On October 22, the Cabinet of Ministers of Ukraine adopted decisions that open up opportunities for private business to invest in the construction of protected underground production facilities for the defense-industrial complex. At the same time, the government introduced a mechanism for preferential import of components for weapons, the production of which is financed by international partners.
This was announced by Prime Minister of Ukraine Serhiy Koretskyi. Details of the new construction rules were also released by the Ministry of Defense.
Private investors will be able to build underground production facilities
From now on, customers for the construction of protected production facilities can be not only enterprises of the defense-industrial complex, but also private companies, developers and investors.
They will be able to finance the construction of underground production premises with their own or borrowed funds, and after the completion of construction, transfer these facilities to weapons manufacturers for ownership, lease or use.
To implement this mechanism, the government amended Resolution No. 1494, which regulates simplified construction of defense industry facilities.
According to the Ministry of Defense, the construction deadlines, terms of use of the premises and the procedure for their transfer will be determined by agreements between investors and defense enterprises.
If only part of the constructed facility is transferred to a weapons manufacturer, it must constitute at least 25% of its total area. These premises must be suitable for locating, relocating or expanding the production of defense products.
The new mechanism will be available to developers who enter into appropriate agreements, in particular with residents of the special Defence City regime, executors of state defense contracts, and enterprises recognised by the Ministry of Defense as critically important for the defense-industrial complex.
The government expects that attracting private investment will allow for faster creation of protected production areas and relocation of enterprises to safer conditions against the backdrop of intensified Russian attacks.
At the same time, the new model should reduce the need for direct budget financing of such construction, since investors will be able to receive income from their subsequent lease or sale.
Import of equipment for weapons manufacturers simplified
The second decision concerns customs clearance of components and equipment necessary for the production of weapons with funds from Ukraine's international partners.
According to the Prime Minister, the government introduced a mechanism allowing the import of such goods without paying import duty and value added tax, if they are intended for the needs of the Ministry of Defense or enterprises of the defense-industrial complex.
Thus, the preferential conditions will apply to defined categories of defense imports, not to all equipment purchased by private enterprises.
In addition, the government simplified the procedure for inspection and customs clearance of relevant cargo through the "single window" system. As Koretskyi noted, this should reduce the time required for the necessary procedures several times.
For weapons manufacturers, simplification of customs clearance may reduce delays in the supply of imported components and speed up the fulfilment of contracts financed by foreign partners.
It is worth noting that on September 3, the Verkhovna Rada passed legislative changes on tax and customs benefits for defense procurement, in particular regardless of their source of funding. The current government decision specifies the mechanism for their application and simplifies the clearance of relevant cargo.
Earlier, on September 23, the Ministry of Defense reported on the preparation of rules for involving private investors in the construction of underground defense enterprises. At that time, it was about draft regulatory changes. The decision of October 22 means the transition from the preparation of the mechanism to its government approval.
Based on materials: Serhiy Koretskyi, Ministry of Defense of Ukraine
