Making the system work: security assistance to Ukraine, 2014-2017
"Russia over the last decade or so has used another foreign policy weapon. It uses corruption as a tool of coercion to keep Ukraine vulnerable and dependent. So pursue those reforms to root out corruption. It’s not just about good governance. It’s about self-preservation. It’s about your very national security."
- Joe Biden, Former US Vice President (quoted in The Atlantic)
After the Russian annexation of Crimea in 2014 and breakout of the separatist conflict in the east of Ukraine, Ukrainian armed forces received significant assistance from European and North American partners. By the summer of 2016, 18 countries provided non-lethal aid to Ukrainian armed forces, with others offering lethal aid as well.[i] Provision of significant amounts of assistance has continued since then, with top donors – the United States, United Kingdom, and Canada – transferring equipment, deploying advisers to assist with reform of the Ukrainian defence forces, and providing training to selected Ukrainian units.
Security assistance providers, however, have had to contend with widespread corruption in Ukrainian armed forces that threatened diversion of resources and made assisting the military – struggling with effectiveness and morale – a difficult undertaking. In response, some security assistance providers resorted to unorthodox means of delivering items to frontline troops (including civil society organisations and volunteers) and others pressed for systemic reform to curb corruption.
Donor interviews, however, indicate positive shifts between 2014 and 2017, with greater appreciation of the need for monitoring and improvement in Ukrainian systems. More rigorous processes and monitoring have reduced the risks of small-scale misappropriation and sale on the black market, for example. But challenges do remain: some monitoring processes still work slowly, which delays end-use reporting and makes it more difficult to track training or equipment provided. Reform of the Ukrainian defence sector as a whole – from high-level planning to access to information and governance of the state-owned defence companies – has also stalled, influencing Ukraine’s ability to resource and govern its armed forces.
Assisting the armed forces of aligned nations can be beneficial to both donor and recipient. What is known as ‘security assistance’ in the US, ‘defence engagement’ in the UK, and ‘military aid’ in Canada, can help allies address shared threats; foster cooperation and interoperability; share resources; and build up the capacity of partner armed forces. The components of security assistance usually include donations and sales of equipment, training of partner militaries, and provision of advisers; less often, assistance can also entail direct cash transfers.
After the annexation of the Crimea and the outbreak of the separatist conflict in eastern Ukraine, donors offered training to Ukrainian units and transferred equipment, from winter boots to bullets and night-vision goggles. They also put in place advisory groups meant to help push for anti-corruption and efficiency reforms. Started in 2014, these efforts are ongoing at the time of writing.
Key corruption pathways and consequences to the mission
- Resource diversion and corruption in asset management: fraud and theft of resources along the supply and logistics chain prevented security assistance items – from winter boots to bullets – from getting to frontline troops, rendering security assistance ineffective, doing nothing for the morale of the Ukrainian Army, and potentially enriching corrupt networks.
- Relations with the recipient government – state capture and high-level political corruption: corruption at the top of the Ukrainian state resulted in an ineffective, ill-equipped military struggling to absorb, retain, train and equip conscripts. It produced an institution that was less able to absorb security assistance and put it to good use. It also meant that donor assistance was in effect used to perform functions that should have been performed by the state, while benefits from state activities were at risk of being diverted to corrupt networks.
Efforts to mitigate corruption
- Cooperating with civil society: worried about diversion of equipment, some donors relied on volunteers to deliver supplies to frontline troops, bypassing military channels. While effective in diminishing short-term corruption risks, it could only be a temporary backstop.
- Applying conditionality: donors, especially the US, have pushed – officially and unofficially – for improvements in Ukrainian tracking and monitoring systems that could ensure security assistance items making their way to the correct recipients. In some cases, delivery of security assistance was delayed until required conditions were implemented. In 2016-2018, the US Congress officially tied delivery of security assistance to progress in governance and institution building.
- Investing in monitoring and oversight: a combination of donor programming and pressure to improve recipient capability to track equipment have delivered partial improvements. State- and Defense Department-run programmes, including the Blue Lantern and the Golden Sentry, enabled monitoring of the location and usage of items delivered through security assistance programmes, helped increase the value put on monitoring. These were complemented by host nation reforms increasing monitoring and tracking capabilities, and decreasing risk of corruption and diversion.
When Ukraine faced conflict on its territory in 2014, its armed forces were ill-prepared for it. In the Crimea, a significant part of Ukraine’s Navy switched allegiance to Russia – where naval salaries were much higher – while its Army struggled to contain the separatists in the Eastern parts of the country.[ii] It sustained heavy losses, with some sources pegging the death toll at more than 10,000 casualties,[iii] and struggled to recruit and retain conscripts, who often preferred to bribe their way out of service with an ill-equipped and badly managed organisation.[iv] Its logistical and supply chains was dysfunctional to an extent that necessitated the use of volunteers to deliver supplies to the frontline, and the funding situation was sufficiently dire that the government invited private contributions – effectively charity – to keep the army functioning.[v]
While surprise and support that Russia offered to Ukraine’s separatists certainly played a part in its military’s sub-optimal performance, corruption – from low-level resource diversion to high-level state capture – was a key factor behind lack of personnel and equipment, bad leadership, and poor training and morale. Donor states wishing to assist the Ukrainian military thus had to contend not only with materiel and training needs, but also with an institution whose structure and staffing caused not only its own ineffectiveness, but also imperilled the utility of donor assistance.
Road to 2014: Setting the conditions for military ineffectiveness
The conditions that enabled the parlous state of the Ukrainian armed forces in 2014 went back to the breakup of the Soviet Union in 1991. While Russia retained its Navy and only warm water port in the Crimea, Ukraine inherited a sizeable army and an air force that was the third largest in the world. This inheritance also included a large military-industrial complex comprising approximately 30% of the entire Soviet military industry.[vi] But the combined impact of economic troubles and wide-ranging, high-level corruption gutted the armed forces and set them on a path to failure.
Soon after Ukraine gained independence, an economic collapse limited interest in providing strategic direction or oversight for the armed forces, which saw virtually no investment and very little consideration of its structure and personnel.[vii] In the confusion of the post-Soviet vacuum, the forces were absorbed by the Ukrainian state wholesale, including military commanders who had previously reported directly to Moscow.[viii] Lack of funding and oversight pushed military officers to create income through illegal means, including illegal sales of military estates, selling of equipment – degrading without proper maintenance – in return for kickbacks, using military resources to renovate or build private houses, and accepting bribes for admission to military academies or gaining preferred posts.[ix] By 2014, the Ukrainian military was undermined by corruption and inefficiency from the political to the tactical level.
The armed forces simultaneously shrank in personnel numbers. The initially 750,000-strong military was reduced to 415,800 by the year 2000 and 245,000 by 2005. By the end of 2013, conscription had been stopped and the military sat at 168,000. Many soldiers and officers were underpaid and now unsure about the future of their careers.[x]
Meanwhile, Ukraine’s defence industry turned away from supplying the shrinking domestic market and prioritised exports.[xi] The Ukrainian market, absorbs less than 30 percent of the country’s defence industry output. The rest – approximately $1.3 billion worth of arms annually – has been exported, making Ukraine the eighth-largest arms exporter in the world between 2009 and 2013.[xii]
Sarah Chayes, an anti-corruption expert, Leonid Polyakov, a former senior defence official in Ukraine, and Olena Shostko, a law professor in Kharkiv, think that the gutting of the military was far from an unintended consequence. Rather, they link it to the needs of Ukraine’s kleptocratic regimes: gutting the military removed a potential alternative power centre, while reliance on the police – especially the 300,000-strong, anti-riot ‘Berkut’ force accused of multiple abuses – propped up the political order.[xiii]
The test and the failure
By 2014, not even the diminished strength of the Ukrainian Army was an accurate reflection of its actual fighting strength. Due to the pernicious effects from two decades of mismanaging defence, the official size of the Force had little reflection on reality. Combat power was completely eroded to the point where Kiev could mobilise only an estimated 6,000 battle-ready troops to respond to the crisis in Eastern Ukraine. Given that the Army’s total strength was 168,000 (125,482) excluding the civilian staff, less than 5% of the deployable part of the Force could be mobilised and used.[xiv]
Meanwhile the cash-strapped Ukrainian government and defence establishment resorted to a public fundraising drive, asking the public to donate a small amount of money by texting a number provided on the government’s Facebook page. The drive raised some $30 million.[xv]
Efforts to supplement the army’s fighting strength resulted in mandatory conscription and acceptance of volunteers, even those hailing from outside Ukraine. Conscripts and volunteers, however, were exposed to the same shortcomings as regular personnel. Chronic mismanagement and corruption affected equipment availability, with up to 75% of materiel either unserviceable or obsolete.[xvi] Conscripts were issued a rifle if they were lucky and most had to spend around $2400 for the basic equipment they would need. Incidentally, it was cheaper – $2000 – to pay a bribe to avoid conscription.[xvii] Neither option was affordable for most Ukrainians, as the median salary in Ukraine was $260 per month.[xviii] A lot of private funding therefore came from volunteers themselves, or wealthy private sponsors.[xix] Private funding helped establish the volunteer battalions: legally sanctioned, yet independent forces paid for by private individuals rather than the state. As these battalions offered better equipment and better command and control than the Army, many preferred to join them rather than regular units; they also attracted foreign fighters due to their semi-official status.[xx]
The volunteer units, even if better equipped and more effective than the regular ones, have left a legacy of command and control issues. Some have been formed along ethnic or religious lines (such as Chechen or Islamic Battalions), while others owe allegiance to the plutocrats who sponsored them.[xxi] Concerns that their agendas were not fully in line with supporting the central government have also arisen, and instances in which the units have been used to safeguard their sponsors’ private interests have also been reported.[xxii]
To make matters worse, Ukraine’s defence industry remained focused on export-oriented production. While there is an argument for selling high-end materiel to use the profits to purchase equipment that is more suitable to domestic circumstances, the defence industry still failed to contribute to managing the crisis in any appreciable way. There were systems produced in Ukraine which would have been useful for Ukrainian troops, such as antitank weapons, counter-battery radar and battlefield recovery vehicles. However, these were provided to Azerbaijan, Kazakhstan and an unnamed African country during the most active phase of the conflict. After two years of fighting in the east, Ukrainian industry had still not created an ammunition production capability. Instead, they continued to rely on the old, dwindling Soviet stock and on contributions from assisting nations.[xxiii]
Where the defence industry did get involved, it was with parlous results. For example, 17,080 sets of body armour were bought for $5.6 million of public funds. While expensive, these sets were apparently of such poor quality that a great number of casualties resulted.[xxiv] Ukrainian companies also imported parts for and assembled Chinese-produced military ambulances for more than it would cost to directly import the vehicles.[xxv] The ambulances were entirely unfit for purpose: able to only carry 320 kilograms, they would not have allowed for carrying a patient if there already was a driver, a medic and a load of medical equipment on board (for comparison, the US HMMWV can carry just over 2300kgs). They were also incapable of off-road driving, which rendered them useless in conflict.
Security assistance in chaos: key corruption pathways
This chaotic environment of an underfunded army afflicted by conflict, corruption, ineffectiveness, and split command and control arrangements was what Ukraine’s security assistance donors needed to work with. Since 2014, Ukraine has become one of the largest recipients of bilateral and multilateral assistance. With the Defense Appropriations Acts of 2015-2016, the US Congress authorised the executive to provide training, defence equipment, and defence assistance to Ukrainian forces. By 2017, the overall value of the assistance committed (albeit not necessarily delivered by the time of writing) was more than US $658 million, placing Ukraine among the top ten recipients of US security assistance (following such traditional assistance recipients as Jordan, Pakistan Israel, Egypt and Iraq). In 2016, the value of committed US assistance amounted to about 7% of Ukraine’s defence budget of 113 billion UAH (about $4.5 billion). By mid-2018, the new US administration committed to sending lethal weapons to Ukraine and pledged an additional $200 million in aid; the latter was released in late 2018.[xxvi] The 2019 National Defense Authorization Act – which follows increasing tensions between Russia and Ukraine – authorises continuing asstistance to the Kiyv government, iuncluding lethal weapons. Other donors provided winter equipment for troops; training; and advisory services for defence reforms.
Security assistance to Ukraine[xxvii]
- High Mobility Multipurpose Wheeled Vehicles (“HMMWV” or “Humvees”);
- Thermal goggles and night vision devices;
- Secure radios;
- Explosive Ordnance Disposal robots;
- Counter-mortar radars;
- Raven unmanned aerial vehicle (“UAV”) systems;
- Medical equipment
- Anti-tank Javelin missiles
- Coastal defence radars, naval de-mining capabilities, and littoral-zone and coastal defence vessels (foreseen in the 2018 National Defense Authorization Act)
US assistance is set to continue through 2019, with $250 million foreseen for overall military assistance, including lethal weapons.
- Defence engagement programmes run by the UK Embassy, mostly focusing on the delivery of defence education on tactical, operational and strategic levels, including funding for education at UK defence institutions.
- Direct engagement with the MOD and the armed forces through the Special Defence Advisor, an embedded British official, who assists the Ukrainian authorities with institutional reform;
- The Defence Reform Advisory Board, advising on institutional reform, and coordinated by the UK SDA;
- Tactical-level training performed by small in-country teams. These teams can also deliver non-lethal assistance, which is mostly medical and logistical in nature.
- The Defence Reform Advisory Board, advising on institutional reform, and coordinated by the UK SDA;
- Tactical-level training performed by small in-country teams. These teams can also deliver non-lethal assistance, which is mostly medical and logistical in nature.
- CAD $16 million (11.8 million USD) worth of non-lethal military equipment
- 200 Canadian trainers deployed in Ukraine
- Advisers on the Defence Reform Advisory Board, an international body advising the MOD
- Training for Ukrainian officers in Canada through the Military Training and Cooperation Program (MTCP)
NATO Comprehensive Assistance Package:
- Support for capacity building and defence education;
- Support for increasing the command & control capabilities in the Ukrainian military;
- Support for logistics reform, especially adoption of NATO standards;
- Providing advisers for defence reform;
- Assistance in countering IEDs and de-mining.
- Funding and implementation of 5 trust funds to support Ukraine in the areas of: Command, Control, Communications and Computers (C4), Logistics and Standardization, Cyber Defense, Military Career Transition, Medical Rehabilitation, and Counter-IED. As of March 2017, NATO reported contributions of more than 14 million Euros (15 million USD) to Trust Funds in Support of Ukraine.
Providing security assistance through the Ukrainian system meant that donor support was vulnerable to the same issues as the Ukrainian army itself: a political class that was largely focussed on using state apparatus to extract wealth for themselves, the confused and inefficient governance architecture which had developed under them towards that purpose,[xxviii] and finally, the poorly organised, poorly equipped and diversely aligned forces themselves. Corruption and impunity within defence and security sectors created some of the most significant risks for diversion and waste of security assistance. Widespread petty corruption exacerbated the risk of diversion or waste at the tactical and operational levels, while systemic corruption and state capture made the provision of security assistance and enterprise fraught with large-scale strategic and political risks.
As a consequence, resources provided by volunteer or international contributions were diverted, misallocated, or sold to those they were supposed to have been issued to. [xxxi] US-provided MREs (Meals Ready to Eat) were sold online and ambulances provided to the armed forces had not made their way to where they were meant to be deployed.[xxxii]
When the soldiers in the 12th Battalion signed up to fight, they each were given a gun by the Defence Ministry. Nothing more. So their friends and families bought them everything else the men needed for battle. They collected money for helmets, bulletproof vests, medication and even vehicles.
But much of that gear went missing from the warehouse before the Kiev unit ever saw action.
We saw all the ammunition in the depot; we saw the parcels full of gear that our friends sent us. But the equipment didn’t reach us after we left for the combat operation… When the fighting began, the troops felt the loss immediately. Because the helmets had gone missing, two of Sergei’s comrades suffered head injuries.[xxxiii]
Charles McPhedran, Corruption Eats Away at Ukraine Military, 2014
By 2014, high-level corruption and ineffectiveness had resulted in a military organisation ill-capable of coordinating planning and processing requests related to security assistance. Lack of a transparent acquisition planning process makes it difficult for donors to validate what is really needed, and how they can effectively contribute to the establishment of a strong Ukrainian defence force long-term. One donor state representative summed it up by saying that they “lack a clear sense of who’s getting what and why”.[xxxiv] Ukraine’s key procurement plans and security assistance requirements are set out annually in the State Defence Order and the Priority Directions. Both documents are classified and as a rule not available to either the public or to donors. This means that donors are often ‘flying blind’, without assurance as to whether their security assistance plans really fit into what is needed and planned on the Ukrainian side.
The state-owned UkrOboronProm, a conglomerate of 130 defence companies, remains the elephant in the room. The company, which only in 2018 committed to undergoing a full audit (at the time of writing, the audit had not yet begun),[xxxv] is reportedly involved in the process of formulating requirements and influences the procurement choices made by the Ukrainian MOD and armed forces. Since it is a provider of equipment to the armed forces, consultation is to be expected. However, donor interviewees and a report from the RAND Corporation indicated that senior leaders within the defence establishment, rather than planning for what they really require, make agreements with UkrOboronProm officials to match the Ukrainian defence requirements to what the company and its subsidiaries can provide. Lack of clarity on planning raises donor concerns about undue influence and a lack of competition. The Ukrainian defence sector, one interviewee suggested, was in a weak position when dealing with UkrOboronProm: ‘They’re so big and so protected that when it comes to some decisions, people defer to them.’[xxxvi]
There is therefore very little scrutiny of what is being procured and how that process is conducted. UOP’s non-transparent budget and processes, together with its connections to Ukraine’s top politicians – including MPs – begets questions of influence being exerted to steer the company’s priorities, effectively subsidising defence manufacturing for export at the cost of supporting the national armed forces.[xxxvii]
After the issues plaguing Ukraine’s armed forces were exposed, increased donor and public scrutiny pushed the government to introduce a number of reforms aimed at improving the functioning of the armed forces, as well as addressing corruption in Ukraine overall. International pressure and conditionality implemented by international financial institutions have supported anti-corruption institutions such as the National Anti-Corruption Bureau (NABU), an investigative law-enforcement institution mandated to investigate corruption cases.[xxxviii] Advisory missions, from NATO engagement to the Defence Reform and Advisory Board (DRAB) have assisted in designing and implementing reforms, and deployed advisors. The UK’s Special Defence Adviser, for example, works directly with the Ukrainian MOD to support and help implement reforms.[xxxix] Ukrainian President Petro Poroshenko has also committed to Ukraine achieving NATO standards and interoperability with the Alliance by 2020.[xl]
The Ukrainian government has also introduced other measures aimed at mitigating corruption risks. One key development was Prozorro, the Ukrainian government’s online procurement systems, which has provided external stakeholders with access to government tenders and procurement decisions..[xli] The Ukrainian MOD has used Prozorro, but the system is not applied to classified procurement processes, rendering a significant part of defence procurement – including all munitions, equipment and weapons – opaque.[xlii]
But perhaps the most significant progress has been achieved in improving supply to frontline troops. This was done through a combination of stronger accountability for equipment and supplies at the tactical level, and measures aimed at reducing impunity and improving the overall governance of the defence sector. While initially donors tended to bypass Ukrainian defence structures and rely on external actors, in time, donor pressure and improvements in Ukrainian structures have helped plug the leaks in the supply chains.
Other donors have similarly opted to bypass Ukrainian structures. In the early stages of the conflict, the US embassy in Kiyv decided to purchase equipment for the Ukrainian border guards directly rather than through Ukrainian institutions. Basic items such as concertina wire, fuel and vehicle batteries, were bought in Kiyv with ‘Pentagon money’[xliv] and delivered directly to the border service.
Using volunteer organisations and bypassing central Ukrainian government institutions might have solved the immediate issue of materiel diversion and ensured a greater likelihood of supplies making their way to the frontlines. It would have also prevented resources enriching corrupt networks. However, in the long run, using alternative or parallel structures to bypass formal institutions only weakens them further, and can help cause accountability issues as the government’s prerogative on the use of force is diluted and comes to be shared among other organisations.
Inadequate tracking and protection processes mean that Ukraine remains ineligible for some of the more technologically advanced assistance, as donors are worried about the risk of diversion.[xlvi] The result is that in some instances, Ukraine receives equipment that does not best meet its strategic need. An example of this is the RQ-11 Raven drone, which has been submitted repeatedly in ITA requests. In practice, the RQ-11 Raven is not well-suited for the Ukrainian MOD’s needs. It can be easily taken out of operation through electronic warfare and the operating range is too small for the current conflict in the east, as it only has a range of up to ten kilometres. This makes it ineffective to employ the RQ-11 Raven in most operations in Ukraine today. But other UAVs that have been requested have been considered either too expensive or too technologically advanced, given the perceived risk of diversion. One donor interviewed indicated that poor performance in this area raises concerns in the donor community that materiel may be transferred across the border to Russia, and cited it as a main reason that Ukraine does not receive technologically sophisticated hardware.[xlvii]
Finally, the US Congress has enshrined conditionality in the legal and budgetary mandate for security assistance, the National Defence Authorization Acts (NDAA). The 2017 NDAA authorised up to $350 million for defence assistance to Ukraine, but limited expenditure to $175 million until it can be shown, through certification by the Secretaries of State and Defense, that Ukraine has engaged in significant defence institutional reform. Improvements are required in civilian control of the military, especially in enabling the Ukrainian Parliament (Verkhovna Rada) to oversee the Ministry of Defence and armed forces; improved transparency and accountability of the defence procurement procedures; and reform in the accountability and transparency of the defence industry. The latter, in particular, is viewed by the US not only as an important means of reducing corruption, but also as a means of ensuring that improvements in combat capability underpinned by US assistance are sustainable.[xlviii] Equally, the US-Ukraine five-year Partnership Concept adopted in September 2016 includes provisions related to improving civilian control of the military and increased transparency and accountability of the defence sector.[xlix] The conditionality-related provisions continue in the documents setting out the 2019 NDAA, with release of assistance conditional upon improving civilian control of the armed forces, tackling corruption, and improving defence policy and planning processes.[l]
However, it is currently unclear whether the provision of conditionality has resulted in governance changes, as the methodology for assessing the fulfilment of conditions is not public and reports have not been released. A 2018 batch of assistance ($200 million) was released on condition of Ukraine adopting a new National Security Law, considered a sufficient basis to allow the use of DoD funds.[li] It is, however, not clear to what extent the adoption of the law was prompted by US conditionality, or whether its implementation will lead to qualitative changes in governance.
Donor pressure and requirements played a key role in pushing for reform in the Ukrainian monitoring systems. Among Ukraine’s donors, the United States appeared to have the most comprehensive system of end-use monitoring and verification, aimed at ensuring that items provided through security assistance were getting to where they were supposed to go and being used by the units they were meant for.
The legal architecture based on the Arms Export Control Act (AECA, section 3 and 4) and the Foreign Assistance Act (FAA, section 505) requires end-use monitoring in order to ensure that recipients of US assistance comply with US requirements pertaining to final use, transfer, resale, and security of articles provided.[lii] The Department of Commerce also conducts checks for dual-use and certain military items.[liii]
Both State and Defense Departments operate end-use monitoring programmes. Blue Lantern, the State Department programme, pertains to US Munitions List articles, technology and services obtained by commercial sales or the Foreign Military Sales Programme. DOD’s Golden Sentry programme attempts to prevent misuse, diversion or unauthorised transfer especially of items procured through Foreign Military Sales or other DoD-managed government-to-government transfers containing sensitive defence technology and whose diversion or theft would pose greater risks to the US, and is the primary monitoring mechanism for security assistance provided to Ukraine.[liv]
Golden Sentry includes two types of End-Use Monitoring: Routine and Enhanced.
- Routine EUM is required for all defence articles and services provided via government-to-government programmes. These procedures require that Ukraine submits to the US reports containing information on how particular security assistance items are used, and whether they are lost, damaged, or stolen. In addition, US personnel are required to observe and report any potential misuse or unapproved transfer that they note in the normal course of duties.
- Enhanced EUM applies to items containing sensitive technologies and requires that 100% of items are accounted for at any time from transfer to disposal.[lv] Donor country representatives are authorised to carry out visual inspections to ensure that equipment is being used in accordance with agreed terms, and recipient bodies are required to report, within 30 days, an item’s loss or diversion.
Most items provided to Ukraine through security assistance do not require specialised tracking; one donor interviewee stated that only night-vision devices were at the time covered by Enhanced EUM and required close monitoring and verification of use.[lvi] Items which are to be transferred to Ukraine would be subject to a check and inventory conducted by US entities. After transfer, monitoring can be conducted either through in-person checks by US official or by evidence provided by the recipient side – such as photographic records of equipment and its current placement. The latter is especially prevalent in conflict areas such as the ATO – when security conditions are assessed as preventing US officials from traveling into an area to conduct checks, they rely on recipient documentation.[lvii]
Randomised control, involvement of a number of different entities, and the challenging security situation can diminish the effectiveness of verification and monitoring programmes. While a detailed breakdown of the results of Golden Sentry checks is normally not released, oversight reports do note shortcomings in checks in other countries.[lviii]
The donor-operated and required end-user monitoring systems need to be complemented by the existence of robust internal processes that allow for real-time tracking of materiel donated through security assistance. At the same time, these processes can help account for materiel obtained through regular procurement processes. US officials, for example, have put pressure on the Ukrainian MOD to adopt policies, procedures (such as record-keeping) and physical safeguards such as appropriate storage facilities to help reduce the risk of misuse and diversion.[lix]
Donor officials noted improvement between 2014 and 2016: the two years after Ukraine began to receive larger amounts of assistance saw its government grow to appreciate the need to account for aid and try to build up a good record in an attempt to project a cooperative and trustworthy image.[lx] On the US side, the Cooperative Defence Technology Security Dialogue, formally established in 2016, engages the MoD staff and other elements of the broader defence establishment on developing policies procedures, and practices in ensuring the protection of sensitive defensive technologies (i.e., night vision) as well as advocating effective Ukrainian mechanisms on end-use accountability.[lxi]
Two government departments – Ministry for Economic Development and Trade and the Ministry of Social Policy – track and account for items delivered by international donors. Depending on their classification (either as International Technical Assistance or as Humanitarian Assistance), donated items are tracked by one of those two departments. The MEDT Military Cooperation Department holds all ITA cargo and customs declarations that are delivered and conducts an annual visual check on whether it has been received and used. The Department also receives quarterly reports from project implementers on whether the ITA has been received and used, which are submitted to the Ministry of Finance. Finally, it submits semi-annual report cards (due in January and in July), based on reports from responsible units, to the MEDT. In the field, accounting is carried out by company commanders at least once a month, platoon commanders once every two weeks, and squad commanders every day.[lxii] For humanitarian assistance, tracking is based on customs records of incoming items and subsequent reports of end users coming to the Ministry. Any military property that is not accounted for is subject to investigation and possibly prosecution by the Military Prosecutors Office, whether it is ITA, HA, or received through normal procurement.[lxiii]
There is also a system of verifying the state of materiel in frontline units, meant especially to check the claims of equipment being damaged in combat. Any such reports are subject to investigations which compare dates of artillery shelling against the location where the alleged incident was supposed to have occurred, before an item can be written off the inventory.[lxiv]
While record-keeping has improved, after 3 years of conflict there was still no single electronic database enabling personnel to track and monitor items in real time. At the regional level, implementation of SAP (Systems, Applications and Products) accounting systems and record-keeping capacity have been stalled since 2015, making it even more difficult to track items at the regional and unit level.[lxv] Reliance on paper-based accounting can, especially in conflict zones, decrease the effectiveness of monitoring as records are lost and delayed.
Responding to corruption risks in procurement and delivery of frontline weapons and payment of salaries, the Ukrainian Ministry of Defence put in place an Internal Audit (IA) unit mandated to identify and mitigate corruption risks affecting deployed units.
Supported by the international community, the IA team recognises that corruption can directly reduce military effectiveness and therefore should not be treated as a risk to be addressed at an unspecified ‘later stage’; rather, it needs to be prioritised, especially in the midst of an ongoing conflict. It has therefore developed an innovative approach to auditing in conflict, focusing on areas identified as posing particular corruption risks to the armed forces: public procurement, disposal of military assets, personnel salaries and allowances, usage and repair of weapons and military equipment, management of property and military housing. Among other initiatives, IA personnel – who are deployed to conflict areas insofar as possible – have introduced:
- New risk management methodologies that include corruption risks in addition to fraud and financial irregularities;
- Audits of regulatory compliance with international regulations and practices;
- IT audits;
- A focus on identification of ‘red flags’, or indicators, that can signal problems with field procurement or personnel issues;
- Training, including pre-deployment training, to those about to deploy and those who are likely to carry out procurement in a conflict zone;
Based on the presentation by IA staff, 2018
Conclusions and Recommendations
Anti-corruption, transparency and accountability reforms can be particularly challenging in a conflict environment, when it can be easier to argue that national security considerations require a cloak of secrecy over the defence sector, especially in terms of procurement. Failure to control sensitive information related to national security can indeed have dire results. Similarly, however, excessive secrecy and over-classification, which can facilitate corruption and inefficiency, can pose major threats to national security. Finding an appropriate balance between transparency and national security concerns not only helps build public trust in institutions, but also helps push for greater efficiency and capacity.[lxvi]
Greater efficiency and capacity can in turn help put new equipment and training to better use, as the same low institutional capacity that can contribute to materiel diversion can also be responsible for failure to use donated materiel effectively. Materiel being provided to units who do not need it or have not been trained to use it – for instance failing to train Raven drone operators and providing night-vision devices to units which do not deploy in the dark – does not increase the overall effectiveness of the force, and neither does failure to plan for maintenance and replacement of spare parts.[lxvii] In these cases, while international donors provided the equipment, they did not provide a useable capability that could add to operational effectiveness. For maximum effectiveness, items delivered through security assistance need to fit into the overall procurement plan of the recipient force, and be paired with training and life cycle planning that can turn an item of materiel into an actual working capability.
The Ukraine case study suggests that donor pressure can work in pushing for improvements in defence governance. While host nation will to reform is indispensable for progress to occur, external pressure can help bring the need for reform home and to maintain momentum when the reform process encounters problems. In Ukraine, donor efforts to set standards for tracking and reporting on donated materiel have led to changes at operational and tactical levels; as one interviewee reported, clear descriptions of what was required in order for security assistance to continue to flow led to noticeable improvements in reporting on loss and damages.[lxviii] Donors should therefore consider setting clear, well-communicated standards for the host nation to aim for, and base delivery of materiel – especially sensitive technologies – on progress in these areas.
However, while donors have reported improvements at the tactical and operational level of Ukrainian armed forces, key challenges remain at the strategic and political-military level. Defence policy making in Ukraine is an opaque process and links between defence strategy and procurement of specific items are often unclear, leaving the armed forces open to continuing inefficiencies. Keeping key state documents secret – including procurement plans and overall military strategies – can inhibit joint planning and donor needs assessment. Ukraine’s state-owned defence industry giant, Ukroboronprom (UOP), remains opaque, although it has committed to undergoing an international audit.[lxix]
Achieving substantial strategic and political change is likely to require a long-term commitment from donors. Limiting the impact of entrenched networks, disrupting financial flows, and changing the way in which political and military institutions can operate, are going to take time and effort. International pressure – a combination of political support, expertise, and conditionality – can help maintain momentum for reform.
All online sources were accessed between November 2016-December 2018.
[i] See for example ‘Литва передала Украине вооружение по просьбе Киева – министр обороны’ (‘At Kiyv’s request, Lithuania supplies arms to Ukraine’), Interfaks-Ukraina, 5 February 2015, available at https://interfax.com.ua/news/political/248938.html.
[iii] Pavel Polityuk & Anton Zverev, ‘Why Ukrainian forces gave up Crimean without a Fight’, Reuters Online, 24 July 2017, available at https://www.reuters.com/article/us-ukraine-crisis-crimea-annexation/why-ukrainian-forces-gave-up-crimea-without-a-fight-and-nato-is-alert-idUSKBN1A90G0; Valeriy Akimenko, ‘Ukraine’s Toughest Fight: The Challenge of Military Reform’, Carnegie Endowment for International Peace, 22 Feburary 2018. https://carnegieendowment.org/2018/02/22/ukraine-s-toughest-fight-challenge-of-military-reform-pub-75609
[iv] Akimenko, ‘Ukraine’s Toughest Fight’; Karoun Demirjian, ‘Ukraine’s Military Mobilization Undermined by Draft Dodgers’, The Washington Post, 25 April 2015. https://www.washingtonpost.com/world/europe/ukraines-military-mobilization-undermined-by-draft-dodgers/2015/04/25/fc3a5818-d236-11e4-8b1e-274d670aa9c9_story.html?noredirect=on&utm_term=.3e95a449f2a4; Home Office, Country Policy and Information Note – Ukraine: Military Service, Version 5.0, October 2018. https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/608565/Ukraine_-_Military_Service_-_CPIN_-_v4.pdf
[v] Jacob Kastrenakes, ‘Ukraine is fundraising for its army via text message’, The Verge, 19 March 2014. https://www.theverge.com/2014/3/19/5527402/text-message-fundraiser-for-ukrainian-army
[vi] In 1991/92 Ukraine had: five armies, one army corps, eighteen divisions (twelve motorized, four tank, and two airborne), three airborne brigades, three artillery divisions, and a host of combat support and combat service support units. In total they had some 726,000 defence personnel. See Stephen D Olynyk, ‘Ukraine as a post-cold war military power’, Joint Defense Quarterly, Spring 1997. https://pdfs.semanticscholar.org/ccc7/c85d29811bbd1a314c0a3eccd16bab6d054f.pdf
[vii] Sabra Ayres, ‘I was a peace corps volunteer in Ukraine 20 years ago. Now I’m a war reporter there, Here’s what’s changed.’, The New Republic, 22 October 2014. https://newrepublic.com/article/119925/ukraines-post-soviet-history-united-poverty-now-divided-war; Isabelle Facon, ‘Reforming Ukrainian Defense: No shortage of Challenges.’, Ifri, May 2017. https://www.ifri.org/sites/default/files/atoms/files/facon_reforming_ukrainian_defense_2017.pdf
[viii] Tynchenko, ‘In the Army Now’
[ix] Sarah Chayes, ‘How corruption guts militaries: the Ukraine case study.’, Carnegie Endowment for International Peace, 16 May 2014. https://carnegieendowment.org/2014/05/16/how-corruption-guts-militaries-ukraine-case-study-pub-55635; Tynchenko, ‘In the Army Now’
[x] Tynchenko, ‘In the Army Now’
[xi] Ian Traynor, ‘International Dealers of Death’, The Guardian, 9 July 2001. https://www.theguardian.com/world/2001/jul/09/armstrade.iantraynor
[xiii] The ‘Berkut’ force strength was over twice the average global policing density. See Chayes, ‘How corruption guts militaries’
[xiv] Facon, ‘Reforming Ukrainian Defense’; Tynchenko, ‘In the Army Now’
[xv] Kathy Lally, ‘Ukraine, short on military budget, starts fundraising drive’, The Washington Post, 19 Apr 2014. https://www.washingtonpost.com/world/europe/ukraine-short-on-military-budget-starts-fundraising-drive/2014/04/19/0eba04d0-c7f6-11e3-8b9a-8e0977a24aeb_story.html?utm_term=.c19f638d67fd
[xvi] Akimenko, ‘Ukraine’s toughest fight’
[xvii] Aleksandr Lapko, ‘Ukraine’s own worst enemy’, New York Times, 7 Oct 2014. https://www.nytimes.com/2014/10/08/opinion/in-war-time-corruption-in-ukraine-can-be-deadly.html?_r=1
[xviii] Lapko, ‘Ukraine’s own worst enemy’
[xix] MAJ Michael Cohen, SSG Matthew Green, ‘Ukraine’s volunteer battalions’, Benning – US Infantry Magazine, Apr-Jul 2016. http://www.benning.army.mil/infantry/magazine/issues/2016/APR-JUL/pdf/16)%20Cohen_UkraineVolunteers_TXT.pdf
[xx] Jen Judson, ‘What the Ukrainian military really needs’, Politico, 27 Aug 2015. https://www.politico.eu/article/ukraine-military-really-needs-defense/; Chris Dunnet, ‘Ukraine’s Shadow Army ‘, Hromadske International, 17 Sep 2014. https://medium.com/@Hromadske/ukraines-shadow-army-b04d7a683493
[xxi] Dunnet, ‘Ukraine’s Shadow Army ‘
[xxii] Denis Popovich, ‘Past, present and future of the war in Ukraine’, The Word and the Deed [Translation], 10 Aug 2017. https://ru.slovoidilo.ua/2017/08/10/kolonka/denis-popovich/bezopasnost/proshloe-nastoyashhee-i-budushhee-dobrobatov-ukraine; Akimenko, ‘Ukraine’s toughest fight’
[xxiii] Euan MacDonald, ‘Ukrainian arms exports falling short of lofty goals’, The Kyiv Post, 27 Oct 2016. https://www.kyivpost.com/ukraine-politics/ukrainian-arms-exports-falling-short-lofty-goals.html
[xxiv] Lapko, ‘Ukraine’s own worst enemy’
[xxv] Andrew Higgins, ‘In Ukraine, Corruption Is Now Undermining the Military’, New York Times, 19 Feb 2018. https://www.nytimes.com/2018/02/19/world/europe/ukraine-corruption-military.html
[xxvi] H.R.1735, National Defense Authorization Act for Fiscal Year 2016, 14th Congress (2015-2016), November 2015 https://www.congress.gov/bill/114th-congress/house-bill/1735/text#toc-H2BE8CF3F3CE54A63A54B7BAF4B44B16D; also H.R.2685, Department of Defense Appropriations Act, 2016, 114th Congress (2015-2016). https://www.congress.gov/bill/114th-congress/house-bill/2685/text; S.2828, Ukraine Freedom Support Act of 2014, November 2014. https://www.congress.gov/bill/113th-congress/senate-bill/2828/text#tocid574535f7bf16498bb78737f3cc42b4ae; Vincent E. Morelli, Ukraine: Current Issues and U.S. Policy, Congressional Research Service, Washington, October 2016, pp. 31-35.https://fas.org/sgp/crs/row/RL33460.pdf; Ivan Medynskyi, ‘U.S. lethal weapons for Ukraine: mechanism and consequences’, Policy Brief, Institute of World Policy 2016. http://iwp.org.ua/img/US_weapons_eng.pdf; Department of Defense, Readout of Secretary Carter’s Meeting with Ukrainian Minister of Defense General Stepan Poltorak, 8 September 2016. http://www.defense.gov/News/News-Releases/News-Release-View/Article/937303/readout-of-secretary-cartersmeeting-with-ukrainian-minister-of-defense-general
[xxvii] US assistance analysis on the basis of the following sources: Morelli, Ukraine: Current Issues, p32; H.R.1735, National Defense Authorization Act for Fiscal Year 2016, 14th Congress (2015-2016), November 2015. https://www.congress.gov/bill/114th-congress/house-bill/1735/text#toc-H2BE8CF3F3CE54A63A54B7BAF4B44B16D; H.R.2685, Department of Defense Appropriations Act, 2016, 114th Congress (2015-2016), https://www.congress.gov/bill/114th-congress/house-bill/2685/text; ‘U.S. House of Representatives approves $250 mln in security assistance to Ukraine’, UkrInfo, 27 September 2018. https://www.ukrinform.net/rubric-defense/2546731-us-house-of-representatives-approves-250-mln-in-security-assistance-to-ukraine.html; H.R. 5515, National Defense Authorization Act for Fiscal Year 2019, 25 July 2018, 115th Congress. https://www.govinfo.gov/content/pkg/CRPT-115hrpt874/pdf/CRPT-115hrpt874.pdf. Assistance from the UK on the basis of: Claire Mills, ‘UK Military Assistance to Ukraine,’ Briefing Paper, House of Commons Library, 20 May 2015; Rahim Rahemtulla, ‘Ukraine relies on advice from Defense Reform Advisory Board’, Kiyv Post, 17 November 2016. https://www.kyivpost.com/ukraine-politics/ukraine-relies-advice-defense-reform-advisory-board.html; for Canada, see Government of Canada Factsheet, Canada-Ukraine Relations, February 2016. http://www.canadainternational.gc.ca/ukraine/bilateral_relations_bilaterales/index.aspx?lang=eng; for NATO involvement, see Fact sheet: US and NATO efforts in support of NATO partners, including Georgia, Ukraine and Moldova, the White House, 10 July 2016; calculation based on information provided in “NATO Trust Fund Projects,” 1 March 2017. https://www.nato.int/nato_static_fl2014/assets/pdf/pdf_2018_11/20181106_1811-factsheet-nato-ukraine-support-eng.pdf
[xxix] Racurs, ‘Военно-финансовые махинации,’ http://racurs.ua/1073-voenno-finansovye-mahinacii-analiz-sudebnoypraktiki-za-2015-god
[xxx] Racurs, ‘Военно-финансовые махинации.’ http://racurs.ua/1073-voenno-finansovye-mahinacii-analiz-su
debnoypraktiki-za-2015-god; 368 media, ‘Коррупция в Нацгвардии: тыловики систематически разворовывали военное имущество солдат из АТО;’ 368.media, 2015 http://368.media/2015/10/11/korruptsiya-vnatsgvardii-tyloviki-istematicheski-razvorovyvali-voennoe-imushhestvo-soldat-iz-ato/; Haivei, ‘Коррупция в закупке жилья для военных, почти в миллиард грив | ХайВей’ http://h.ua/story/422541/; Glavcom, ‘Просчеты «тыловиков» Минобороны: глупость, коррупция или предательство?’ http://glavcom.ua/articles/34036.html;
[xxxi] Charles McPhedran, ‘Corruption Eats Away at Ukraine Military’, The Daily Beast, 21 Oct 2014. https://www.thedailybeast.com/corruption-eats-away-at-ukraine-military; Lapko, ‘Ukraine’s own worst enemy’.
[xxxii] Meghan Neal, ‘US Food Aid Is Already Being Sold on Black Market Websites in Ukraine’, Motherboard/VICE Media, 2 Apr 2014. https://motherboard.vice.com/en_us/article/d73p4k/us-food-aid-is-being-sold-on-black-market-websites-in-ukraine; NAKO, ‘Making the System Work’, Transparency International, May 2017. http://ti-defence.org/publications/making-system-work-enhancing-security-assistance-ukraine/
[xxxiii] McPhedran, ‘Corruption Eats Away’.
[xxxiv] Interview 3
[xxxv] Transparency International Defence & Security, ‘Ukroboronprom makes unprecedented move by announcing bona fide international financial audit tender’, 16 May 2018. http://ti-defence.org/ukroboronprom-makes-unprecedented-move-by-announcing-bona-fide-international-financial-audit-tender/
[xxxvi] Interview 2
[xxxvii] Akimenko, ‘Ukraine’s toughest fight’
[xxxviii] Matthias Williams & Natalia Zinets, ‘Ukraine tries to fend off critics as West cranks up pressure on corruption’, Reuters, 6 Dec 2017. https://www.reuters.com/article/uk-ukraine-corruption/ukraine-tries-to-fend-off-critics-as-west-cranks-up-pressure-on-corruption-idUKKBN1E01OL
[xl] Iryna Somer, ‘Poroshenko at NATO summit: Our goal is to prepare Ukraine for membership’, Kyiv Post, 12 July 2018. https://www.kyivpost.com/ukraine-politics/poroshenko-at-nato-summit-our-goal-is-to-prepare-ukraine-for-membership.html
[xlii] NAKO, ‘Secrecy and Transparency: striking the right balance in the defence sector’, pp. 7-8. https://nako.org.ua/wp-content/uploads/2018/09/secrecy_and_transparency_download.pdf
[xliii] Alya Shandra, ‘Volunteers to make sure that Canadian military aid to Ukraine reaches soldiers’, Euromaidan Press, 29, November 2014. http://euromaidanpress.com/2014/11/29/volunteers-to-make-sure-that-canadian-military-aid-toukraine-reaches-soldiers/
[xliv] Richard Sisk, ‘US Money for Ukrainian Border Guards’, Military.com, 5 Jul 2014. https://www.military.com/daily-news/2014/05/07/us-money-for-ukrainian-border-guards.html?comp=700001075741&rank=5
[xlv] Interview 3
[xlvi] Interview 3
[xlvii] Interview 15
[xlviii] 7 114th Congress, National Defense Authorization Act for Fiscal Year 2017 (S2943), December 2016, Section 1237. http://docs.house.gov/billsthisweek/20161128/CRPT-114HRPT-S2943.pdf; Colby Goodman, ‘U.S. Defense Bill Breakdown. A Basic Guide: Major Changes to Security Cooperation’, Security Assistance Monitor, December 2016. http://securityassistance.org/fact_sheet/defense-bill-breakdown-key-military-aid-issues-fy2017-national-defense-authorization-act
[xlix] Department of Defense, ‘Fact Sheet: United States – Ukraine Five Year Partnership Concept’, 8 September 2016. http://www.defense.gov/Portals/1/Documents/pubs/FACT_SHEET_-_Partner_Concept_8_Sep.pdf
[l] ‘U.S. House of Representatives approves $250 mln in security assistance to Ukraine’, UkrInfo, 27 September 2018. https://www.ukrinform.net/rubric-defense/2546731-us-house-of-representatives-approves-250-mln-in-security-assistance-to-ukraine.html; H.R. 5515, ‘National Defense Authorization Act 2019’.
[li] Ryan Browne, ‘US Releases $200 million in Defensive Aid to Ukraine as Moscow seeks better ties’, CNN, 20 July 2018. https://edition.cnn.com/2018/07/20/politics/us-defensive-aid-ukraine/index.html
[lii] Arms Control Export Act, section 3 and 4; https://www.gpo.gov/fdsys/pkg/USCODE-2010-title22/html/USCODE2010-title22-chap39-subchapI-sec2754.htm; Foreign Assistance Act 1961, Section 505, https://www.gpo.gov/fdsys/pkg/USCODE-2010-title22/html/USCODE-2010-title22-chap32-subchapII-partIIsec2314.htm; Defense Security Cooperation Agency, Security Assistance Management Manual (SAMM), ‘Chapter 8: End-Use Monitoring’, http://www.samm.dsca.mil/chapter/chapter-8
[liii] Interviews 2, 6
[liv] SAMM, Chapter 8
[lv] Defense Security Cooperation Agency, End Use Monitoring (EUM) Responsibilities in Support of the Department of Defense Golden Sentry EUM Program (DSCA Policy Memorandum Number 02-43), December 2002. http://www.samm.dsca.mil/policy-memoranda/dsca-02-43
[lvi] Interview 3
[lvii] Interviews 2, 3
[lviii] See for example State Department, ‘End-Use Monitoring of Defense Articles and Defense Services Commercial Exports FY 2015.’ http://pmddtc.state.gov/reports/documents/End_Use_FY2015.pdf; Government Accountability Office, ‘Countering Overseas Threats: DOD and State Need to Address Gaps in Monitoring of Security Equipment Transferred to Lebanon,’ 4 March 2014. http://www.gao.gov/products/GAO-14-161
[lix] Interview 2
[lx] Interviews 2, 5
[lxi] 10 Interviews 1, 4, 5, 6
[lxii] Clauses 112, 120, 126 of the AFU Internal Service Regulations
[lxiii] Law of Ukraine “On humanitarian Assistance” of October 22, 1999 № 1192-XIV
[lxiv] Interview 13
[lxv] Interview 2; Interviewee 3 also identified lack of unit-level tracking as an outstanding issue
[lxvi] NAKO, ‘Secrecy and Transparency’, pp. 7-8
[lxvii] Interviews 13, 14, 15
[lxviii] Interview 3
[lxix] Transparency International Defence & Security, ‘Ukroboronprom makes unprecedented move’.
This case study is partially based on interviews conducted in 2016 and 2017 for a TI-Defence and Security report, Making the System Work: Enhancing Security Assistance for Ukraine. Available online.
Interview 1: Ukrainian volunteer, Kiev, November 2016
Interview 2: US official, by phone, November 2016
Interview 3: Donor state official, Kiev, November 2016
Interview 4: UK official, by phone, November 2016
Interview 5: US official, by phone, November 2016
Interview 6: Three US officials, December 2016
Interview 7: Two Ministry of Defence of Ukraine officers, Kyiv, January, April 2017
Interview 8: Former battalion commander, Kyiv, January-February-March 2017
Interview 9: Two Volunteers, Kyiv, January-February 2017
Interview 10: Ministry of Economic Development and Trade official, Kyiv, February 2017
Interview 11: Former DOD official, Kyiv, January 2017
Interview 12: US Embassy official, by phone, January 2017
Interview 13: Two Military Police officers, Kyiv, February-March 2017
Interview 14: Seven active servicemen, by phone, January-February-March 2017
Interview 15: Interview with three members of the donor community, March-April 2017
Interview 16: Interview with several members of the donor community, April 2017
Interview 17: Interview with staff member in donor state legislature
Interview 18: an MOD official, April 2017