Ukraine's costly gambit: £578 million lost on undelivered arms
Documents obtained by the "Financial Times" reveal that Ukraine spent hundreds of millions of dollars on weapons it never received. Ammunition suppliers from Arizona, arms companies with past involvements in Syria, and start-ups from Virginia Beach secured contracts worth millions.
Ukraine, in its fight for survival, was compelled to abandon standard procedures and engage in risky million-dollar transactions with intermediaries. Many of these intermediaries were lesser-known entities, often lacking backing or certifications. Consequently, Ukraine lost £578 million in deposits, as the weapons never reached the frontline, reports the "Financial Times".
An illustrative case is that of 28-year-old American Tanner Cook from Arizona. Until recently, he managed a small ammunition shop. In 2022, he signed a contract with Ukraine worth £42 million, promising the delivery of shells and mortar mines. He received a £14 million advance, yet the equipment was not delivered, and the money was not returned.
Chaos in Ukraine's armament dealings
A similar incident involves the American company Regulus Global. In 2022, it was meant to supply Ukraine with 155 mm calibre ammunition valued at up to £1.2 billion. Spetstechnoexport, the state-owned Ukrainian intermediary, transferred over £120 million to Regulus. The company claims it invested in the supply chain, but according to Kyiv, some of the funds were used contrary to the agreement. The case is currently in arbitration in London.
In a market where every month's delay could spell defeat on the frontline, traders dictated terms. "I have it in stock. Buy it or I’ll sell to your enemy," is how former Defence Minister Oleksii Reznikov describes their approach. Price increases resembled the frenzy seen in the early days of the COVID-19 pandemic. Soviet-calibre ammunition prices quadrupled within a few months.
As noted by the "Financial Times", the chaos was exacerbated by corruption and poor coordination on the Ukrainian side. Dozens of contracts are currently under investigation, and several former officials have already been charged. The new head of the Defence Procurement Agency, Maryna Bezrukova, attempted to streamline the process but was dismissed, allegedly for excessive "disclosure" of tender data.
