Ukraine simplifies the export of defence technology – what Norwegian stakeholders need to know

Ukraine has implemented a number of changes to its regulatory framework for the defence industry, both to strengthen the sector commercially and to facilitate cooperation with international players. The latest development is the adoption of Resolution No. 875 by the Cabinet of Ministers of Ukraine (CMU), which introduces a simplified procedure for the export of military goods, dual-use goods and related technologies from Ukraine. The resolution came into force upon its publication on 8 July 2026. 

Whilst Norwegian defence companies have traditionally been suppliers to Ukraine, the current cooperation also makes Norway a buyer and co-production partner for Ukrainian defence technology, particularly in the fields of drones and electronic warfare. It is the Ukrainian exporter who must obtain authorisation under these regulations, but the timelines, conditions and risks involved in the Ukrainian authorisation process directly affect Norwegian purchasers’ ability to receive goods and technology.

The procedure is temporary. It applies expressly for the duration of Ukraine’s state of emergency (martial law), which has been in force since Russia’s full-scale invasion in February 2022, and for six months following its expiry or revocation. Industry players and investors relying on this regulatory framework must therefore be mindful of the uncertainty regarding whether, and if so how, the regime will be continued following a future peace settlement. 

The new procedure must be viewed in the light of previously introduced modernisations to Ukraine’s regulatory framework, including the so-called ‘Drone Deal’ initiative and the ‘Defence City’ scheme – most specifically in the context that the new, simplified processes apply to countries that have been pre-approved by Ukraine’s Ministry of Foreign Affairs under a so-called Drone Deal agreement.

Who can use the new procedure

The new simplified procedure can be used by two categories of importers, namely:

1. By importers from the countries that are parties to bilateral agreements with Ukraine entered into under the "Drone Deal" framework; and
2. By importers from any other country included into a list of eligible countries as approved on a quarterly basis jointly by the Ukrainian MFA and the special governmental commission on the military technological cooperation and export control policy. The MFA will take into account positions and views of the Ukrainian Ministry of Defence, State Security Service of Ukraine, and the Foreign Intelligence Service of Ukraine. So far no such list has been approved and/or published, but this is to be expected some three weeks after the introduction of the new procedure.

The "Drone Deal" initiative is a series of bilateral agreements between Ukraine and selected partner countries, which facilitate cooperation relating to the development, production, exchange of technology and use of military technologies and products – not limited to drone technology, despite the name. According to open sources , as of July 2026, Ukraine has entered into formal ‘Drone Deal’ agreements with, amongst others, Latvia, Lithuania, the Netherlands, Estonia, Denmark, Saudi Arabia, the United Arab Emirates and Qatar. 

Norway has not been formally announced as a party to such an agreement, but in connection with the signing of the declaration of cooperation between Støre and Zelenskyy in Oslo on 14 April 2026, Zelenskyy stated that this was a “first step towards a Drone Deal”. Later that same month, Norway and Ukraine signed a framework agreement under the “Build with Ukraine” initiative, focusing on the production of Ukrainian drones in Norway. 

Whether these agreements will be deemed sufficient under Article 5 of the resolution remains unclear, but given the close cooperation between Norway and Ukraine, it is reasonable to expect that Norway will be included on the MFA list.

The ‘Defence City’ scheme is a purely domestic Ukrainian scheme (introduced by Laws Nos. 13420 and 13421, in force from January 2026) which grants eligible Ukrainian defence companies tax benefits and simplified procedures. ‘Defence City’ status is not a prerequisite for using the simplified procedure set out in Resolution No. 875 – the procedure is open to all registered Ukrainian exporters who export to ‘Drone Deal’ partner countries.

Defence City is nevertheless relevant to Norwegian stakeholders in two respects: (i) Ukrainian suppliers with Defence City status may enjoy additional benefits that make them more competitive, and (ii) investors in the Ukrainian defence industry should investigate whether the target company holds or qualifies for Defence City status, as this affects the company’s tax position and overall valuation. 

Which goods are covered by the new procedure

The new regulations apply alongside the existing regulations on export licences and cover both military goods and dual-use goods. Military goods are products specifically developed for military purposes, such as weapon systems, ammunition and military equipment. Dual-use goods are products that have civilian applications but can also be used for military purposes, such as certain types of electronics, software, sensors and navigation technology. The procedure also covers technology transfers and transactions relating to intangible assets. A minimum value of UAH 15 million has been set for exports of finished defence products, which corresponds to approximately NOK 3.4 million as at today’s date. 

Components and accessories (“складові частини” and “комплектувальні вироби”) are exempt from the value threshold and are subject to the procedure regardless of the contract value. 

What is the essence of the simplified procedure?

Processing time and deemed approval

SECSU (State Export Control Service of Ukraine), Ukraine’s export control authority, must make a decision on an export licence within 30 calendar days of receiving an application, down from 90 days under the standard regulations. During this period, parallel consultations take place: the Ministry of Defence has 20 calendar days (10 days for technology exports) and the SBU, the Foreign Intelligence Service and the Ministry of Defence’s intelligence agency have 15 calendar days to provide their assessment. If these bodies do not respond within the deadlines, their approval is deemed to have been given by tacit consent (‘deemed approval’). Note that this rule on deemed approval does not apply to SECSU itself – SECSU must actively approve or reject the application within the 30-day deadline. 

Implementation of the procedure

The Ukrainian Ministry of Foreign Affairs is required to maintain a list of countries approved for the procedure, whilst the Ministry of Defence maintains a list of critical goods and technologies where exports could harm Ukraine’s defence capabilities. Both lists are updated quarterly and approved by the Inter-Ministerial Commission for Military-Technical Cooperation and Export Control. Exports to countries that do not qualify, of critical technology or which otherwise raise national security concerns, fall outside the scope of the simplified procedure and will require further scrutiny in accordance with the underlying export control regulations. 

Although the procedure has been simplified, several control mechanisms remain in place: mandatory consultation with the SBU and the intelligence services, quarterly updates to the list of critical goods, requirements for state guarantees from the importing country, and the possibility of cancellation with 72 hours’ notice. 

Norwegian operators should nevertheless carry out their own integrity and due diligence assessments of Ukrainian counterparties, in line with good practice for defence sector transactions and Norway’s obligations under the OECD Anti-Bribery Convention.

Payment mechanisms and additional charges on re-export

The new procedure also includes fees payable to the Ukrainian authorities in connection with the export of covered goods and technology. 

• When exporting stand-alone (finished) goods, whether military or dual-use, a fee equivalent to 20% of the value of the goods is payable.
• For components and accessories, a fee equivalent to 30% of the value of the goods is payable.
• When exporting technology, not goods, a fee equivalent to 20% of the value is payable – where the value is to be set at either the actual selling price over the last six months or, where this is not possible, on a calculated basis.
• In the case of re-export to third countries of goods produced using technology transferred to foreign entities, a fee of 20% of the value of the goods is payable.

The duties are due at the time of application, and proof of payment must be attached to the application. The resolution does not provide for the refund of fees if an export licence is refused – which entails a not insignificant commercial risk, particularly given that the Ministry of Defence may invoke priority for its own defence needs as grounds for refusal (see section 4.4 below). 

State guarantees from the importing country

An application for an export licence must be supported by a guarantee document from the authorities of the importing country. In the case of technology transfers, the guarantee must, amongst other things, cover that (i) the technology is provided solely as a right of use, not as a transfer of intellectual property rights, (ii) re-export, sale or temporary export requires prior approval from SECSU, (iii) production shall only take place in the quantities and on the terms set out in the contract; and (iv) all upgrades, improvements or further developments must be reported and transferred back to Ukraine.

For Norwegian buyers, the practical challenge will be to secure such guarantees from the Norwegian government. This requires the involvement of the Ministry of Defence and, where appropriate, the Ministry of Foreign Affairs, and should be treated as a prerequisite for the transaction – not a formality that can be sorted out afterwards. The obligation to report on improvements is particularly relevant for co-production and licence agreements, as in practice it means that Norwegian partners must share the results of their own R&D based on Ukrainian technology.

Due diligence requirements for foreign operators

The procedure imposes strict requirements on foreign importers, end-users, intermediaries and other parties involved, in terms of identity, ownership and end-use.

Norwegian companies and funds should therefore expect that SECSU and Ukrainian exporters will require comprehensive KYC documentation, information on beneficial ownership and sanctions screening, including confirmation that no part of the ownership chain is linked to Russian or Belarusian persons or entities subject to sanctions. A thorough internal review should be carried out before negotiations commence.

Suspension and cancellation of licences

The regulatory risk does not cease upon the issue of an export licence. Licences may be suspended in the event of, amongst other things: (i) breach of the foreign importer’s obligations under government defence contracts, (ii) failure to pay duties, or (iii) notification from the Ministry of Defence of its intention to procure the goods in question itself (suspension limited to 30 days). 

Furthermore, licences may be cancelled in the event of, amongst other things: incorrect information in the application, sanctions against any of the parties, breach of the licence conditions, breach of the importing country’s state guarantees, or intelligence information regarding the risk of deviant end-use or unauthorised re-export.

Contracts with Ukrainian suppliers should therefore address the consequences of suspension and cancellation, including payment milestones, delivery delays, the right of termination and limitations of liability.

Practical recommendations for Norwegian stakeholders

Norwegian defence companies and investors considering transactions relating to Ukrainian defence technology should, amongst other things, consider the following measures:

• Initiate dialogue with the Norwegian authorities at an early stage. The requirement for state guarantees from the importing country cannot be met by the private buyer alone. Initiate dialogue with the Ministry of Defence and, where appropriate, the Ministry of Foreign Affairs at an early stage.
• Carry out an internal KYC assessment. Confirm that the entire ownership chain is free from any links to Russian or Belarusian individuals. For funds: also assess whether the LP base, GP structure or other partners contain exposure that could create challenges.
• Assess the commercial implications of the fee structure. The fees of 20–30% of the contract value, which are due at the time of application with no statutory right to a refund in the event of rejection, must be factored into pricing models and margin calculations from the outset. In the case of co-production or licence agreements, the 20% fee on re-export to third countries must also be taken into account.
• Incorporate regulatory risk into the contract. Contracts with Ukrainian suppliers should address the risk of delays, suspension, refusal and cancellation of export licences, as well as Ukraine’s priority right of procurement.
• For investors: carry out targeted due diligence. Investigate whether the target company has ‘Defence City’ status, existing export licences, any breaches under government defence contracts, and exposure to the list of critical goods. Also assess how the time limit on the procedure affects the value of export-driven revenue.
• Carry out integrity and due diligence assessments. Norwegian entities have independent obligations under Sections 387–389 of the Penal Code and the OECD Anti-Bribery Convention. Carry out your own integrity due diligence on Ukrainian counterparties, irrespective of the Ukrainian authorities’ assessments.

The new export regime represents a significant development for Norwegian-Ukrainian defence cooperation. The framework creates genuine commercial opportunities, particularly in the fields of drones, electronic warfare and related technologies. At the same time, the procedure is conditional and subject to controls – it is not a free-trade regime. Norwegian operators who engage at an early stage with both Ukrainian and Norwegian authorities, carry out thorough internal assessments and build appropriate risk allocation into their contracts will be best positioned to benefit from this new framework.