A public discussion on the results of implementing corporate governance reform in the public sector of the defense industry was held on March 27, 2024. The event was chaired by Herman Smetanin, Director General of JSC Ukrainian Defense Industry (JSC UDI). In he public discussion, that was traditionally held with the participation of the media, took part the Chairman of the Supervisory Board of JSC UDI David Lomjaria, The head of NAPC Viktor Pavlushchyk and the Head of the Security and Defense Integrity Policy Development Department of NACP Maryna Barynina, representatives of the Ministry of Strategic Industries and the Ministry of Defense, Marina Assistant to Building Integrity Programme NATO Representation to Ukraine (NRU) Kogut Senior, anti-corruption NGO such as StateWatch, NAKO and heads of JSC UDI entities. «It has been nine months since UDI operates as a JSC not a State Concern Ukroboronprom. During this period, many important events took place: UDI shares were issued that now they are owned by the State represented by the Government, a large-scale anti-corruption infrastructure was launched, the Cabinet of Ministers appointed the Supervisory Board of UDI,» said Herman Smetanin. More than 30 Subsidiaries of the JSC UDI have been corporatized through transformation into LLCs and JSCs. Transparent selection of 19 candidates for the heads of entities was carried out.  «We keep on building our Network of Anti-corruption officers at defense companies,» said Olena Kovalova, Director of the Compliance and Risk Management Department. - «Thus, in the first quarter of 2024, we assessed corruption risks at 20% of our entities». «We are convinced that we will see a fundamentally new ecosystem of Ukrainian defense as a result our corporate governance reform. The defense industry's role in country's economy development will only grow in the future. In addition, the reform will make it possible to transfer advanced technologies, attract investments, and establish joint ventures with foreign partners,» said the Chairman of the Supervisory Board of JSC UDI David Lomjaria.

In a significant move to bolster Ukraine's defense capabilities, Ukrainian Defense Industry has partnered with Česká zbrojovka a.s., a subsidiary of Colt CZ Group SE, signing an Agreement of Intent for the license transfer. This agreement will enable the Ukrainian company to assemble NATO standard rifles, specifically the CZ BREN 2 model, in Ukraine. At the center of this initiative is the CZ BREN 2 rifle, renowned for its deployment by various military and law enforcement customers worldwide, including the Army of the Czech Republic, Ukrainian Armed Forces, French National Gendarmerie Intervention Group (GIGN), Portuguese Army, Polish Border Guard, Romanian Gendarmerie and other professional customers. The project's goal is to equip the Ukrainian Armed Forces with a proven, high-quality standard NATO firearm, enhancing their operational capabilities. Herman Smetanin, CEO of Ukrainian Defense Industry, highlighted the importance of this agreement: “The technology transfer from NATO member states marks a pivotal moment for our company, driven by successful international cooperation and ongoing defense reforms. This initiative is a crucial step towards establishing an Arsenal of the Free World within Ukraine.” “We are honored to support Ukraine’s efforts to adopt NATO standard equipment and increase the capability of its defense industry. This first step towards of full-scale transfer of technology project for the CZ BREN 2 rifle is a direct consequence of its successful deployment on the battlefield in Ukraine by the Ukrainian Armed Forces,” underlined Jan Zajíc, CEO of Česká zbrojovka. This ambitious transfer of technology project of the CZ BREN 2 rifles in Ukraine was showcased as a key initiative at the First International Defense Industry Forum (DFNC1) in Kyiv. The forum, held at the end of September 2023, was a collaborative effort by the Ukrainian Ministry of Strategic Industries, Ministry of Defense, and Ministry of Foreign Affairs, drawing participation from 252 companies across more than 30 countries.

Ukrainian Defense Industry signed a Memorandum with MBD Deutschland, a leading company in the development and production of missile systems. The document envisages joint study of programs or opportunities for cooperation on air defense systems and concepts, in particular to countering UAS. Potential areas of partnership include research, development, production, investment, etc. «Cooperation with the world's leading arms companies not only expands Ukraine's existing capabilities on the battlefield, but also lays a solid foundation for the further development of our defense industry and helps its integration into the NATO defense industry,» said Herman Smetanin, CEO of Ukrainian Defense Industry. “This agreement marks a milestone between the Defence Industries in our countries.” said Thomas Gottschild, Managing Director MBDA Deutschland, “I am looking forward to working with Ukrainian Defense Industry JSC, a leading player in European Defence.” MBDA Deutschland develops and manufactures missile and air defense systems that meet current and future requirements of  all branches of the armed forces (air force, army and navy)

As part of the development of the anti-corruption infrastructure, which is taking place in the Joint-Stock Company Ukrainian Defense Industry, the practice of personal commitments of leadership has been implemented. Director General of JSC UDI Herman Smetanin has already made them public. And now Olena Kovalyova, Director of the General Department for Compliance and Risk Management, announces her own personal commitments in the position. Remind you that these steps are an integral part of transparent reporting to civil society, which is provided by the Anti-corruption Strategy of the JSC UDI.  

Personal obligations of the General Director of JSC Ukrainian Defense Industry Herman Smetanin to develop the anti-corruption infrastructure

Joint Stock Company «Ukrainian Defense Industry» and one of the world's leading defense companies, German concern Rheinmetall AG, have established a joint venture. German-Ukrainian LLC «RHEINMETALL UDI» (RHEINMETALL UKRAINIAN DEFENSE INDUSTRY LLC) was registered on October 18, 2023. This was announced by the Prime Minister of Ukraine Denys Shmyhal during the German-Ukrainian business forum in Berlin in the presence of the Federal Chancellor of Germany Olaf Scholz. Notably, this is the first joint venture established with foreign partners with the participation of Ukrainian Defense Industry JSC. The basis of the cooperation is the maintenance and repair of armored vehicles transferred to Ukraine by partners. This cooperation also envisages joint production of Rheinmetall products in Ukraine and the development of advanced weapons and military equipment on the basis of the newly created enterprise with the participation of Ukrainian and German specialists. «Ukroboronprom has been working for a long time to establish a joint venture with Rheinmetall. This opens up new opportunities for the state defense industry and establishes us as a reliable player in the international arena. I am sincerely grateful to our partners for their cooperation and trust, – said Ukroboronprom Director General Herman Smetanin during his visit to Germany. – This is   a significant work done by the Office of the President of Ukraine, the Cabinet of Ministers of Ukraine, the Ministry of Foreign Affairs and the Minister of Strategic Industries Oleksandr Kamyshin». Armin Papperger, CEO Rheinmetall: “Meeting Ukraine’s urgent needs in its fight for freedom and democracy as quickly as possible is a matter of central importance to us at Rheinmetall. Thanks to its expertise and capabilities, Rheinmetall has what it takes to be a valuable and powerful partner to Ukraine both in the short term and in the long run. We are pleased to have Ukrainian Defense Industry as a very capable and trustworthy partner at our side.» The establishment of joint ventures with foreign partners is one of the key opportunities that the reform of the state defense industry has opened up for the transformed Ukroboronprom. On June 28, 2023, the State Concern was transformed into the Ukrainian Defense Industry Joint Stock Company, potentially becoming a more familiar and transparent partner for international companies. Currently, the completion of Ukroboronprom's reform is the focus of the state defense industry team.

The State Concern «UkrOboronProm» and one of the world leaders in the defence industry, the German company Rheinmetall, have signed a strategic partnership agreement. The goal is to strengthen Ukraine's defence industry and its national security by establishing a joint venture. «Meeting the urgent needs of Ukraine in its struggle for freedom and democracy as soon as possible for freedom and democracy is of crucial importance to us. Given its experience and capabilities, Rheinmetall is well-placed to be a valuable and powerful partner for Ukraine in both the short and long term. In turn, Ukroboronprom, headed by Yurii Husiev, is a very reliable partner for us», emphasised Armin Papperger, CEO of the German company. According to the agreement, the basis and first step for cooperation is the technical maintenance and repairing of armoured vehicles transferred to Ukraine. Moving forward, the partners are going to jointly manufacture Rheinmetall products in Ukraine as well as jointly develop advanced samples of weapons and military equipment on the basis of the newly established joint venture with the participation of Ukrainian and German experts. «It is a great honour for me to establish a joint venture between Rheinmetall, one of the world's leading defence manufacturers, and Ukroboronprom, which increased assembly of armament and military equipment despite numerous Russian missile attacks. Working for victory 24/7, Ukroboronprom can do even more. We are grateful to Rheinmetall for its willingness to help us defeat russia», stated Yurii Husiev, General Director of Ukroboronprom. The joint venture is scheduled to begin operations in mid July 2023.

One of the Concern's enterprises and Polska Grupa Zbrojeniowa (PGZ S.A.) signed the Agreement on producing 125 mm shells for tank guns. It happened during the visit of​​ the President of Ukraine Volodymyr Zelenskyy to the Republic of Poland. The Agreement foresees the deployment of new production lines to manufacture ammunition for 125-mm tank guns. Due to the high risk of missile attacks from the side of Russia to Ukroboronprom's enterprises, only Polish cities are being considered to host the production. However, both sides will work on the development of projectiles: Ukraine will provide its technologies and high-qualified specialists with the appropriate competencies and experience. This is the next step towards further strengthening partnership between Ukraine and Poland in the defense sphere. Recently Ukroboronprom has started producing 125-mm ammunition for tank guns together with another member state of the North Atlantic Alliance. Thus, Ukroboronprom will produce shells for tank guns in collaboration with two NATO member countries at once.

Today, March 21, the Cabinet of Ministers of Ukraine at its meeting decided on the transformation of the State Concern «Ukroboronprom» into the Joint Stock Company «Ukrainian Defense Industry». This is the starting point of the transformation of Ukroboronprom into a modern high-tech defense company, where 100% of the shares belong to the state. «This decision opens up new opportunities for the development of Defense Industry of Ukraine: technology transfer, implementation of OECD and NATO standards, investment attraction, repair, maintenance and creation of new types of weapon systems that will bring us closer to the Victory!» – noted Director General of Ukroboronprom Yuriy Husyev. As a reminder, on October 1, 2021, President of Ukraine Volodymyr Zelenskyy signed the Law of Ukraine No. 1630-IX «On the peculiarities of reforming the enterprises of the military-industrial complex of the state form of ownership», which entered into its force on October 6, 2021. Currently, 27 member-enterprises of Ukroboronprom have already been transformed from state enterprises into business companies (LLC/JSC), another 29 are being still in a process of transformation. In general, an implementation of a corporate model of management is the best world practice, which protects the sphere of the state defense industry from corruption risks and direct political influence, because a company becomes fully accountable to the state shareholder, open to investors and predictable to partners. The transformation process of Ukroboronprom and its enterprises does not have an impact on a production of weapon systems for the needs of the Defense and Security Forces of Ukraine. Read more about the reform here: https://ukroboronprom.com.ua/en/pro-reformu

One of the enterprises of the State Concern «Ukroboronprom» became an operator of mine countermeasures in Ukraine. It received a corresponding certificate for demining and other operations with explosive objects on the territory of our state.  The enterprise has its own Humanitarian Demining Center, which employs high-class specialists.  Since 2010, the Center has been accredited by the UN as a mine countermeasures service provider and is a partner of UNMAS, the relevant service of the United Nations.  From now on, the enterprise of the Concern has the right to carry out demining, destruction and disposal of explosive objects that are unsuitable for use and storage, provide medical assistance to victims, train specialists and improve their qualifications, etc. on the territory of our country.  Specialists of the Ukroboronprom enterprise, which received a Ukrainian certificate, created tasks for the participants of the professional direction of the IDI Camp hackathon, which will be held in Kyiv on September 23-25.  The best demining solutions will receive all sort of support (financing, provision of material and technical base for implementation, etc.) from the Concern. Memo: In Ukraine, any enterprise, institution or organization meeting the relevant requirements, regardless of its ownership and legal form, can become a demining operator. At the same time, those located in offshore jurisdictions, incorporated in sanctioned countries, and originating from a state legislatively recognized as an occupier or aggressor are banned from such operations.

As of today, September 7, the State Concern «Ukroboronprom» signed the Framework Cooperation Agreement with Honeywell. Cooperation will cover the following areas: Aviation, UAVs, Navigation and Radars. This is not the first experience of cooperation between the Concern and the Corporation. For reference: Honeywell Aerospace products and services are found on virtually every commercial, defense and space aircraft. The Aerospace business unit builds aircraft engines, cockpit and cabin electronics, wireless connectivity systems, mechanical components and more. Honeywell has been working in Ukraine also in the field of civil products for over 25 years.

Before Russia's full-scale invasion of Ukraine, Sir Richard Branson called on the world to support Ukraine: «We must not leave the country that has voluntarily turned over nuclear weapons in exchange for peace and which is now on the verge of being invaded by the country that persuaded it to do so.» Support of the founder of the Virgin Group has been consistent since the Revolution of Dignity.  Today, Richard Branson saw how the «Russian Peace» destroyed the two largest aircraft in the world, both of them Ukrainian: An-124 Ruslan and An-225 Mriya. Having set over 240 unbroken world records, AN-225 Mriya was more than just a plane. It was and is a symbol of our people, which is why it deserves to be rebuilt. Yuriy Husyev, General Director of Ukroboronprom, together with Yevhen Havrilov, acting Director General of the Antonov State Enterprise, Volodymyr Taftay, the Head of the State Space Agency of Ukraine and Chairman of the Servant of the People faction David Arakhamiya briefly discussed the prospects for the development of the aerospace industry and Ukraine's place in it with Mr. Branson.