Aviation enterprises should be included in Defence City, criteria need to be softened – Hudymenko

The Defence City bills, in their current form, unfairly exclude aircraft manufacturing enterprises from the list of potential residents; the selection criteria need to be softened. This was stated in an exclusive comment to UNN by Yuriy Hudymenko, head of the public anti-corruption council at the Ministry of Defense of Ukraine.

DetailsToday, the Verkhovna Rada Committee on Finance, Tax and Customs Policy plans to consider draft laws that provide for amendments to the Tax and Customs Codes of Ukraine and are part of the Defence City package. The Ministry of Defense of Ukraine will be responsible for forming the list of Defence City residents according to clearly defined criteria. Among them, for example, is the requirement that 90% of the enterprise’s contracts must be in the defense sector. 

Yuriy Hudymenko is convinced that aviation industry enterprises must definitely be included in Defence City.

I know for a fact that at least one enterprise (of the aircraft manufacturing industry – ed.) is currently working for the defense industry in a high-tech field, at least one! Therefore, without a doubt, it, at least, has the right to be included there. Of course, our aircraft manufacturing must be on the list 

According to him, there is currently a lack of proper communication during the preparation of the bills, in particular with the Ministry of Strategic Industries, to which most Ukrainian aircraft factories are subordinated.

The criteria there need to be softened and changed. There are too many criteria… From the current bills, it follows that in order to become a participant in Defence City, 90% of everything the company produces in the last year must go to the defense industry. Of course, with large companies, such as airlines, this will not be the case. Because the company does something for the front, and something for civilian customers, something for B2B (business-to-business – ed.), something abroad. If companies were ready for such changes, they would probably allocate a subsidiary from their structure that would deal only with defense. This subsidiary would enter Defence City and receive appropriate privileges. Everything would be great, but no one knew about it 

RecallIn the current version of the Defence City bills, the aircraft manufacturing industry may find itself outside the scope of new benefits and preferences. As Ruslan Melnychenko, head of the legal committee of the Aerospace Association of Ukraine, explains, none of the specialized enterprises — including “Antonov” or “Motor Sich” — meet the proposed inclusion criteria, as they produce not only defense but also civilian products.

The Association proposes to include in the list of Defence City residents enterprises from the existing government list of aircraft manufacturing entities that undergo strict verification. Experts also insist on lowering the requirement for the share of defense products — from 90% to 50%.