A Financial Times investigation found that since 2022, Ukraine has lost $770 million in advances for weapons that foreign suppliers never shipped. In total, Ukraine has spent $6-8 billion from its own budget on weapons.
The Financial Times investigation is based on leaked Ukrainian government documents, court documents and dozens of interviews with procurement officials, arms dealers and manufacturers, as well as detectives.
After the invasion began in 2022, Ukraine scrapped standard procurement rules. Civil servants were tasked with urgently sourcing weapons, often through intermediaries. High demand and low supply have driven up prices and deliveries have been delayed or nonexistent.
Thus, in April 2022, Ukrspetsexport purchased mortars in Sudan from sellers associated with the FSB and the PMC “Wagner”. Ukraine purchased 120-mm mortars from this seller.
In addition, in several cases, Kyiv paid large amounts of money in advance to little-known companies for materials that have never been received. In 2020, Tanner Cook from Arizona opened an ammunition store, OTL Imports. In 2022, he signed a contract for €49 million to supply ammunition to Ukraine and received an advance of €17.1 million. After concluding the deal with Ukraine, Cook seems to have expanded his business far beyond Arizona. At the same time, Kyiv says that it never received the ammunition, Ukraine won an arbitration in Vienna, but the money was not returned.
Cookʼs OTL Imports has partnered with Ukrainian state-owned Progres, which imports and exports weapons for Ukraine, for the first time. The meeting was arranged by American-Ukrainian businessman Mykola Karanko, who was previously involved in a major arms deal between Progres and Iraq in 2009. That deal ended in a court ruling that ordered Ukrainian intermediaries to pay more than $60 million to the American businessman for being excluded from the deal. Karanko was accused of trying to bribe Iraqi officials.
Cook said he was able to buy the ammunition from a Serbian manufacturer and received an advance payment of $17.1 million. However, according to Ukrainian officials, OTL never delivered the shells or returned the money. According to a report by the State Bureau of Investigation of Ukraine, OTL did not have the necessary certificates for the export and transportation of ammunition.
After the deal, Cook expanded the business beyond Arizona, attending international arms fairs. Progres said it had won its case against OTL in international arbitration and is seeking €21.3 million, including an advance, legal costs and penalties.
OTL is under investigation in Ukraine. The National Anti-Corruption Bureau has confirmed the investigation, but no charges have been filed. The companyʼs lawyers deny wrongdoing.
This deal with OTL is one of at least 30 deals Ukraine has made with foreign arms suppliers, under which the state spent money on ammunition that was not delivered or was unusable.
The case of Regulus Global
The American company Regulus Global signed a contract worth up to $1.7 billion with the state-owned foreign trade company Spetstechnoexport to supply tens of thousands of 155-millimeter artillery shells, some of which were produced in a country with close ties to Russia.
The Ukrainian side paid an advance of $162.6 million and €14 million, but accused Regulus of non-fulfillment of the contract and non-return of funds. Kyiv says that since September 2024, Regulus has stopped communicating with Spetstechnoexport.
Ukrainian officials believe the company used the advance payment to purchase production facilities. Spetstechnoexport has initiated arbitration proceedings to collect the debt.
At the same time, Regulus claims that the Ukrainian company did not pay the agreed advance payment of about $500 million and paid only about $100 million. Regulus claims that it supplies ammunition and invests in production and logistics. According to Regulus, it owes Ukraine about $350 million, which Spetstechnoexport denies. The Ukrainian side has appealed to the Pentagon and the US Embassy. Spetstechnoexport’s arbitration claim in London demands the recovery of $346 million.
One of the contracts that former official Bezrukova decided to block involved an agreement between the American company Regulus and the state-owned company Spetstechnoexport. Last September, Regulus wanted to transfer the contract from the state intermediary to its agent, but Bezrukova stopped it. According to her, Regulus asked for another advance payment, although part of the money had already been paid earlier.
“The advance payment has already been partially transferred by Spetstechnoexport, and paying for the same goods a second time is simply wrong,” she said.
Regulus denies this. They say they did not ask for double payment, but simply wanted to avoid delays in the delivery of ammunition to Ukraine.
This was not the first time Ukraine had worked with the company. Company founder Somerindijk told the Financial Times that after Russia’s full-scale invasion began in 2022, Ukrainian officials began calling him asking for help with weapons to defend the country. They asked what kind of weapons could be obtained and how quickly they could be delivered. According to Somerindijk, he immediately agreed to help because it was personal to him: his wife is Ukrainian, and her family lives in Ukraine.
Already in the summer of 2022, Regulus delivered several An-124 cargo planes to Ukraine with BM-21 armored vehicles firing Grad rockets and shells for Soviet-model D-20 howitzers. According to the company itself, in 2023 it was able to send 70,000 155-mm artillery shells to Ukraine.
Therefore, when there was a shortage of ammunition in the world, Ukraine agreed to the offer to supply 155-millimeter artillery shells, for which it made an advance payment, but ultimately did not receive them.
In addition to problems with advances and weapons deliveries, officials say there have been cases where weapons have been sold at greatly inflated prices due to strong global demand. Prices in the arms industry have soared, but the weapons themselves have often arrived in such a state that they were unusable. At the same time, some foreign arms companies say they have fallen victim to internal divisions and corruption by Ukrainian officials and state arms dealers, which may account for some of the missing millions.
Ukrainian law enforcement is investigating dozens of contracts with foreign intermediaries and has opened criminal cases against former officials, but no charges have been filed yet.
The FT writes that detectives claim that some senior officials conspired with foreign intermediaries to embezzle money. The investigation is complicated by slow international cooperation. Some foreign brokers have stopped working with Ukraine because of bureaucracy. Activists believe that abandoning intermediaries will reduce prices and improve procurement conditions. At the same time, some Ukrainian leaders believe that intermediaries are important for uninterrupted supplies because of their financial and logistical risks.
In total, the Ukrainian Defense Ministry says it is collecting $309 million in advance payments from foreign suppliers through the courts for contracts it no longer considers invalid. It hopes to recover the remaining money, approximately $460 million, through pre-trial negotiations with suppliers.
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