No investigation without the Prosecutor General’s consent: how jurisdiction over the defense industry is changing
3 July 2025 12:22
“Defense procurement” is defined as: weapons, military/special equipment, ammunition (including classified ammunition), as well as development, repair and modernization.
Article 96 is supplemented by part 4: enterprises from the list of defense industry are protected from criminal measures, even if the offenses occurred before their inclusion, but already during martial law. After the exclusion, standard rules apply, "Komersant Ukrainian" reports
Article 616-1 “Peculiarities of Criminal Proceedings in the Defense Industry” will be added to the Criminal Procedure Code:
1.During martial law and 3 years after – a special investigation regime.
2.Only the Prosecutor General (or his deputy) can enter information into the Unified Register of Possible Crimes.
3.Investigators must check whether the company is on the list of the defense industry and attach confirmation to the materials.
4.Motions for arrest, searches, restrictions of rights, etc. are subject to the approval of the Prosecutor General only, and are considered by an investigating judge with the participation of the suspect/defense counsel; the decision may be appealed.
5.Suspicion can be notified only after the Prosecutor General’s consent.
6.If measures have already been taken prior to inclusion (e.g., arrest or suspension), the company may file a request for review, and the Prosecutor General must decide within 5 days.
7.If other criminal law measures (e.g., a ban on activities) have been applied to the listing and the term has not yet expired, the court must terminate them upon motion within 5 days.
Defense City in Ukrainian
One of the four draft laws submitted to the Verkhovna Rada provides for the creation of a special regime – Defence City – aimed at supporting defense industry enterprises, according to the chairman of the Committee on Finance, Taxes and Customs Policy, Danylo Hetmantsev.
A list of defense industry enterprises – residents of Defense City is being created. The list is maintained by the Ministry of Defense. Data about them is restricted.
Residents are granted tax benefits for 10 years:
- income tax exemption (subject to reinvestment),
- land tax exemption,
- exemption from real estate tax,
- exemption from environmental tax.
Additional benefits:
- vAT benefits and accelerated depreciation;
- benefits for employees of relocated companies;
- simplification of customs procedures and export control;
- support in relocating production facilities;
- guarantees of protection in criminal proceedings;
- the possibility of special currency conditions determined by the NBU.
According to Mr. Hetmantsev, the defense industry should become an engine of economic development and make a name for itself in the international arms market.
Corruption risks
Lawyers emphasize that the draft law removes the defense industry and its employees from criminal liability. Even if they disrupt procurements or buy parts at inflated prices, only the Prosecutor General will be able to bring them to justice:
“Only the Prosecutor General can initiate any investigation into these companies. In fact, a certain indulgence is given… now it will be difficult to initiate proceedings even if there is evidence,” says lawyer Roman Lykhachov.
The positive thing is that unfounded cases will not interfere with the work of the defense industry, but there are risks of abuse that will remain uninvestigated. It is important that this is a matter of state secrets, and if the materials are “walking around” in offices, the risk of information leakage increases:
“It will be promising to get on this list. …Only he [the Prosecutor General] will decide who to bring to justice… This is not quite right. Theoretically, corruption can be used to get on the list, and the draft law says nothing about the mechanism of protection against corruption… it needs to be finalized,” Likhachev adds.
MPs plan to adopt this and other draft laws of the Defence City package on July 15. We’ll see if there will be any changes.
Author: Alla Dunina
