Millions for weapons that never existed: Ukraine investigates scandalous contract

Ukraine's State Financial Monitoring Service and State Bureau of Investigations are examining suspicious Ministry of Defence contracts. As a result of questionable deals, $33 million was transferred from the budget for the purchase of ammunition and military equipment, but a significant portion of the deliveries never took place.

Czech contractor and frozen millions

The key figure in this case is the Czech company PAMCO INT a.s., which received an advance payment from the Ukrainian state company Ukrspecexport but virtually failed to fulfil its obligations.

Czech financial regulators flagged suspicious transactions and froze part of the funds in the company's accounts. In turn, Ukraine is preparing a request for their seizure.

Billion-dollar contracts and their non-fulfilment

According to the investigation materials, on 13 April 2022, Ukrspecexport signed two state contracts with Ukraine's Ministry of Defence for the purchase of weapons:

• Contract No. 403/1/22/121 — purchase of ammunition worth 679.8 million hryvnia (~$22.5 million).
• Contract No. 403/1/22/122 — supply of military equipment worth 317.8 million hryvnia (~$10.4 million).

Twelve days later, on 25 April 2022, Ukraine transferred 100% of the advance payment to the Czech contractor — $32.9 million. However, actual deliveries were far from the declared volumes:

• Only 4.8% of the ordered ammunition was delivered.
• Military equipment was not delivered at all.
• The transferred funds ended up in offshore accounts.

Money went in an unknown direction

The investigation established that instead of fulfilling the contract, the company PAMCO INT a.s. directed the received funds to third-party accounts, raising suspicions of fraud.

• $7.94 million was transferred to the company S LUX d.o.o.
• $11.08 million was exchanged into another currency and distributed across accounts of PAMCO INT a.s.
• €16.2 million (≈$17.5 million) was transferred to another account of the same company.

In effect, Ukraine paid tens of millions of dollars for weapons it never received.

Ukraine demands return of funds

Taking into account the circumstances identified, Ukrspecexport filed a report with the Prague police regarding possible fraud and embezzlement of funds on a particularly large scale.

Ukraine's financial intelligence unit also initiated an audit and requested Czech authorities to block suspicious assets. As a result, in November 2023, $14 million was frozen in PAMCO INT's accounts, which may be returned to Ukraine.

Ukrainian investigators are preparing an international request for the seizure of these funds and are continuing to examine the possible involvement of other companies and officials in the scheme.

Link to 'Ukrainska Bronetekhnika' and Pashynskyi

As part of the investigation, funds belonging to Vladyslav Belbas, head of the company Ukrainska Bronetekhnika, were also seized.

The company was established in 2001 and for a long time was controlled by business structures linked to former MP Serhiy Pashynskyi, who previously headed the parliamentary committee on national security and defence.

According to information from the detective agency ABSOLUTION