Wednesday, August 3, 2016

Poroshenko enacts NSDC decision on develop Ukraine's defense industry

Ukrainian President Petro Poroshenko has signed order No. 323/2016 on a decision taken by the National Security and Defense Council (NSDC) on May 20, 2016, to develop Ukraine's defense industrial complex, having thus enacted a respective NSDC resolution.

The NSDC instructed the Cabinet to develop and table in parliament a number of legislative acts on rearmament of the Armed Forces of Ukraine and other military formations amid Russian aggression, a posting on the president's official website said.


The Cabinet was also tasked to prepare a program to reform and develop Ukraine's defense industry along with a financing schedule.

The NSDC analyzed the state of affairs in the defense industry, an increase in rearmament of the Armed Forces of Ukraine with advanced and upgraded weapons and military hardware. It instructed the Cabinet to prepare amendments to the law on licensing of economic activities regarding the development, manufacture, sale, repair, modernization and disposal of weapons. A amended bill is to be tabled in parliament within a month.

The government was also given three months for drafting a bill on ensuring favorable conditions for foreign investment in the defense industry through setting up joint ventures. Other bills that should be drawn up by the government within the said deadline are a bill on the development and manufacture of weapons and military hardware and a bill on support of the aircraft industry. The latter should foresee taxation of foreign-made aircraft imported to Ukraine under operating lease agreements. It will also introduce restrictive import duties on foreign-made planes that have been in operation for more than five years if similar models are manufactured in Ukraine. The government should also ensure a reduction in the cost of long-term loans through partial budget subsidizing of part of payments on loans extended by Ukrainian banks for the batch production of Ukrainian aircraft, modernization and re-equipment of aircraft building enterprises.

What is more, the government was requested to prepare and approve within one month a state targeted program of reforming and development of the defense industry until 2020. In addition, guidelines on the development of arms and military equipment in the long-term outlook should be approved by January 1, 2017.

The Cabinet was instructed to foresee funds in the draft state budget for 2017 and the following years to finance state programs in full for the development of armaments, military hardware and the defense industry.

The NSDC also tasked the government to consider writing off the debt of state enterprise "Shipyard named after 61 Communards" for electricity supplied by local power generation company PJSC Mykolaivoblenergo. The government should ensure the power supply of the shipyard in future so that the enterprise could execute a state order to repair and retrofit Ukrainian Navy and State Border Service ships engaged in combat duty and participation in international events.

Further, the Economic Development and Trade Ministry, the Defense Ministry, the State Space Agency of Ukraine and State Concern Ukroboronprom were tasked to develop and approve a road map by September 20, 2016, to reform the system of standardization and technical regulation in the sphere of development and production of defense products.

The NSDC Secretary will monitor the implementation of the NSDC resolution.


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