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Ukraine to adopt new transparency laws to fight corruption in Defense Ministry

On 5 February, Ukrainska Pravda citing its own sources reported that the Minister of Defense Oleksii Reznikov, involved in a food procurement scandal, would likely be summoned this week.

In January, Ukrainian journalists of ZN.ua reported that the Defense Ministry had allegedly purchased products for the Ukrainian Army at inflated prices through a “gasket” company.

The media outlet claimed that eggs were contracted at a 2.5 times higher price than current supermarket prices in Ukraine, potato procurement prices were 2.6 times higher, and other products were on average 1.4 times costlier.

Speaking at a session in parliament, Reznikov explained that prices in the contract also include delivery of the products to the frontline and fuel regardless of the inflation rate in the country.

Reznikov also said that the most outrageous price for eggs shared by journalists was a “technical mistake” since what journalists published was a draft contract and several prices were corrected there later.

A series of accusations of corruption within the Ministry of Defense led to the resignation of Deputy Minister Vyacheslav Shapovalov, who was responsible for supplying troops with food and equipment.

Oleksii Reznikov’s removal amid a wave of criticism in Ukraine’s society might have been the highest-profile government change since the launch of the anti-corruption drive which left six deputy ministers and five heads of regional military administrations without their jobs.

While apparently, the Ukrainian government is trying to quickly restore public faith through the resignations of top officials, the entire system of procurement needs to be rebooted.

Before the full-scale war, all Ukrainian state procurement was conducted through the Prozorro system. It allowed the opening of procurement auctions where any company can apply, proposing lower prices than competitors. Prozorro removed corruption risks related to state procurement from companies linked to the government.

With the start of the invasion, the system was temporarily closed for military procurement to not allow Russians to spy on the number of military goods purchased by Ukraine. Civic activists criticized the step, as it made corruption risks possible again.

In order to ensure transparency in food procurement, the Ukrainian parliament drew up a bill that would make it obligatory for details on products and services purchases for the army to be made public on Prozorro, except for arms purchases, head of the parliamentary committee for anti-corruption matters Anastasia Radina said.

The legislation has been sent to parliament for discussion and would need to be approved before being signed into law by the president, Reuters reported.

Meanwhile, the head of Zelenskyy’s parliamentary bloc David Arakhamia, reversed his earlier comment on transferring Defense Minister Oleksiy Reznikov to the post of minister for strategic industries, saying on Telegram that “there will be no personnel changes in the defense sector this week.” Earlier, the top Zelenskyy ally claimed that Reznikov would be replaced by the Head of Ukraine’s military intelligence Kyrylo Budanov.

On 6 February, Oleksii Reznikov dismissed the claims about his imminent resignation and admitted the need to implement mechanisms to ensure that Ukraine’s soldiers were properly equipped. He suggested creating a website similar to the state procurement platform – Military Prozorro.

According to the minister, the new open-source system would contain the number of products and prices but would hide the legal addresses and locations of the supplying companies.

Moreover, the Ministry of Defense together with anti-corruption activists will create an advisory body to receive expertise from the public. To avoid the monopoly in food procurement Verkhovna Rada will establish seasonal purchases, Reznikov added. First Vice Prime Minister Yulia Svyrydenko has confirmed that the new legislation would come into force in spring 2023.

“Our key priority now is the stable supply of Ukrainian soldiers with all they need,” the minister stated.

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