application of business support mechanisms.
The European Business Association presents the new edition of the Business Climate Note — an analytical overview of the key current challenges facing businesses, together with proposals for addressing them, developed based on the experience and expertise of the Association’s member companies.
As one of the largest business associations in Ukraine, the European Business Association regularly monitors the state of the business climate, investment sentiment and the key needs of companies. This document draws on the findings of surveys, analytical research and the practical experience of EBA member companies operating in Ukraine.
The recommendations set out in the document are structured around five strategic priorities:
Strengthening institutions and the rule of law through judicial reform, improving the practices of law enforcement agencies, strengthening the protection of property and corporate rights, ensuring a transparent sanctions policy, and enhancing the effectiveness of managing seized assets.
Creating a predictable investment environment by expanding access to finance, developing war risk insurance mechanisms, ensuring tax policy stability, simplifying customs procedures, and reducing excessive regulatory burdens.
Supporting economic recovery and competitiveness through reforms in the energy, transport, infrastructure, technical regulation, environmental policy and digital public services sectors, creating better conditions for business operations and investment.
Addressing human capital challenges by tackling labour shortages, modernising labour market policy, increasing workforce mobility, supporting pension reform, and expanding opportunities for professional skills development.
Advancing European integration through the systematic alignment of Ukrainian legislation with the EU acquis in key areas, facilitating the deeper integration of Ukrainian businesses into the European Union’s Single Market.
In addition to horizontal reforms, the document contains sector-specific recommendations for healthcare, clinical research, veterinary medicine, energy, logistics, environmental policy, agriculture, industry, retail, the extractive sector, technical regulation and other areas of the economy. Taken together, the proposed measures are designed to remove barriers to investment, strengthen economic resilience, and support Ukraine’s successful recovery and integration into the European Union.
The Business Climate Note reflects the consolidated position of European Business Association member companies and provides a practical roadmap for reforms that can strengthen Ukraine’s investment attractiveness, accelerate economic recovery, and support sustainable long-term economic growth.
We hope that the recommendations set out in the document will be useful to public authorities, international partners and the business community in shaping policies aimed at improving the business environment, stimulating investment, and accelerating Ukraine’s economic recovery.
Polish developer Grupa Mosty expects to secure financing for a 162 MW wind farm in southern Ukraine by the third quarter of 2027 and complete construction by the end of 2028, company executives told Ukraine Rebuild Newswire.
The Warsaw-based company plans to install 36 Vestas turbines, each with a capacity of 4.5 MW, at its Mayaki Wind Farm in the Odesa region. It expects the project to reach ready-to-build status in the first quarter of 2027.
Mosty secured a 162 MW allocation at a price of 7 euro cents per kilowatt-hour in Ukraine’s Sept. 30 renewable energy support auction, which attracted bids for more than 1.2 GW of wind capacity against a 700 MW quota.
The company’s allocation was the second-largest after state-owned Naftogaz, which secured 300 MW.
Mosty CFO Jacek Skrabacz told URN that his company is pursuing several financing structures but faces a limited pool of institutions willing to fund renewable energy projects in wartime Ukraine.
“At present, the pool of financing institutions willing to participate in renewable energy projects in Ukraine remains relatively limited,” Skrabacz said.
The company is seeking financial close in the second or third quarter of 2027. It did not identify prospective lenders, disclose the project’s investment cost or specify how it intends to insure against war risks.
Construction contracts under discussion
Mosty CEO Andrzej Michał Kowalik said the company is discussing contracts for civil works, electrical infrastructure and turbine installation with potential contractors.
“The execution of the relevant contracts is planned immediately following the signing of the turbine supply agreement,” Kowalik told URN.
Construction will include turbine foundations, crane hardstands, assembly areas and grid connection infrastructure. Subject to the turbine supply agreement and construction schedule, Mosty expects installation and commissioning to be completed by the end of 2028.
The company has been developing Mayaki since 2022. An environmental impact assessment conclusion was issued for the 162 MW project in August 2026, according to the Odesa district administration.
Battery energy storage
Mosty also plans to add battery energy storage after commissioning the wind farm to improve operational flexibility and optimize electricity use. It has not disclosed the proposed storage capacity.
Kowalik said the auction outcome would help attract financing, although the company’s support contract has not yet been shown as signed on the auction platform.
“An awarded contract would enhance the bankability of the project, strengthen confidence among potential lenders and investors,” he said.
The Mayaki project is being developed as a standalone investment. Separately, a Mosty-affiliated company has filed plans for a 900 MW South Dniester wind farm in Odesa region, according to an August environmental notice.
The company has not announced a construction timetable or financing arrangements for that larger development.
On 27 August 2026, the key provisions of Resolution of the Cabinet of Ministers of Ukraine No. 1051 dated 13 August 2026 “Certain issues of preparing public-private partnership projects and improving the public investment management process” (the Resolution No. 1051) entered into force. Resolution No. 1051 provides the secondary legislation needed to implement the new PPP model introduced by the Law of Ukraine “On Public-Private Partnership” No. 4510-IX.
Resolution No. 1051 approved the procedures for analysing the concept note and the effectiveness of implementing a PPP, introduced comprehensive changes to the public investment management system, and repealed the acts governing the previous state-private partnership analysis model.
New procedure for preparing PPP projects
For PPP projects, including concessions, the pre-investment stage now comprises: (i) a concept note prepared on the basis of a preliminary investment feasibility study; and (ii) a PPP feasibility study. The analysis of the concept note covers the strategic, economic, commercial, financial and managerial rationale, including a preliminary comparison of the project’s efficiency with and without the involvement of a private partner.
Projects with an expected value below the equivalent of EUR 5,538,000 are prepared under a single-stage PPP procedure, based on the concept note alone, without a separate PPP feasibility study. If a project was not classified as below-threshold at the concept-note stage, a subsequent reduction in its value does not change the applicable preparation procedure. For a below-threshold project involving state support from the state budget, the conclusion is agreed with the Ministry of Economy, with the involvement of the Ministry of Finance and the Ministry for Communities and Territories Development of Ukraine.
Engaging an advisor to prepare the concept note is mandatory if the project’s expected value exceeds the equivalent of EUR 10 million.
A negative conclusion on the use of the PPP model does not terminate the project itself: it can be continued as a public investment project from the investment feasibility study stage, using the materials already prepared.
PPP integrated into the public investment system
Special procedures apply to PPP projects, while the general procedure established by Resolution of the Cabinet of Ministers of Ukraine No. 527 applies only in expressly specified cases, in particular:
if the preliminary investment feasibility study indicates that a PPP is possible, the project, regardless of its value, is submitted for a sectoral (industry) assessment and, if the results are positive, is included in the relevant sectoral portfolio
for projects assessed before Resolution No. 1051 entered into force, the possibility of implementation on a PPP basis is additionally identified at the expert or sectoral assessment stage
a PPP project that requires budget financing to prepare the PPP feasibility study must be included in the relevant unified project portfolio in order to obtain such financing
Implementation, monitoring and DREAM
The procedure for implementing public investment projects and programmes has been set out in a new wording. It sets out in detail the readiness-for-implementation criteria, the roles of the initiator and the component executor, the reporting calendar, the performance evaluation, and the procedure for amending indicators during implementation.
DREAM becomes the digital basis for preparing and monitoring public investment and PPP projects. The necessary technical solutions must be rolled out within six months for public investment projects and no later than 1 April 2027 for PPPs (concessions).
Transitional rules for regions and communities
In 2026, local investment councils may include in unified project portfolios projects and programmes with confirmed sources of financing, provided they are consistent with the public investment areas set out in the medium-term plan of the relevant level. The Resolution also provides regional and local authorities with the technical ability to independently define such areas on the basis of strategic planning documents.
Practical implications
Resolution No. 1051 makes the new PPP model operational and links PPP preparation to the entire public investment management cycle. Initiators and public partners should, from the very outset, coordinate the preparation of the concept note, the sectoral assessment, the project’s inclusion in the portfolios, the need for budget financing, and the entry of data into DREAM.
Ukraine has adopted a new, simplified procedure for the export of military goods, dual-use goods and defence technology to partner countries. For Norwegian defence companies wishing to procure Ukrainian drone technology, enter into co-production agreements or licence Ukrainian defence solutions, this presents new opportunities – but also challenging regulatory conditions. For investors in the Ukrainian defence industry, export capacity is a key value driver that now has a legal framework. This article reviews the main features of the new regulations and highlights the practical implications for Norwegian stakeholders.
Ukraine has implemented a number of changes to its regulatory framework for the defence industry, both to strengthen the sector commercially and to facilitate cooperation with international players. The latest development is the adoption of Resolution No. 875 by the Cabinet of Ministers of Ukraine (CMU), which introduces a simplified procedure for the export of military goods, dual-use goods and related technologies from Ukraine. The resolution came into force upon its publication on 8 July 2026.
Whilst Norwegian defence companies have traditionally been suppliers to Ukraine, the current cooperation also makes Norway a buyer and co-production partner for Ukrainian defence technology, particularly in the fields of drones and electronic warfare. It is the Ukrainian exporter who must obtain authorisation under these regulations, but the timelines, conditions and risks involved in the Ukrainian authorisation process directly affect Norwegian purchasers’ ability to receive goods and technology.
The procedure is temporary. It applies expressly for the duration of Ukraine’s state of emergency (martial law), which has been in force since Russia’s full-scale invasion in February 2022, and for six months following its expiry or revocation. Industry players and investors relying on this regulatory framework must therefore be mindful of the uncertainty regarding whether, and if so how, the regime will be continued following a future peace settlement.
The new procedure must be viewed in the light of previously introduced modernisations to Ukraine’s regulatory framework, including the so-called ‘Drone Deal’ initiative and the ‘Defence City’ scheme – most specifically in the context that the new, simplified processes apply to countries that have been pre-approved by Ukraine’s Ministry of Foreign Affairs under a so-called Drone Deal agreement.
Who can use the new procedure
The new simplified procedure can be used by two categories of importers, namely:
By importers from the countries that are parties to bilateral agreements with Ukraine entered into under the “Drone Deal” framework; and
By importers from any other country included into a list of eligible countries as approved on a quarterly basis jointly by the Ukrainian MFA and the special governmental commission on the military technological cooperation and export control policy. The MFA will take into account positions and views of the Ukrainian Ministry of Defence, State Security Service of Ukraine, and the Foreign Intelligence Service of Ukraine. So far no such list has been approved and/or published, but this is to be expected some three weeks after the introduction of the new procedure.
The “Drone Deal” initiative is a series of bilateral agreements between Ukraine and selected partner countries, which facilitate cooperation relating to the development, production, exchange of technology and use of military technologies and products – not limited to drone technology, despite the name. According to open sources , as of July 2026, Ukraine has entered into formal ‘Drone Deal’ agreements with, amongst others, Latvia, Lithuania, the Netherlands, Estonia, Denmark, Saudi Arabia, the United Arab Emirates and Qatar.
Norway has not been formally announced as a party to such an agreement, but in connection with the signing of the declaration of cooperation between Støre and Zelenskyy in Oslo on 14 April 2026, Zelenskyy stated that this was a “first step towards a Drone Deal”. Later that same month, Norway and Ukraine signed a framework agreement under the “Build with Ukraine” initiative, focusing on the production of Ukrainian drones in Norway.
Whether these agreements will be deemed sufficient under Article 5 of the resolution remains unclear, but given the close cooperation between Norway and Ukraine, it is reasonable to expect that Norway will be included on the MFA list.
The ‘Defence City’ scheme is a purely domestic Ukrainian scheme (introduced by Laws Nos. 13420 and 13421, in force from January 2026) which grants eligible Ukrainian defence companies tax benefits and simplified procedures. ‘Defence City’ status is not a prerequisite for using the simplified procedure set out in Resolution No. 875 – the procedure is open to all registered Ukrainian exporters who export to ‘Drone Deal’ partner countries.
Defence City is nevertheless relevant to Norwegian stakeholders in two respects: (i) Ukrainian suppliers with Defence City status may enjoy additional benefits that make them more competitive, and (ii) investors in the Ukrainian defence industry should investigate whether the target company holds or qualifies for Defence City status, as this affects the company’s tax position and overall valuation.
Which goods are covered by the new procedure
The new regulations apply alongside the existing regulations on export licences and cover both military goods and dual-use goods. Military goods are products specifically developed for military purposes, such as weapon systems, ammunition and military equipment. Dual-use goods are products that have civilian applications but can also be used for military purposes, such as certain types of electronics, software, sensors and navigation technology. The procedure also covers technology transfers and transactions relating to intangible assets. A minimum value of UAH 15 million has been set for exports of finished defence products, which corresponds to approximately NOK 3.4 million as at today’s date.
Components and accessories (“складові частини” and “комплектувальні вироби”) are exempt from the value threshold and are subject to the procedure regardless of the contract value.
What is the essence of the simplified procedure?
Processing time and deemed approval
SECSU (State Export Control Service of Ukraine), Ukraine’s export control authority, must make a decision on an export licence within 30 calendar days of receiving an application, down from 90 days under the standard regulations. During this period, parallel consultations take place: the Ministry of Defence has 20 calendar days (10 days for technology exports) and the SBU, the Foreign Intelligence Service and the Ministry of Defence’s intelligence agency have 15 calendar days to provide their assessment. If these bodies do not respond within the deadlines, their approval is deemed to have been given by tacit consent (‘deemed approval’). Note that this rule on deemed approval does not apply to SECSU itself – SECSU must actively approve or reject the application within the 30-day deadline.
Implementation of the procedure
The Ukrainian Ministry of Foreign Affairs is required to maintain a list of countries approved for the procedure, whilst the Ministry of Defence maintains a list of critical goods and technologies where exports could harm Ukraine’s defence capabilities. Both lists are updated quarterly and approved by the Inter-Ministerial Commission for Military-Technical Cooperation and Export Control. Exports to countries that do not qualify, of critical technology or which otherwise raise national security concerns, fall outside the scope of the simplified procedure and will require further scrutiny in accordance with the underlying export control regulations.
Although the procedure has been simplified, several control mechanisms remain in place: mandatory consultation with the SBU and the intelligence services, quarterly updates to the list of critical goods, requirements for state guarantees from the importing country, and the possibility of cancellation with 72 hours’ notice.
Norwegian operators should nevertheless carry out their own integrity and due diligence assessments of Ukrainian counterparties, in line with good practice for defence sector transactions and Norway’s obligations under the OECD Anti-Bribery Convention.
Payment mechanisms and additional charges on re-export
The new procedure also includes fees payable to the Ukrainian authorities in connection with the export of covered goods and technology.
When exporting stand-alone (finished) goods, whether military or dual-use, a fee equivalent to 20% of the value of the goods is payable.
For components and accessories, a fee equivalent to 30% of the value of the goods is payable.
When exporting technology, not goods, a fee equivalent to 20% of the value is payable – where the value is to be set at either the actual selling price over the last six months or, where this is not possible, on a calculated basis.
In the case of re-export to third countries of goods produced using technology transferred to foreign entities, a fee of 20% of the value of the goods is payable.
The duties are due at the time of application, and proof of payment must be attached to the application. The resolution does not provide for the refund of fees if an export licence is refused – which entails a not insignificant commercial risk, particularly given that the Ministry of Defence may invoke priority for its own defence needs as grounds for refusal (see section 4.4 below).
State guarantees from the importing country
An application for an export licence must be supported by a guarantee document from the authorities of the importing country. In the case of technology transfers, the guarantee must, amongst other things, cover that (i) the technology is provided solely as a right of use, not as a transfer of intellectual property rights, (ii) re-export, sale or temporary export requires prior approval from SECSU, (iii) production shall only take place in the quantities and on the terms set out in the contract; and (iv) all upgrades, improvements or further developments must be reported and transferred back to Ukraine.
For Norwegian buyers, the practical challenge will be to secure such guarantees from the Norwegian government. This requires the involvement of the Ministry of Defence and, where appropriate, the Ministry of Foreign Affairs, and should be treated as a prerequisite for the transaction – not a formality that can be sorted out afterwards. The obligation to report on improvements is particularly relevant for co-production and licence agreements, as in practice it means that Norwegian partners must share the results of their own R&D based on Ukrainian technology.
Due diligence requirements for foreign operators
The procedure imposes strict requirements on foreign importers, end-users, intermediaries and other parties involved, in terms of identity, ownership and end-use.
Norwegian companies and funds should therefore expect that SECSU and Ukrainian exporters will require comprehensive KYC documentation, information on beneficial ownership and sanctions screening, including confirmation that no part of the ownership chain is linked to Russian or Belarusian persons or entities subject to sanctions. A thorough internal review should be carried out before negotiations commence.
Suspension and cancellation of licences
The regulatory risk does not cease upon the issue of an export licence. Licences may be suspended in the event of, amongst other things: (i) breach of the foreign importer’s obligations under government defence contracts, (ii) failure to pay duties, or (iii) notification from the Ministry of Defence of its intention to procure the goods in question itself (suspension limited to 30 days).
Furthermore, licences may be cancelled in the event of, amongst other things: incorrect information in the application, sanctions against any of the parties, breach of the licence conditions, breach of the importing country’s state guarantees, or intelligence information regarding the risk of deviant end-use or unauthorised re-export.
Contracts with Ukrainian suppliers should therefore address the consequences of suspension and cancellation, including payment milestones, delivery delays, the right of termination and limitations of liability.
Practical recommendations for Norwegian stakeholders
Norwegian defence companies and investors considering transactions relating to Ukrainian defence technology should, amongst other things, consider the following measures:
Initiate dialogue with the Norwegian authorities at an early stage. The requirement for state guarantees from the importing country cannot be met by the private buyer alone. Initiate dialogue with the Ministry of Defence and, where appropriate, the Ministry of Foreign Affairs at an early stage.
Carry out an internal KYC assessment. Confirm that the entire ownership chain is free from any links to Russian or Belarusian individuals. For funds: also assess whether the LP base, GP structure or other partners contain exposure that could create challenges.
Assess the commercial implications of the fee structure. The fees of 20-30% of the contract value, which are due at the time of application with no statutory right to a refund in the event of rejection, must be factored into pricing models and margin calculations from the outset. In the case of co-production or licence agreements, the 20% fee on re-export to third countries must also be taken into account.
Incorporate regulatory risk into the contract. Contracts with Ukrainian suppliers should address the risk of delays, suspension, refusal and cancellation of export licences, as well as Ukraine’s priority right of procurement.
For investors: carry out targeted due diligence. Investigate whether the target company has ‘Defence City’ status, existing export licences, any breaches under government defence contracts, and exposure to the list of critical goods. Also assess how the time limit on the procedure affects the value of export-driven revenue.
Carry out integrity and due diligence assessments. Norwegian entities have independent obligations under Sections 387-389 of the Penal Code and the OECD Anti-Bribery Convention. Carry out your own integrity due diligence on Ukrainian counterparties, irrespective of the Ukrainian authorities’ assessments.
The new export regime represents a significant development for Norwegian-Ukrainian defence cooperation. The framework creates genuine commercial opportunities, particularly in the fields of drones, electronic warfare and related technologies. At the same time, the procedure is conditional and subject to controls – it is not a free-trade regime. Norwegian operators who engage at an early stage with both Ukrainian and Norwegian authorities, carry out thorough internal assessments and build appropriate risk allocation into their contracts will be best positioned to benefit from this new framework.
