Problem

From the Soviet era, Ukraine inherited a huge military-industrial complex, as well as a network of state-owned enterprises tasked with providing logistical support to the army. At the same time, the difficult economic situation in the 1990s and early
2000s made it impossible to keep defense enterprises busy with the necessary volumes of state orders for their development. The absence of proper privatization and corporate governance reforms meant that not all state-owned defense enterprises were able to reorganize their production processes for the private and export markets. These factors led to the gradual economic decline of many state-owned enterprises.
The absence of a systemic policy in the defense sector regarding the inventorying of state property has led to the fact that land, assets, production facilities, leisure and recreation centers, and other property have become the target of corruption offenses.
A similar situation exists with the storage and protection of intellectual property at state-owned enterprises of the defense industry. Unique designs became the property of private and foreign entrepreneurs through dubious contracts. Ukraine has not created a unified digital register of intellectual property of the defense industry, which would be appraised and protected from unauthorized transfer to third parties.
Another problem for the defense sector was uncontrolled fuel consumption. The mechanisms for distributing and controlling the use of fuel and lubricants in the Armed Forces are cumbersome and outdated and do not envisage the use of modern electronic fuel accounting.