Ukraine has lost hundreds of millions of dollars in failed arms deals: Report

An investigation has found that hundreds of millions of dollars Ukraine spent on foreign arms intermediaries to acquire military equipment have been wasted over the past three years.

Citing government documents, court files and interviews with officials, the Financial Times reported on Friday that Ukraine has paid $770 million in advance to foreign arms dealers for weapons and ammunition that have not been delivered to date.

It identified some three dozen problematic contracts with weaponry producers.

In some cases, it was noted, Ukrainian officials paid large sums in advance to little-known companies for munitions that had not yet been delivered due to the increase in global demand. However, some arms manufacturers argue that they are victims of corruption by Ukrainian officials. 

The newspaper gave detailed information about two botched arms deals with unknown American and European gun dealers.

In one arms deal, a specialty importer company, Progress, signed a contract with an American ammunition store, OTL Imports, from Arizona.

US, Ukraine sign long-awaited deal pushed by Trump on rare minerals

The US and Ukraine have signed a long-awaited deal on rare minerals pushed by Trump to purportedly help Kiev boost its defense and start reconstruction.

The company's founder, 28-year-old entrepreneur Tanner Cook, was introduced to Progress by another businessman who had previously helped the state-owned enterprise organize a major deal with Iraq in 2009.

The young American gun dealer had promised Ukrainian officials he could bring shells and mortar shells from a manufacturer in Serbia. In November 2022, Ukraine paid him 17.1 million euros in advance (35 percent of the contract amount), but did not receive the ammunition.

The deal has been referred to the National Anti-Corruption Bureau of Ukraine, which is trying to track down where the money paid to the company went.

Progress won the arbitration proceedings against OTL in Vienna. The award provides for the recovery of €21.3 million from the company, which includes an advance payment, as well as legal fees, interest and penalties. The state-owned enterprise is now trying to secure the recognition of this arbitration award in the United States.

US readies first arms sales to Ukraine after minerals deal

The Trump administration is making preparations for its first sale of military equipment to Ukraine.

In the meantime, Cook used the money obtained from the Ukrainian contract to grow his business, traveling to international arms exhibitions to find more deals.

In another failed arms deal, Ukrainian officials wanted to purchase old stockpiles of ammunition from former Soviet states.

They signed an ammunition deal with the American Regulus Global, founded by former Merrill Lynch broker Will Somerindyke in 2012. The company was engaged in searching for and buying back old stockpiles of weapons.

Months after war broke out in the former Soviet republic in 2022, Regulus Global approached Spetstechnoexport with an offer to sell tens of thousands of 155 mm artillery shells.

The offer was particularly valuable because the ammunition was to come from a manufacturer in a country with close ties to Russia.

Ukrainian officials closed a deal worth up to $1.7 billion, depending on the volume of the deliveries.

In advance payments, Spetstechnoexport paid Regulus $162.6 million to fulfill its part of the contract.

Regulus, however, violated the terms of the contract and did not return the money.

The guns dealer then ceased all contact and stopped responding to letters.

In an effort to recover the money by court complaint, Spetstechnoexport lodged an arbitration claim in London, UK.

In the meantime, the United States, Germany and Poland, respectively, have been the biggest arms suppliers to Ukraine from 2019 to 2023.

During this period, Ukraine’s share in global arms imports has shown a significant expansion, showing a record growth of 6,633 percent.

The US claims it has provided Kiev with $300 billion-plus in military support.

Earlier this month, Washington announced that it is making preparations for more sale of military equipment to Ukraine.

Press TV’s website can also be accessed at the following alternate addresses:

www.presstv.ir