IMPACTA DIGEST

UKRAINE'S DEFENCE SECTOR

VOL. 2, 2026

UKRAINE'S DEFENCE SECTOR

VOL. 2, 2026

Overview of the key regulatory, business and international developments shaping Ukraine's defence sector during Q3 of 2026.

October 2026

І. REGULATORY UPDATES


1. The Cabinet of Ministers approved changes to public and defence procurement rules under martial law

The Cabinet of Ministers of Ukraine has adopted Resolution No. 957 of 15 July 2026, amending the special procurement procedures approved by Resolution No. 1178, which governs public procurement, and Resolution No. 1275, which governs defence procurement. Most changes took effect on 1 September 2026,). Procurements launched before 1 September 2026 are to be completed under the previous rules.

For defence procurement, the Government has removed the blanket cross-reference that allowed direct contracting in any circumstance listed in paragraph 13 of Resolution No. 1178 and replaced it with a self-standing, closed list of grounds for concluding state contracts outside the electronic procurement system, including:

  • cancellation of open tenders due to no tender offers being submitted, provided the subject matter, characteristics, and contract terms match the original tender documentation and the price does not exceed the expected value;

  • the customer or its procuring unit being located in a territory of active hostilities not yet concluded at the time of contracting;

  • the goods, works, or services being available only from a single supplier due to a documented lack of technical competition, the need to protect intellectual property rights, or a "supplier of last resort" or universal electricity/gas supplier;

  • an urgent, documented and unforeseeable necessity that makes it impossible to meet open-tender or electronic-catalogue deadlines, including immediate response to the consequences of emergencies or  Russian aggression, provision of humanitarian aid abroad, replacement of a contractor terminated for breach for the period needed to run a new open tender (up to 20% of the contract value), or procurement pending an appeal against the customer’s decisions in an ongoing tender  (up to 20% of the challenged tender’s expected value);

  • the need for an additional volume of goods from the same contractor within three years of the original contract, where switching suppliers would create technical incompatibility, capped at 50% of the contract value;

  • the need for additional works or services from the same contractor within three years, on the same 50% cap;

  • procurement of legal (advocacy) services. 

These grounds apply to defence goods and services worth UAH 200,000 or more and works worth UAH 1.5 million or more, excluding, inter alia, procurement constituting state secrets and procurement of weapons, military equipment, ammunition and fortifications.

Resolution No. 957 replaces broad direct-contracting discretion in defence procurement with a defined, documented set of exceptions, offering more predictable grounds for bypassing the electronic procurement system  in urgent or combat-related situations.


2. New tax and customs exemptions for defence production: The Verkhovna Rada expanded VAT and duty relief for weapons, drones, and defence-related vehicles

The Verkhovna Rada of Ukraine has enacted Law No. 4894-IX, which introduces a full VAT exemption for the supply of ground robotic complexes (GRCs) for the needs of the Defence Forces. The exemption will remain in effect for the duration of martial law and applies to state defence procurement contracts concluded with the Ministry of Defence, the Armed Forces of Ukraine, other law enforcement agencies, and enterprises co-executing such procurements. According to the Defence Procurement Agency, the measure will eliminate an unnecessary financial burden on the procurement chain, reduce the cost of acquiring unmanned ground platforms, and significantly accelerate their delivery from the manufacturer to the frontline.


3. The Cabinet of Ministers significantly simplified the import of components for weapons manufacturers

The Verkhovna Rada of Ukraine has enacted Laws No. 4967-IX and No. 4968-IX, which together expand VAT, excise tax, and customs duty exemptions for goods used in defence production and procurement.

Under Law No. 4967-IX, amending the Tax Code, the import of components used by manufacturers in their own production of weapons, military and special equipment, including unmanned systems, electronic warfare and reconnaissance equipment, and optical-electronic devices, is exempt from VAT, provided the end recipient is the Ministry of Defence, the Armed Forces of Ukraine, a law enforcement agency, or another military or defence-related formation (the "End Recipients"), and the goods are transferred to them free of charge. The list of components covered by this exemption is provided in the Customs Code. The law also adds quad bikes and side-by-side vehicles to the list of goods exempt from VAT upon import and supply within Ukrainian territory when imported or supplied for defence needs / ultimate use by End Recipients; in the latter case, an exemption from excise tax on importation and domestic supply is also provided. Further, the law extends the existing VAT exemption regime to some categories of weapons and ammunition supplied under state contracts and for use by End Recipients. Executors and co-executors of state contracts can benefit from some of these new exemptions as well.

Law No. 4968-IX makes the corresponding amendments to the Customs Code, extending the same exemptions to import duty: quad bikes and side-by-side vehicles, along with weapons and ammunition, are now exempt from customs duty when supplied for defence needs and ultimate use by End Recipients.

  

IІ. BUSINESS & INDUSTRY NEWS


1. GreenTech Harvest Sign Drone Manufacturing Partnership with General Dynamics Mission Systems–Canada, and Expands European Manufacturing Cooperation with VDL Group

In September 2026, General Dynamics Mission Systems–Canada and Ukrainian drone developer GreenTech Harvest signed a memorandum of understanding to cooperate on the production of Ukrainian-designed unmanned aerial systems in Canada.

The partnership is expected to combine Ukrainian battlefield-tested technologies with Canadian industrial capabilities, supporting the commercialisation of Ukrainian defence solutions in the North America and strengthening international industrial cooperation in the defence sector.

GreenTech Harvest also announced a cooperation initiative with Dutch industrial conglomerate VDL Group aimed at manufacturing Ukrainian drone systems in the Netherlands.

The project is expected to support the production of Ukrainian-designed unmanned systems for European customers and represents another example of Ukrainian defence technologies being integrated into European industrial ecosystems through localisation and cross-border manufacturing partnerships.

Learn more on lb.ua


2. Ukraine and Germany Advance Major Joint Drone and Missile Development Programme

In September 2026, Ukraine and Germany announced progress towards a comprehensive defence-industrial cooperation programme covering the joint development and production of drones, missiles, and defence software.

The initiative builds on existing partnerships between Ukrainian and German defence companies. Among the notable examples is the establishment of Quantum WIY Industries, a joint venture between German drone manufacturer Quantum Systems and Ukrainian company WIY Drones, focused on the development and production of next-generation unmanned systems.

The programme highlights the growing shift from military aid towards long-term industrial cooperation and joint manufacturing between Ukrainian and European defence companies.

Learn more on aol.com


3. AI-Powered strike drones: DoD Solution partners with UUS to scale autonomous guidance systems

Estonian-Ukrainian defense-tech developer DoD Solution has established a strategic partnership with German-Ukrainian drone manufacturer United Unmanned Systems (UUS).

Following successful trials, the companies will expand the integration of the AURA AI platform – which pairs proprietary software with the specialized AURA single-board computer – across a wider range of UUS strike unmanned platforms. This technology enables strike drones to conduct autonomous navigation, target recognition, and terminal guidance under intense electronic warfare conditions and in environments completely lacking GPS signals.

Learn more on dou.ua


4. Swarmer acquires Ratel Robotics: Ukrainian defense-tech firm buys UGV Maker for $224M

Ukrainian defense-tech company Swarmer, which specializes in AI software for autonomous drone coordination, has acquired domestic unmanned ground vehicle (UGV) manufacturer Ratel Robotics in a deal valued at $224 million. Following the acquisition, over 300 Ratel employees will join the combined team, while founder Taras Ostapchuk will remain as CEO of the robotics division.

This strategic expansion marks Swarmer's first major takeover since American entrepreneur and Blackwater founder Erik Prince was appointed chairman of the company's board of directors.

Learn more on dou.ua

    

    

IІI. GOVERNMENT & INTERNATIONAL COOPERATION


1. Drone Deal: Ukraine and Estonia sign a 10-year agreement on defence cooperation

Ukrainian President Volodymyr Zelenskyy and Estonian Prime Minister Kristen Michal signed the Drone Deal agreement during a meeting in Ankara. The ten-year agreement focuses on joint defense production on the territories of both states, technology sharing, and strengthening air defense capabilities. Estonia became the seventh country to join the Drone Deal, which builds long-term defense partnerships by combining joint manufacturing, financial commitments, and the export of battle-tested solutions. The cooperation may also expand to cover cybersecurity, critical infrastructure protection, and satellite projects.

Learn more on rbc.ua


2. Drone Deal Expansion: Ukraine, Netherlands, and Denmark sign agreements for joint production

The Netherlands and Denmark have become the eighth and ninth countries to join Ukraine's international Drone Deal agreement. Signed on the sidelines of the NATO summit, the documents outline extensive cooperation in the joint production of drones, the development of innovative defense technologies, and a systematic exchange of real battlefield expertise.

Learn more on rbc.ua


3. Joint Production: Ukraine and Germany launch joint production of Bars interceptor drones

Ukraine's Minister of Foreign Affairs  and Germany's Federal Minister of Defence signed an implementation agreement to begin the joint production of Bars interceptor drones in Germany. The project is entirely financed by Germany. Ukraine is set to receive 2,000 Bars interceptors, which will be produced as part of joint manufacturing.

Learn more on rbc.ua


4. Air Defense: Norway allocates over $300 million for purchase of Patriot missiles for Ukraine

At the NATO Summit in Ankara, Norway announced approximately $306 million in funding dedicated to the procurement of Patriot missiles for Ukraine. This contribution, facilitated through the Prioritized Ukraine Requirements List (PURL) and JUMPSTART mechanisms, aims to rapidly address Ukraine's critical need for counter-ballistic air defense capabilities.

Learn more on mod.gov.ua


5. EU-Ukraine 18-company Drone Alliance launched

EU Commission launches EU-Ukraine Drone Alliance to boost drone and counter-drone technology. Nine Ukrainian and nine EU companies were chosen from about 400 applicants to become the founding members of the Alliance. Named members include Tencore, Athlon Avia and Vyriy Industry from Ukraine, and Quantum Systems, Fincantieri and Terma from the EU. The Alliance held its first meeting in Brussels on 11 September 2026.

Priority areas were set:

  • speeding up joint ventures between Ukrainian and EU companies

  • counter-drone projects

  • new supply chains

  • wider access to testing facilities

  • fixing certification, component and intellectual property problems

  • overcoming  shortages of skilled workers.

Learn more on ua.news

     

UPCOMING EVENTS

UPCOMING EVENTS

October 21-23
Prague
FUTURE FORCES EXHIBITION & FORUM 2026

A major international defence and security exhibition and conference, held under the patronage of the Czech Ministry of Defence and NATO. The event focuses on operational interoperability, the latest soldier equipment systems, C4ISTAR, protection against weapons of mass destruction (CBRN), and the use of robotics and autonomous systems on the battlefield.

October 29
Vilnius
GERMAN-BALTIC-UKRAINIAN DEFENCE INDUSTRY CONFERENCE 2026

Themed "United for Security – Strengthening Regional Defence Cooperation," this conference convenes high-level representatives from government, armed forces, industry, and research.

The program focuses on strategic and industrial topics, including geopolitics, drone warfare and autonomous systems, Bundeswehr–industry cooperation, defence logistics, military mobility, and financing.

Learn more on www.ahk-balt.org

November 11-12
The Hague
EUROPEAN DEFENCE INNOVATION FORUM (EDIF) 2026

Europe’s leading platform where combat-tested innovation meets capital and policy. The forum brings together key voices in defence innovation from the Netherlands, Ukraine, and other partner nations to accelerate joint production and industrial cooperation. The two-day exhibition provides the industry with a unique opportunity to showcase its developments, technological solutions, and ideas to government representatives, investors, and defence stakeholders.

Learn more on defenceinnovations.eu

November 17-18
New York
GLOBAL SPACE AND DEFENSE TECH SUMMIT

A summit organised by Deutsche Bank, dedicated to attracting venture capital and institutional capital to the space and defence technology (miltech) sector. The event brings together founders of defence start-ups, investors, technical experts and representatives of the international defence ecosystem. The main focus is on the practical aspects of transforming promising defence products into scalable businesses.

Learn more on conferences.db.com

November 19
Rotterdam
NEDS | NIDV EXHIBITION DEFENCE & SECURITY

The 37th edition of the exhibition and conference bringing together government, industry, and knowledge institutes. International exhibitors present the latest and most innovative products, solutions, and services in the defence and security sectors. Key areas cover land, air, and naval platforms, sensors, unmanned systems, cybersecurity, and space systems. November 18 features dedicated Global Matchmaking sessions, while November 19 hosts the main exhibition and plenary program.

Learn more on www.nidvexhibition.eu

November 20-21
Chernihiv
INTERNATIONAL CONFERENCE ON CYBER WARFARE, DEFENSE LAW, AND SECURITY PROTOCOLS

A specialised international conference in Ukraine focusing on the legal and technological aspects of modern cyber warfare. The event brings together cybersecurity specialists, military experts and lawyers to discuss innovations in defence law, the latest security protocols and cutting-edge technologies for protecting critical infrastructure from cyber threats.

December 1-2
Paris
TECTONIC EUROPEAN DEFENSE SUMMIT 2026

A summit bringing together military leaders, investors, start-up founders and politicians to shape the future of European defence. Key topics include the scaling up of autonomous systems, a new era of autonomous warfare at sea and in space, the development of Europe’s long-range arsenal, and the protection of critical infrastructure. Particular attention is paid to defence manufacturing, defence tech funding and Ukrainian expertise (“Made in Ukraine”).

December 2-3
London
UNCREWED & AUTONOMOUS SYSTEMS 2026

A specialist conference bringing together military leaders and defence technology experts. The event focuses on innovations in the field of unmanned and autonomous ground vehicles (UGVs), as well as on the direct impact of the experience of the war in Ukraine on their rapid development.

Learn more on www.defenceiq.com

RECENT EVENTS

September 22
ONLINE
From Ukraine to Nasdaq: IPO and De-SPAC Routes for Ukrainian Companies

IMPACTA LAW, jointly with the American Chamber of Commerce in Ukraine, hosted an online panel discussion on how Ukrainian companies can access U.S. public markets, attract international investment, and pursue global growth while the war continues. 

Following Kyivstar's landmark Nasdaq listing in August 2025 and the subsequent IPO of Ukrainian defence technology company Swarmer, the discussion moved beyond whether Ukrainian businesses can go public in the U.S. to the practical question of what it takes to get there. 

The panel brought together representatives of Kyivstar and Cohen Circle, alongside U.S. and Ukrainian legal advisers, to examine the opportunities, requirements, and challenges of taking a Ukrainian business public. 

June 24–26
Gdańsk
Ukraine Recovery Conference 2026

The Ukraine Recovery Conference 2026 in Gdańsk addressed both Ukraine’s reconstruction agenda and the growing role of defence tech in the country’s resilience and long-term security. Alongside discussions on recovery, investment and infrastructure, the conference highlighted Ukrainian innovation, battlefield-tested technologies and international partnerships as essential elements of Ukraine’s future capacity.

IMPACTA LAW also co-organised an official side event during URC 2026, contributing to the wider dialogue on Ukraine’s recovery, investment and long-term strategic cooperation with international partners.


June 24–26
online
Joint webinars with TEGOS

IMPACTA LAW and TEGOS held two joint webinars focused on practical defence-sector cooperation between Ukraine and the Baltic states. The first session introduced Baltic businesses to opportunities in Ukraine’s defence industry, covering key legal and regulatory aspects of operating in Ukraine, including UBO disclosure, Defence City and Diia City regimes, procurement, workforce reservation and the “Build with Ukraine” framework.

The follow-up webinar shifted the focus to Ukrainian defence and technology companies entering the Baltic market, with practical guidance on defence procurement, offset requirements, licensing, foreign investment screening, security clearance and financing aspects in Estonia, Latvia and Lithuania.

Learn more about the first and second events

March 26
Düsseldorf
Frontline Innovation - Opportunities in Ukraine & the Baltics 2026

Organised by IHK Düsseldorf, Frontline Innovation brought together industry, government and innovation leaders to discuss defence-tech business opportunities, with a focus on Ukraine and the Baltics.

Dmytro Marchukov attended the event, which addressed market developments, frontline innovation, export controls, financing and ecosystem-building for security and dual-use technologies.

Learn more on www.ihk.de