Ministry of Defence strengthens requirements for defense contractors

The Ministry of Defense of Ukraine has strengthened requirements for defense contractors who have outstanding debts in enforcement proceedings and for whom enforcement actions are suspended during the period of martial law.

An additional criterion has been introduced for determining such enterprises: the volume of production of defense-related products, execution of works, and provision of services must exceed 50 percent of the enterprise’s total production volume for the latest reporting period.

The relevant changes were introduced in December 2025. At the initiative of the Ministry of Defence, the Cabinet of Ministers of Ukraine adopted a resolution regulating the Procedure for Determining Defense Industry Enterprises that Are Debtors in Enforcement Proceedings and for Whom Enforcement Actions Are Suspended During Martial Law (hereinafter – the “Procedure”).

The Ministry of Defense of Ukraine received the relevant authority following the dissolution of the Ministry of Strategic Industries of Ukraine. Practical application of the provisions of the Procedure demonstrated the need to amend it so that the amendments more clearly emphasize that the Procedure applies specifically to enterprises whose principal activity is the defense-related production of goods, the execution of works, and the provision of services. Therefore, specialists of the Ministry of Defense of Ukraine developed the corresponding amendments to the regulatory and legal framework.

From now on, a defense contractor must simultaneously meet three criteria:

1. The enterprise is engaged in the performance of a state contract (agreement) concluded with a state customer in the defense sector, with a state customer service, or is involved based on agreements, including foreign economic agreements (contracts), to execute such a state defense contract (agreement);
2. Inclusion of an enterprise in the electronic register of selection participants and contractors of state contracts (agreements);
3. The volume of production of goods, execution of works, and provision of services that are defense-related exceeds 50 percent of the enterprise’s total output of goods, execution of works, and provision of services for the latest reporting period.