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Procedure for importing demilitarized equipment is improved

24.05.2019

Subject of complaint: The Cabinet of Ministers of Ukraine (CMU) 

Complaint in brief: In 2017, a manufacturer of assemblies and component parts for armored vehicles addressed the Council. The Complainant could not import demilitarized equipment, since none of government agencies could grant the permit for its civil use (Permit). 

Demilitarized equipment means tanks which all military components were unmounted from and turned into armored vehicles suitable for civil use, e.g. in frontline territories.
During preliminary examination of goods and registration in the State Service for Export Control of Ukraine (SSEC) the Complainant was informed that it was necessary to provide the so called permit of the central executive authority for the equipment civil use. Since the legislation does not clearly state what department is in charge of it, the Complainant requested the permit from the Ministry of Defense of Ukraine (MOD). At the same time, the MOD informed the company it was not authorized to issue such a permit and advised to apply to SSEC that also refused to, referring to the fact that issue was outside its competence. 
 
Desperate to get the necessary permit on its own, the company turned to the Council. 

Actions taken: The Council’s investigator examined case materials and found there was a legislation gap in the Complainant’s case. Demilitarized machinery could be imported if there was a permit of the relevant executive authority. However, in practice, it is not easy to figure out which government agency is responsible for issuing these permits. The MOD and SSEC only forwarded the appeal one another. Shortly afterwards, the Ministry of Economic Development and Trade (MEDT), which implements export control policy, was involved in the dialogue. After several rounds of correspondence, the issue was brought up at the CMU leadership team level. 
In early 2018, the Vice Prime Minister of Ukraine ordered to consider the appeal of the Business Ombudsman Council, MOD, MEDT, the Ministry of Internal Affairs, the Ministry of Internal Affairs, and SSEC. However, as it became clear from state authorities 
responses, a quick compromise could not be achieved. Therefore, the parties decided to amend the legislation regulating, among other things, the Complainant’s issue. 
 
Result achieved: In the summer of 2018, the President, by his order enacted the National Security and Defense Council decision “On Improvement of the State Policy on Provision of the Armed Forces of Ukraine and Other Military Units with Foreign Produced Defense Products, As Well As Promoting Cooperation of Defense Enterprises of Ukraine with Foreign Partners.” The CMU, within two months’ term, was ordered to develop draft amendments, necessary to ensure implementation of the decision. 
 
As a result, the MEDT submitted for Government consideration a draft resolution improving the procedure for assigning powers to domestic defense enterprises of various forms of ownership for import of military goods to be used in their own production. After the approval by the CMU, the resolution became effective in October 2018.
 
At the beginning of 2019, the Complainant informed, that, based on the experience of other market players, procedure indeed worked. The case was closed.