Ukraine paid $770M upfront to foreign weapon suppliers for products that were never delivered.

Since the beginning of the full-scale Russian invasion, Ukraine has paid approximately $770M to foreign intermediaries for arms and ammunition that have never been delivered. Notably, the specialized importer Progress entered a contract with the US ammunition supplier OTL Imports, for which Ukraine paid €17.1M (35% of the total contract value) in November 2022, and have never received the shells or mines.

Progress successfully won an arbitration case against OTL in Vienna, resulting in an order for OTL to repay €21.3M (this total includes the advance payment, legal expenses, interest, and penalties). The state-owned enterprise is currently working to have this arbitration ruling recognized in the US.

Another unsuccessful agreement was made with American Regulus Global for roughly $1.7B, where the Ukrainian state-owned company provided an advance of $162.6M and €14M.

Several Ukrainian officials linked to these contracts are now under investigation. Many of these problematic arrangements were established without proper due diligence, owing to inadequate internal controls over transactions and a rush to secure funds.