Ukraine introduces a special mechanism for arms exports

On 1 July 2026, the Cabinet of Ministers of Ukraine approved the Procedure for International Transfers of Military and Dual-Use Goods for the Period of the Legal Regime of Martial Law in Ukraine (the “Procedure”).

The key innovation is a simplified export regime for states with which Ukraine has concluded agreements on the production, supply and joint development of unmanned systems and other defence technologies (the “Drone Deals”). In particular, such exports may proceed without the approval of the Interdepartmental Commission on the Policy of Military-Technical Cooperation and Export Control (the “Interdepartmental Commission”).

Scope of application

The Procedure applies to goods and technologies that have been adopted for service or codified by the Ministry of Defence as an item of supply, namely:

• military goods from the List of Military Goods (Resolution of the Cabinet of Ministers of Ukraine No. 1807);
• dual-use goods from the Unified List of Dual-Use Goods (Resolution of the Cabinet of Ministers of Ukraine No. 86), which can be used for the development/production of military goods;
• goods not included in these lists, in cases set out in Art. 10 of the Law of Ukraine “On State Control over International Transfers of Military and Dual-Use Goods”;
• military and dual-use technologies.

The minimum contract value threshold for applying the mechanism under the Procedure is UAH 15 million (approx. EUR 300,000). The threshold does not apply to components and parts, which may be exported under the Procedure regardless of the contract value.

Importantly, an export permit from the State Service for Export Control of Ukraine (the “SSECU”) for military and dual-use goods is always required, regardless of the contract value. The threshold determines only which procedure applies: contracts above the threshold follow the simplified procedure under the Procedure, while contracts below it follow the general procedure. Components and parts follow the simplified procedure regardless of the contract value.

Key requirement: confirmation of codification

The Procedure introduces a significant new requirement: the goods must be formally adopted for service or codified by the Ministry of Defence as an item of supply. Otherwise, the special mechanism does not apply, and exports must follow the standard, longer procedure.

A related requirement is prior registration of the exporter with the SSECU as an entity engaged in international transfers. Registration should reflect the specifics of the particular product: the more precisely the product is identified at registration, the faster the subsequent review of the application. According to SSECU officials, product identification issues are the most common ground for comments during application review.

Simplified regime for Drone Deal states

The simplified regime, without the approval of the Interdepartmental Commission, is expressly available for exports to countries that have concluded Drone Deals with Ukraine. However, in practice, the mechanism can only be launched once the Interdepartmental Commission approves the List of States eligible for such transfers.

That said, even for Drone Deal states, not all categories of weapons will qualify for the simplified regime. Additional review by the Interdepartmental Commission is required where:

• the product or technology is included in the List of Critical Goods;
• the goods are subject to restrictions arising from Ukraine’s international obligations (in particular, with regard to missile weapons);
• objections are raised during interagency coordination by the Security Service of Ukraine, the Foreign Intelligence Service or the intelligence agency of the Ministry of Defence.

This does not amount to an automatic refusal, but it adds a procedural step and may delay the review of the application.

Which states have already concluded a Drone Deal?

As of 8 July 2026, Ukraine has concluded a Drone Deal with nine states: Saudi Arabia, the United Arab Emirates, Qatar, Azerbaijan, Latvia, Lithuania, Estonia, the Netherlands, and Denmark. Three of these agreements – with Estonia, the Netherlands and Denmark – were signed on 7 July on the sidelines of the NATO summit in Ankara.

According to official statements, about 20 more states are at various stages of negotiations. Agreements with Germany, Norway, Finland and Canada have been publicly confirmed as forthcoming.

Permit Procedure

The SSECU granting period is 30 calendar days from submission of the complete set of documents. Within these 30 days, approval by the Ministry of Defence (up to 20 days) and interagency coordination with the Security Service of Ukraine, the Foreign Intelligence Service and the intelligence agency of the Ministry of Defence (up to 15 days) run in parallel. If these bodies do not respond within the established time frame, approval is deemed granted.

The SSECU emphasises that each application is reviewed individually, as there is no standardised approach, so the scope of comments may vary depending on the specifics of the product and the counterparty.

State guarantees

When transferring technology, the exporter must obtain guarantees from the importing state regarding:

• use of the technology exclusively within the limits of the granted right of use, without alienation of intellectual property rights or sale of the technology (except for agreed cases);
• further transfer, re-export or sale of manufactured goods only with the prior written permission of the authorised Ukrainian body;
• production of goods using the technology strictly within the volumes set out in the agreement on the right of use;
• transfer to Ukraine of information on any modifications or improvements of goods manufactured using the transferred technology.

State guarantees are also required that the goods will not be transferred to another end user without the appropriate permission, together with confirmation that all participants in the transfer chain have been checked – not only the direct buyer, but also intermediaries.

This raises the practical question about the Ukrainian manufacturer’s responsibility for the subsequent transfers of the goods. The SSECU’s position is that where a foreign counterparty makes an unauthorised transfer, and the Ukrainian supplier did not know and could not have known about it, liability lies with the foreign counterparty before the authorities of the relevant jurisdiction. As part of monitoring compliance with state guarantees, the SSECU may require an end-use check. However, if the supplier becomes aware of the violation, even after the goods have been transferred, it must immediately notify the SSECU, the Security Service of Ukraine and other relevant authorities.

Permit Issuance Fee

The Procedure provides for differentiated payment for the issuance of a permit:

• 20% of the value of the goods – for exports of finished military and dual-use goods and technologies, and for re-exports to third countries of goods manufactured using transferred technologies;
• 30% – for the export of components.

In practice, the proof of payment must be submitted together with the application. Without it, the SSECU will not accept the application for review.

For goods manufactured using technology transferred by Ukraine, the Procedure establishes a separate valuation mechanism. The value is based not on the commercial contract price but on the price at which government defence customers procure similar goods. If no such procurement has taken place within the last six months, the value is determined based on an expert opinion or a property valuation report. The Procedure does not specify whether the same valuation mechanism applies to calculating the fee base for exports of finished goods or components produced without the transferred technology – this point requires clarification from the SSECU.

Other practical details

SSECU officials expect that training services may later be added to the Procedure as a separate category. For now, such services are treated as associated with the goods rather than as a separate object of regulation.

For taking goods abroad for exhibitions, the SSECU announces a simplification of the procedure: coordination with other authorities will be notification-based rather than permission-based.

Conclusions

The Procedure gives Ukrainian defence industry producers long-awaited clarity on the rules for entering international markets, reducing the application review period from 90 to 30 days and opening up the possibility of exporting to Drone Deal states without review by the Interdepartmental Commission. At the same time, the practical launch of the mechanism depends on several further steps – official approval of the List of Drone Deal States, the List of Critical Goods, and the provision of the necessary clarifications from the SSECU, so in the near future it is worth closely monitoring the updates in legal regulation.

Companies planning to use the new mechanism should in advance:

• confirm the codification of the goods and register as an entity engaged in international transfers;
• prepare documentary evidence of the verification of the counterparty and the entire transfer chain;
• estimate the financial burden of the permit payment (20-30% depending on the type of goods) within the transaction structure with the foreign counterparty.

Sayenko Kharenko team is ready to support you at every stage – from registration as an entity engaged in international transfers and structuring contracts with foreign counterparties to obtaining the SSECU permit.