Ukraine Simplifies Defence Technology Exports: What UK Stakeholders Need to Know

Ukraine has shortened the approval route for certain exports of military goods, dual-use items and defence technology. For UK companies, the change may make licensed production, technology acquisition and selected procurement projects easier to schedule. It also helps investors test a Ukrainian defence company’s capacity to earn foreign revenue.

The reform does not create open access to Ukrainian defence technology. Country eligibility, Ukrainian defence needs, state guarantees, end-use controls and charges of 20–30% can still determine whether a transaction proceeds. UK rules may add a separate layer of licensing, sanctions, investment-screening and import requirements.

Current as of 3 August 2026, this article explains what Resolution No. 875 changes and what UK stakeholders should verify before committing capital.

What changed on 8 July 2026?

Resolution No. 875, adopted on 1 July and effective from 8 July 2026, introduced a special procedure for specified international transfers of military and dual-use goods. It operates during martial law in Ukraine and for six months after martial law ends or is cancelled.

The commercial rationale is substantial. Politico reported that Ukraine’s defence industry had developed an estimated annual production capacity of $35–55 billion, while 40–70% could remain unused because domestic procurement funding could not absorb the available output. These estimates explain the case for controlled exports but should not be treated as an audited market valuation.

Under the general framework, an export-permit decision involving interagency review may take up to 90 days. The new route gives the State Service of Export Control of Ukraine 30 calendar days to approve or refuse a complete application. The Ukrainian exporter applies, but the UK customer remains exposed to the timetable, cost and conditions.

UK–Ukraine cooperation already extends beyond deliveries of British equipment. The governments’ March 2026 defence-industrial declaration covers joint production, research and connected supply chains. Licensed UK production of the Ukrainian-designed Octopus interceptor is one example.

Resolution No. 875 supplies a Ukrainian licensing route for some projects of this kind. It does not guarantee that every project, product or partner will qualify.

Is the United Kingdom eligible for the simplified procedure?

This should be the first question in any UK transaction.

The streamlined route without individual review by the Interagency Commission requires two country-level conditions. The destination must have a treaty, memorandum or other bilateral document with Ukraine covering production, supply, joint development, technology exchange or use of unmanned systems or other defence products. It must also appear on the quarterly country list prepared by Ukraine’s Ministry of Foreign Affairs and approved through the export-control process. These are cumulative operational checks, not alternative routes. The bilateral document does not need to carry the name “Drone Deal”.

The 100-Year Partnership, technology-sharing arrangements and the March 2026 declaration may be relevant to the qualifying-document analysis. However, public materials reviewed as of 3 August 2026 do not confirm that Ukrainian authorities treat any of them as a Drone Deal or that the UK appears on the operative quarterly list.

The Ukrainian exporter should obtain confirmation from the State Service of Export Control and the Ministry of Foreign Affairs before the parties rely on the simplified route or fix delivery and payment commitments.

An application involving a country without a qualifying bilateral document may still be referred to the Interagency Commission in specified cases. The parties should not assume that such an application will follow the same approval path or timetable.

Which goods and technologies can qualify?

The procedure is not a general permission to export defence products. It covers defined transfers, including:

• military goods on Ukraine’s controlled list that have been formally accepted into service or codified as supply items;
• listed dual-use goods that can support military products accepted into service or codified;
• certain unlisted goods subject to Ukraine’s catch-all control and the same acceptance or codification condition;
• technology used to develop, produce or operate qualifying goods; and
• applications concerning onward export to third countries of products made with technology transferred under the procedure.

The special route generally requires finished goods worth at least UAH 15 million. Components and parts have no minimum. Lower-value finished goods remain subject to the ordinary rules where export control applies.

The Ministry of Defence also maintains a list of goods and technologies regarded as critical to Ukraine’s defence needs. Items on that list may fall outside the simplified route or face further review. Product classification, codification and critical-list exposure should be checked before the parties rely on the 30-day timetable.

The exporter must also hold the registrations and authority needed for the transfer. An overseas customer does not cure a missing authorisation.

How the 30-day review works

The shorter timetable is the main procedural change, but it contains several stages.

The State Service of Export Control has three working days to send the application to the Ministry of Defence. The Ministry has 20 calendar days to respond, or ten for technology.

The Security Service of Ukraine, the Foreign Intelligence Service and the Ministry of Defence intelligence body normally have 15 calendar days to respond. If one of those consulted bodies misses its deadline, the transfer is treated as approved by that body through tacit consent.

Tacit consent does not issue the export permit. The State Service of Export Control must still make an express decision within the overall 30-day period. Applications involving a non-eligible destination, critical technology or a material security concern can receive additional scrutiny under the wider export-control framework.

The review period is not the full deal timetable. Classification, application preparation, the importing-state document and authority queries take additional time. A contract should not promise delivery 30 days after signature merely because the regulator has a 30-day decision period.

The statutory deadline also does not remove execution risk. Ukrainian defence-industry representatives told Politico that the State Service of Export Control could face a capacity bottleneck if several hundred manufacturers apply at the same time. This concern does not change the 30-day legal limit, but UK parties should use realistic long-stop dates and avoid linking payment or delivery obligations to an assumed permit date.

The 20–30% charges can change the economics

Resolution No. 875 amended the charges for issuing permits under the special procedure. They are administrative-service charges, not customs duties.

The applicable amounts are:

• 20% of the value of finished military or dual-use goods;
• 30% of the value of components and parts;
• 20% of the calculated value for a technology transfer; and
• 20% of the value of products sent to a third country after being made with technology transferred under the procedure.

Technology valuation is not simply the negotiated licence price. It uses authorised production quantity and prices paid by Ukrainian state defence customers. If no relevant procurement occurred in the previous six months, an authorised expert opinion or valuation report determines expected value.

Proof of payment accompanies the application. The resolution does not specify refund treatment after refusal. Parties should confirm it with the State Service of Export Control and allocate the risk contractually.

The exporter may pass the cost through in pricing. UK buyers should model it when comparing licensed production with a product purchase. The 20% onward-export charge can also affect plans to supply allies from a UK facility.

A private buyer cannot provide the required state guarantee alone

The permit application must include a guarantee document from the importing state. Depending on the transaction, the required evidence may include an international import certificate or another government-backed assurance covering the importer, end user and stated use.

For a technology transfer under Resolution No. 875, the importing-state guarantee must cover the following conditions:

• the recipient obtains a right to use the technology rather than ownership, unless an approved exception applies;
• further transfer, re-export, sale or temporary export of the technology, related documentation or products made with it will occur only within the approved conditions and, where required, with prior written consent from the State Service of Export Control of Ukraine;
• production stays within the quantities and terms agreed in the licence or transfer contract; and
• Ukraine receives information, documentation, materials and other results relating to modifications, upgrades, adaptations, software changes or further development of products made with the transferred technology.

These obligations go beyond a corporate end-user certificate. A UK company cannot issue a sovereign assurance. It should establish early which UK authority and document can satisfy Ukraine and what evidence will be required.

The provision requires information, documentation, materials and other results of modifications to be provided to Ukraine. It does not expressly assign ownership of all newly developed intellectual property. The licence should therefore define background and newly developed IP, access, confidentiality and permitted use consistently with the state guarantee.

Ukrainian approval does not replace UK controls

Resolution No. 875 governs the Ukrainian side of the transfer. UK parties must run a separate analysis.

First, an import licence may be needed for firearms, ammunition and other restricted items. The item, route and user determine the steps.

Second, UK export controls become relevant when controlled military goods, software or technology later leave the UK. Official UK guidance states that controlled technology can include blueprints, diagrams, manuals and information sent electronically. Certain brokering, supply and delivery arrangements between overseas countries may also require a trade-control licence. A Ukrainian permit does not authorise a later export from Britain.

Third, sanctions screening must extend beyond names. UK restrictions can reach an entity owned or controlled by a designated person even if the entity is unlisted. Government guidance covers shares, voting rights, board appointments and factual control. UK buyers should conduct third-party due diligence on the exporter, intermediaries, end users and material suppliers, then rescreen them during the contract.

Fourth, the Bribery Act 2010 includes a corporate offence of failing to prevent bribery by associated persons. Procurement agents, local advisers, customs intermediaries and success fees require documented review.

Finally, an acquisition may require National Security and Investment Act analysis where the target has sufficient UK connection. Defence and military or dual-use activities can trigger mandatory notification, but a Ukrainian target is not automatically in scope.

The UK and Ukrainian workstreams should form one regulatory compliance risk management plan. Running them in sequence can expose the parties to a Ukrainian charge or contractual commitment before the UK position is clear.

A permit can still be suspended or cancelled

Regulatory risk continues after approval.

The State Service of Export Control may suspend a permit if the Ukrainian exporter has failed to perform a Ukrainian defence-procurement contract, if a required charge has not been paid, or if a Ukrainian defence customer states an intention to purchase the relevant goods. A suspension based on planned domestic procurement is limited to 30 calendar days.

Cancellation grounds include false application data, sanctions imposed on a relevant party, breach of permit conditions, breach of the importing state’s guarantees, and failure by the exporter to honour written supply guarantees to Ukraine. Intelligence indicating diversion, unauthorised re-export, third-party transfer or use against Ukraine’s security, defence interests or international obligations can also lead to cancellation.

Resolution No. 875 does not give the exporter a general 72-hour cancellation notice. The 72-hour provision concerns the period in which the Interagency Commission may become involved after authorities submit specified risk information for a cancellation review.

Contracts should therefore cover permit cooperation, payment milestones, long-stop dates, suspension, refusal and cancellation. They should also allocate the Ukrainian charge, state-guarantee costs, storage expenses, delayed delivery, termination rights and liability. End-use and onward-transfer clauses need to remain effective after delivery.

What investors should test beyond the permit

Export capacity can support a Ukrainian defence company’s valuation, but a forecast based on the new procedure needs evidence. Investors should verify current exporter authority, relevant product codification, previous permit history, performance under Ukrainian defence contracts, IP title, production capacity and exposure to the critical-goods list. They should also test whether margins remain viable after the new charges and whether projected foreign revenue depends on one eligible country.

Defence City status is relevant but separate. Ukraine launched the domestic special regime in January 2026 to provide qualifying manufacturers with tax and customs benefits, protection of sensitive registry data, relocation assistance and enhanced facility protection. A company does not need Defence City residency to use Resolution No. 875.

Residency may affect tax, cash flow, resilience and access to public records. Verify it from primary evidence and test continuing compliance. It does not replace defence-sector due diligence on founders, ownership, connected parties, supply chains and capabilities.

Financial models should also reflect the temporary nature of Resolution No. 875. The procedure lasts through martial law and six months beyond it. Investors should test a scenario in which the 30-day route changes, the UK is absent from the eligible list, or a product is added to Ukraine’s critical list.

A practical checklist for UK stakeholders

Before signing a procurement, licence, co-production or investment agreement, a UK team should complete the following steps:

1. Confirm UK eligibility under the current Ukrainian country list and keep written evidence of the position.
2. Classify the goods, software and technology; confirm codification, the UAH 15 million threshold where relevant and any critical-list restriction.
3. Verify that the Ukrainian company holds the registrations and authority needed to act as exporter.
4. Identify the government guarantee or import certificate required from the UK and open the authority dialogue early.
5. Calculate the Ukrainian permit charge using the correct valuation basis, including the potential charge on third-country sales.
6. Map UK import, export-control, sanctions, investment-screening, customs and security requirements in parallel with the Ukrainian application.
7. Review beneficial ownership, sanctions exposure, political and military connections, intermediaries, litigation, defence-contract performance and IP ownership.
8. Put licensing dependencies, payment risk, suspension, cancellation, priority procurement, end use and onward transfer into the contract.
9. For an investment, verify Defence City status and stress-test export revenue after the temporary procedure ends.

What the reform means for UK–Ukraine defence cooperation

Resolution No. 875 creates a faster route for selected transfers; it does not create a free-trade regime for defence goods. Its value to UK companies will depend on country eligibility, product scope, government documentation and the economics of the administrative charge.

The strongest projects will treat regulatory clearance as part of transaction design. That means confirming both jurisdictions before funds are committed, testing the Ukrainian counterparty rather than relying on a permit alone, and writing domestic-priority and onward-transfer controls into the commercial agreement.

Molfar Intelligence conducts Ukraine due diligence for UK teams, including ownership analysis, sanctions and affiliation checks, defence-company verification, supply-chain research and assessment of declared capabilities. These findings help buyers and investors decide whether the company, transaction and delivery plan can withstand scrutiny before they proceed.

This article provides general information and does not replace Ukrainian or UK legal advice on a specific transaction.