Military-technical state security depends on the military-industrial complex, but the latter can not meet the full needs of the Armed Forces in the modern arms and military equipment. Today, the most important aspect of public policy has been reforming the military-industrial complex of Ukraine (DIC). This modernization of the legal framework to improve the functioning of the defense industry has become particularly relevant.

In Ukraine since 2000 developed and adopted a number of documents to reform defense industry, but its objectives have not been met.

Currently in force concept of the State Program of Reforming and developing the military-industrial complex of Ukraine till 2020, which includes a number of measures to improve the functioning of the defense industry. This document presupposes the implementation of mechanisms of state-private partnership. But the “ways and means to solve the problem …” This program does not include a procedure for the implementation of public-private partnership.

If we analyze the legal framework formulation and implementation of public-private partnership in the defense industry of Ukraine, you can see several drawbacks:
1) lack of real, not declarative state support.
2) the lack of regulations that clearly define the legal basis of interaction between the private sector and the state system DIC, duties and procedure for interaction of such relationships;
3) lack of study and application excellence practices of public-private partnership in the defense industry in the world. After Ukrainian legal framework needs further improvement on the basis used in world practice approaches and mechanisms.

“What, for example, occurred in the US? Within five years after the Second World War, demand for military products has fallen sharply, and the US government transferred a significant part of civil defense plants “in reserve”. In the future defense industry enterprises have been privatized or leased to private companies. It also conducted a deep reorganization of the mechanism of interaction between the Ministry of Defense contractors and adopted a package sufficiently rigid laws. US Defense received almost no economic benefits from consolidation MIC and liberalization of exports, however, allow the combined entity MIC obtain high profits for some contracts to these companies retained the ability to carry out new programs to support development or production less profitable directed to other segments of the defense . Thus, the government not only supported the consolidation of the MIC but also created the conditions under which military enterprises were forced to change their organizational arrangements and control mechanisms. “

Thus, the US experience – a vivid example of stimulating the development potential of private enterprise.

To facilitate the establishment of public-private partnership should primarily within the framework of the League of defense enterprises Ukraine to determine the list of problems, set goals, create specialized working groups, which should include lawyers, economists and, if possible, a military expert. In the following select responsible and to begin work on the implementation of public-private partnership.

For example, today on the Ministry of Economic Development and Trade of the draft law “On the creation and production of weapons, military and special equipment.” Its purpose publication – to receive comments and suggestions from the public. According to the Law of Ukraine “On Principles of Regulatory Policy in Economic Activity” was given a time limit within which to submit their comments and suggestions. So, given that draft regulatory act was published March 15, 2017, and the term was identified one month, you can ensure that it is possible to exercise the right to make proposals to the regulator.

In addition, informed of the publication of the draft regulatory act has been defined way to provide comments and suggestions, namely, the address, which must send their wishes. Therefore, we believe that it is first necessary to take measures in processing the bill. Moreover, today there is a tendency for the import of weapons and military equipment. For example, in Ukraine gets test in foreign military equipment and development of domestic enterprises are often ignored by the customer.

It is necessary to point out that not all foreign governments concerned to military-industrial complex of Ukraine developed since construction of a powerful force causes the birth of a strong opponent.

The second example is directly from our company. The company “Omega Consulting Group” on one of the international exhibitions found a partner in one of the companies DK “Ukroboronprom.”

«After the exhibition in our company approached representatives of several states with a proposal to buy military goods. When the dialogue began with one of the special exporters Ukraine, we asked whether we have to work through foreign affiliates Ukrainian companies. After lengthy negotiations with us yet signed an agreement with Ukrainian company and reported that the information on product prices, we asked to be received within the time closer. Three months later we got a price that is 4 times the price of competitors from other countries».

So, focus on contracts with foreign companies is primarily due to the lack of public-private partnership in the defense industry at the legislative level.

I think that first of all need to work towards identifying and addressing important issues that may arise in public-private relations in the field of defense industry, such as:

– pricing of military and dual-use;

– creating a competitive environment for enterprises of all forms of ownership;

– priority for enterprises of Ukraine by the state order of military and dual-use;

– simplification of procedures for obtaining authority to implement export of military goods.

It is worth mentioning that any comments and suggestions should be recorded in writing and submitted for consideration to the competent authority of fixing such transfer. Otherwise, our wishes will only wishes.

Tatiana Kebkalo
Lawyer, Managing Director of
“Omega Consulting Group”
www.omega-consulting.com.ua