Ukraine’s MoD and Economic Security Bureau to vet defence procurement before contracts are signed

Ukraine’s Ministry of Defence and the Economic Security Bureau (ESBU) have agreed to cooperate to prevent corruption and abuse in defence procurement. Deputy Defence Minister Mstyslav Banik and ESBU First Deputy Director Taras Shcherbai signed the memorandum.

The ministry will share data on questionable procurements with the ESBU, which will check prices and the beneficial owners of bidding companies before contracts are signed. The aim is to identify financial and corruption risks early and prevent inefficient or unlawful spending of budget funds, the Ministry of Defence said.

Practical cooperation between the Ministry of Defence and BES will cover three areas:

Verifying prices and suppliers. At the Defence Ministry’s request, BEB analysts will examine market pricing, verify the beneficial owners of companies participating in and winning procurement procedures, and assess potential risks. BEB said it is investigating criminal cases involving inflated prices in defence procurement and supplier abuses. “Our task is to identify such risks before contracts are concluded,” Taras Shcherbai said.

Rapid data exchange. The Ministry of Defence will provide BES specialists with the documents and information required to assess risks promptly.

Improving risk-management mechanisms. Based on joint analysis, the agencies will develop systemic changes to the planning, conduct and implementation of defence procurement. This is intended to improve the efficient use of funds and help prevent shadow schemes.

The Defence Ministry expects that combining its management oversight with BEB’s analytical expertise will make procurement more transparent and the use of the defence budget more accountable and efficient.