Rada passes law on arms purchase abroad without intermediaries

A total of 236 MPs voted for the approval of a respective draft law, No. 9122, at a parliament meeting on Thursday, an Ukrinform correspondent said.

The law amends the legislation in order to empower the Defense Ministry to receive defense products directly, without the mediation of arms exporters of the Ukroboronprom State Concern.

The law stipulates that imported products, works and services for military purposes for the needs of the Ukrainian Armed Forces and other military formations may be purchased from foreign legal entities through the signing of a contract between a state customer and foreign or domestic producers and suppliers of products, works and services for military purposes if such a state customer is vested, in line with the procedure established by law, with powers to import military goods and the goods that contain information constituting a state secret.

If defense products are procured from a foreign legal entity - the manufacturer or supplier of such products, works and services – for the amount exceeding five million euros, the obligatory condition for such procurement is the receipt by Ukraine of respective compensation.

Ukraine receives compensation by concluding and implementing an offset agreement, which is a foreign economic agreement (contract) concluded in writing between an offset beneficiary and a foreign legal entity.

According to the law, the offset beneficiary receiving the compensation may be a state customer or another state-owned entity, which is selected by the offset commission upon the recommendation of the state customer.

The procedure for concluding offset agreements and types of compensation are determined by the Cabinet of Ministers of Ukraine.

To resolve issues related to the organization and coordination of activities on conducting negotiations with a foreign legal entity on the receipt of compensation, conclusion and implementation of offset agreements by Ukraine, the Cabinet of Ministers of Ukraine establishes a permanent offset commission consisting of representatives of state customers, other state bodies, enterprises, institutions, and organizations.

The clause on the offset commission is approved by the Cabinet of Ministers of Ukraine.

The information, organizational and logistical support of the offset commission is provided by the central executive body determined by the Cabinet of Ministers of Ukraine.

The law states that "offset agreements may not be signed during a special period, the introduction of martial law, the implementation of measures to ensure national security and defense, the repression and deterrence of armed aggression of the Russian Federation in Donetsk and Luhansk regions. The decision to conclude an offset agreement is made by the Cabinet of Ministers of Ukraine upon the recommendation of the state customer."

This law comes into force the day after its publication.