Instead of a comprehensive audit – fragmented puzzles: how ordinary purchases of an aviation enterprise became the basis for accusations

In wartime, the aviation industry plays a critically important role in strengthening the country’s defense capabilities. At the same time, the research and production company LLC “MS AVIA-GRADE”, which fulfills the most complex orders for defense needs, found itself at the center of accusations of alleged money laundering through cooperation with four suppliers. The company states that all purchases were made in accordance with the law, have full documentary confirmation, but no requests or inspections were received, and the conclusions of law enforcement officers are based not on verified facts, but on fragments of bank statements and assumptions, writes UNN.

DetailsRecently, UNN investigated the story of why two modernized helicopters lost their weapons – due to technical disputes, arrests, and a lack of coordinated state communication. As it turned out, the key barrier was Soviet standards, by which the results of modern modernization are still evaluated. However, this is only one of many challenges faced by Ukrainian aviation enterprises in wartime. In addition to fighting regulatory obsolescence, companies also have to protect their reputation – even in situations where it comes to ordinary economic activity.

Thus, the research and production company LLC “MS AVIA-GRADE” was accused of alleged money laundering through operations with four counterparties. The main “evidence” in the case was a study prepared by the State Tax Service of Ukraine under the leadership of the then acting head of the department, Tetiana Kiriyenko. The document was prepared in May 2024 at the request of the Security Service of Ukraine. At the same time, the company states that it was about ordinary economic activity, all operations are documented, and no requests or inspections from controlling or law enforcement agencies were received.

We purchase about 6-7 thousand items of components – from rivets and rubber products to large units. Standard small components do not require a tender, because they are freely available. They are easy to find online, and there are suppliers who have specialized in such categories of goods for years. Instead, large products, so-called “heavy units” – nodal parts for helicopters – are complex products that cannot be found freely available. We put such positions through ProZorro to see potential suppliers even at the selection stage

All purchases go through a full tender process: commercial offers are collected, conditions are compared, and a supplier is selected based on price, quality, and delivery time criteria. After that, the company does not interfere in the counterparty’s further activities – where and how it buys products and pays taxes is its responsibility. The main task of the customer is to receive quality products on time and at an optimal price. All delivered products undergo incoming control and, if necessary, are returned to the supplier.

Of the four companies, cooperation with which was interpreted as money laundering, two were selected based on the results of an internal tender – we collected documents, received commercial offers, and determined the winner. Two more companies went through an open tender procedure through the ProZorro system, where we are registered as a customer and regularly publish technical requirements for products. After selecting the winner, engineers agree on technical details, a contract is concluded, and ordinary economic work begins.

“MS AVIA-GRADE” explains that after winning the tender, the supplier provides a full package of documents: certificates of no criminal record, no tax arrears, anti-corruption declarations, and an updated commercial offer. All this is attached to the contract.

The company emphasizes that it strives to maximize the transfer of purchases to an open format through the ProZorro system, but for the aviation sector, this is not always easy. Units and nodal parts are complex technical products that are not freely available. Finding suppliers requires time, technical expertise, and coordinated work of engineers who coordinate specifications, evaluate conditions, and organize supplies.

Regarding financing, a model with 50% prepayment and final settlement after delivery is usually used. In cases where the goods are in stock, suppliers sometimes agree to shipment without prepayment. If the end customer delays financing, the company agrees on a deferral – the goods are transferred on credit, and payment is made later. Therefore, separate debt to suppliers may exist, but all obligations are fulfilled on time. Processes remain controlled, and the company’s work is stable and coordinated. In the case of the four counterparties involved in the case, the products were delivered, and payment for them was fully made. Further use of funds by suppliers, including issues of their reporting or tax payment, are not within the competence of “MS AVIA-GRADE” and cannot be the subject of the customer’s responsibility.

In the context of accusations of money laundering, we have not received any requests for documents or explanations. We have not received any inquiries regarding clarifying the circumstances, whether such suppliers actually existed, whether shipments were made, or whether commodity-transport invoices exist.

The company explains that instead of requests or inspections, bank statements were used – only from one bank and only partially, without full coverage of financial operations. In some cases, 50% of the payment was taken into account, in others – 30%, elsewhere – 20% or slightly more. These fragments were combined, and on their basis, a conclusion was made about the alleged lack of documentary confirmation of payment and product delivery.

At the same time, as emphasized by “MS AVIA-GRADE”, the situation generally did not take into account that the mentioned companies are not registered as VAT payers and, in accordance with the law, are not obliged to generate tax invoices until the end of the tax year. Because of this, relevant entries may be missing in the relevant registers, which led to a false conclusion about the absence of trade turnover – despite the fact that it is only about financial transactions recorded in bank statements transferred to the SBU.

The essence of the accusation boils down to the fact that our counterparties allegedly did not pay taxes. But we are not obliged to control this – this is not our function. We are not a controlling body and cannot interfere in the activities of suppliers. Our task is to receive quality goods on time at an optimal price.

“MS AVIA-GRADE” emphasizes that it does not carry out any non-commodity operations: all agreements are confirmed by a full package of primary documentation – commodity invoices, transport accompanying documents, etc.

At the same time, the company emphasizes: any actions of counterparties after receiving payment – submitting reports or paying taxes – are not the responsibility of the customer if he does not have control over the relevant companies. And there is no evidence in the case materials that “MS AVIA-GRADE” had such control over the four counterparties.

Thus, the conclusions drawn are based not on verified facts, but on formal assumptions. The company believes that such an approach is not only legally vulnerable but also creates reputational pressure on businesses that operate openly and perform critically important tasks in the interests of the country’s defense.

In summary, “MS AVIA-GRADE” emphasizes that the situation is a consequence of superficial analysis and the lack of proper dialogue from the controlling authorities. The company operates within the law, conducts purchases transparently, fulfills all contractual obligations, and is ready to defend its position by providing a full documentary base. Under such conditions, the question arises why attention is focused not on facts, but on the tax behavior of third parties, which the company is not obliged to control. According to the enterprise, such situations should be considered taking into account industry specifics, and state supervision should be based on real data, not formal constructions, especially in wartime.

RecallTwo Ukrainian Mi-8MT helicopters were modernized by “MS AVIA-GRADE” under a state contract, with the installation of weapon systems, protection, onboard electronics, beam holder farms, as well as ADROS KT and KUV complexes, which provide protection against guided missiles. The equipment was purchased through Prozorro and passed military acceptance. One of the helicopters successfully flew more than 80 hours in combat conditions without any technical remarks, the other was on combat duty. After the inter-repair resource was exhausted and the machines were sent for overhaul, the installed weapons were dismantled and subsequently seized by court order – despite the fact that the equipment met current Ukrainian standards. The contractor company was not allowed to participate in reclamation procedures, which made it impossible to fulfill guarantees. The reason for recognizing the equipment as “non-authentic” was its comparison with Soviet-Russian GOSTs, and not with Ukrainian technical specifications. The situation caused a significant resonance due to the threat of losing the combat capability of the equipment during the war.