$43m for a middleman who did nothing: NABU charges ex-head of state arms exporter

A middleman that never was

Ukraine’s National Anti-Corruption Bureau (NABU) and the Specialised Anti-Corruption Prosecutor’s Office have served a notice of suspicion on a former head of a state enterprise that exports military products. According to LIGA.net, the suspect is a former top executive at Ukrspetsexport; NABU itself did not name the company.

Investigators say that in 2015 the then head of the enterprise signed a contract with a foreign company that was supposed to receive a fee for intermediary services in the sale of Ukrainian military products. “In fact, the state enterprise conducted negotiations with the foreign customer from a Middle Eastern country on its own. The foreign company took no part in them,” NABU said.

Despite this, in 2018–2019 the executive signed acts confirming supposedly provided agency services and arranged payments to the foreign company. No services were actually provided, and the documents contained false information. NABU estimates the losses to the state enterprise at more than $43 million, or over UAH 1.1 billion — 30% of the total contract value.

The charges

The suspect faces charges under Article 191(5) of the Criminal Code (embezzlement through abuse of office on an especially large scale) and Article 366(1) (an official drawing up and issuing knowingly false documents). The bureau said specialists from the State Audit Service actively assisted the investigation. A notice of suspicion is not a conviction; only a court can establish guilt.

Ukrinform recalls that in March NABU and SAP exposed an organised group that in 2014–2019 appropriated more than UAH 32 million from enterprises of the Ukroboronprom defence concern.

Customs: a 10% “tribute” on coffee

The Security Service of Ukraine (SBU) reported a separate scheme on 30 October. According to the SBU, the head of a customs clearance department and two subordinates — chief state inspectors at a customs post — created artificial obstacles for businesses importing green, unroasted coffee. “For unimpeded customs clearance, the officials demanded 10% of the value of each kilogram of goods,” the statement said. If importers refused, the officials threatened reports of customs violations, confiscation of goods, fines or inflated customs valuations.

Investigators say the scheme was organised by the 49-year-old department head, who distributed the money among accomplices. Several episodes were documented. The suspects were charged under Article 28(3) and Article 368(3) of the Criminal Code and face up to 10 years in prison with confiscation of property.

Vinnytsia: housing for soldiers

In Vinnytsia region, police completed an investigation into the construction of housing for military personnel on defence ministry land. Investigators say that in 2017 the ministry’s capital construction department signed a contract with a private company to build apartment blocks in Vinnytsia. The former acting head of the Podillia capital construction department failed to ensure a mandatory valuation of the land plot, and the developer’s director knowingly ignored the requirement.

As a result, the state was supposed to receive 2,800 square metres of housing but actually got 1,300 square metres — 27 flats. Losses are estimated at UAH 15.5 million. The official is charged with negligence (Article 367(2), up to 5 years) and the director with large-scale fraud (Article 190(5), up to 12 years with confiscation). The indictments have been sent to court.

Why it matters

During the full-scale war, defence money and housing for soldiers are especially sensitive. Cases involving arms exports, customs and defence construction show that anti-corruption bodies and the SBU continue to investigate both new schemes and episodes dating back years.