Zelenskyy’s new plan to reshape weapons exports

SPOTTED: at Brave1’s Defence Tech Valley in Lviv last week:

Lola Onipko, co-founder at Invest in Bravery;

Ryan Grant Little, founder of Roxolani Trust;

Deborah Fairlamb, founding partner at Green Flag Ventures;

Nikita Makushin, country manager at Ukraine’s office of Milrem Robotics;

Ihor Fedirko, CEO at Ukrainian Council of Defence Industry;

Charles Tiné, cross-border independent startup mentor;

Natalia Hryshchenko, deputy managing director at German-Ukrainian Chamber of Industry and Commerce;

Bart Gruyaert, vice president at Galion Group;

Anna-Mariia Dzyk-Boiko, director at Ukraine’s office of Frankenburg Technologies;

Dr. Thomas Withington, Associate Fellow at the Royal United Services Institute.

BLUF: The recently-adopted law on establishing Defence City, a special economic regime for defense manufacturers, will be the new foundation for lifting export restrictions. New regulations are expected to be finalized by the end of the year. 

Russians have begun equipping their Supercam reconnaissance drones with an interceptor detector, making them harder to hit.

Ukrainian defense tech startup Zmiyar has unveiled a system that would allow Ukrainian troops to remotely control entire minefields.

THE BIG STORY: Ukraine’s export controls to be reformed for miltech manufacturers

President Volodymyr Zelenskyy recently announced a plan to more aggressively permit the export of domestically-produced weapons – if they’re manufactured in quantities that result in a surplus.

According to Zelenskyy, three main regulatory platforms will be established for sales by private and state-owned companies:

Zelenskyy said a strategy will be presented within the next ten days to give a more detailed picture of how exports will work. He stressed that only products for which Ukraine has sufficient supplies to meet military needs will be exported:

“For example, naval drones… that we have in surplus. As well as anti-tank weapons and some other types [of weapons].”

They’re operating on an ambitious timeline – from the president’s announcement, a sort of starting gun was sounded. Defence City will begin operating from early 2026, by which time all regulatory acts are expected to be adopted, Mykhalko added.

Ahead of Zelenskyy’s public announcement, Defense Minister Denys Shmyhal met with defense industry representatives, said Kateryna Mykhalko, director-general of Tech Force in UA, a defense association. 

They discussed the nature of the coming export reforms, and Shmyhal stated that he had discussed it with Zelenskyy, indicating just what a national priority this otherwise-sleepy area of business regulation had become.

After the meeting, the president made the announcement, said Mykhalko.

The recently-adopted Defence City law, which establishes a special economic regime for defense manufacturers, will serve as the basis for opening up exports, Oleg Tsilvik, acting head of the State Service for Export Control (SSEC), told Counteroffensive.Pro. 

The Defence City law (read about the pros and cons of the new economic regime here) provides for a simplified procedure for obtaining export permits, with the application review now to be completed within 10 days.

"This plan [for lifting restrictions] was only discussed with the president on [last] Friday. There is nothing yet, except a vision," Tsilvik said. “Work on the regulations is just beginning.”

The Defense Ministry, the Ministry of Economy, the State Service for Export Control, will be among those in charge of developing the new set of regulations, Tsilvik said. 

Foreign companies manufacturing products in Ukraine will need to apply for export permits from the SSEC, said Tsilvik. This remains unchanged.

Representatives from the defense association Tech Force in UA are also participating in developing the regulatory framework, Mykhalko said. Their priorities include better protections for intellectual property and that everything in excess of that contracted by the Ukrainian government be considered ‘excess capacity.’

The income from the sale of products can be used to purchase weapons that are in short supply. This will also enable the avoidance of cutting production lines that are idle due to a lack of orders, said Ukraine’s President.

The main risk for defense producers is to be excluded from the Defence City regime. Without the designation, a ten day permit process could take months.

It’s unclear if there will be an export tax involved in the plan. That topic is being discussed separately, but no decision has been made yet, said Tsilvik. Any such tax could be placed in a separate fund designated for the purchase of military equipment and weapons.

Tsilvik said Ukraine is also currently working to establish a list of products for potential export. It’s based on interest from foreign countries, provided there's no urgent need from Ukraine’s defense forces.

One challenge, however, is navigating all the separate approvals required from the MoD, Defense Intelligence, the Ministry of Foreign Affairs, the Security Service, and then having it reviewed at a meeting of the Intergovernmental Commission for Export Control.

According to Mykhalko and Tsilvik, the main issues and concerns over the new reforms are:

Another issue is working out how manufacturers can join the Build with Ukraine program (read our coverage of that here). It’s a recently established program that allows Ukrainian companies to open foreign production facilities. First, an intergovernmental agreement must be signed between Ukraine and a foreign country, and then the private sector can get involved, Mykhalko said. But the finer details still need clarification from the Ministry of Defense.

Questions that still must be addressed:

From a manufacturer's perspective, higher product costs would allow reinvestment in production and R&D. But for Ukraine's limited budget, this could become problematic. 

We will follow up on how this all plays out in our future issues.

BUSINESS LUNCH TOPICS: What our reporting shows!

Russians have begun installing a sensor on Supercam reconnaissance drones which detects the approach of Ukrainian interceptors. This system was first recorded in a production sample that featured a dedicated space for the device that picks up on signs of an interceptor. 

The receiver is essentially a "big ear" that listens to radio waves, Inokentii Razumov, an advisor with the Come Back Alive Foundation, told Counteroffensive.Pro.

If it's an autonomous interceptor operating in radio silence mode, then it will remain unnoticed. But drones are usually controlled via a digital link, which involves a constant signal transmission from operator to drone and back.

Such a signal can be ‘heard’ by the receiver, which acts as passive electronic warfare. The receiver can detect an interceptor's approach because the signal strength will increase. But what happens next is another question, Razumov said. 

The Russian military can command the drone to then perform evasive maneuvers, or the operator can manually maneuver when the signal becomes strong enough.

It's unclear how effective the Russian solution is. 

But Ukrainian countermeasures could include:

Zmiyar, a Ukrainian defense tech startup, has developed a remote control system that would enable Ukraine’s military to make anti-tank mines ‘smart’ and allow troops to control entire minefields with the push of a few buttons. 

It consists of a base station and electrical components compatible with existing anti-tank mines. The standard mine detonator is unscrewed, while another detonator with advanced capabilities is screwed in, effectively making the mine 'smart' and enabling two-way communication with it. 

There are three operating modes:

The mesh technology enables up to 200 devices to communicate with each other, forming a network. This can be reconfigured after a mine has been detonated. It’s also possible to control a single mine or to combine them into groups.

The system also allows not only for the activation of mines but also their deactivation, ensuring the safe passage of one's own troops, said Victor Shapovalov, founder and CEO at Zmiyar. The company is now in the final stage of developing the base station.

Ukrainian startup NORDA Dynamics has secured $1 million in funding to develop autonomous drone systems. The round was led by Varangians, a Swedish investment company, with participation from Angel One, MITS Capital, United Angels Network, and Unpopular Ventures.

The company is developing an autonomous UAV piloting system for mission execution in communication-deprived environments. 

The funds raised are intended to go towards expanding the engineering team, intensive R&D, and testing new autonomous systems. One of the key goals of the investment is the development of new products, though details on these have not yet been disclosed.

Investment extends beyond mere funding, as NORDA Dynamics' software-intensive approach enables robust support for scaling operations in Ukraine and internationally, Andreas Flodström, chairman and co-founder of Varangians, told Counteroffensive.Pro.

The Ukrainian startup ARMOR has developed ARMOR Module 1 to calculate firing parameters from concealed positions for ground drones (UGV) with machine guns or automatic grenade launchers.

Firing from concealed positions increases the safety of the UGV and expands capabilities, which can often be limited without direct visibility of the target. The new system also allows for hitting a target even under harsh weather conditions, because all calculations are made by the module, CEO Oleksii Havrysh told Counteroffensive.Pro.

The Browning M2 with this new module can fire up to 4.8 km (up to 2 km without any modules), while the MK19 grenade launcher can fire up to 2 km (1,500-1,600 m).

The calculation module is implemented as a standalone hardware device that can be connected to the UGV’s onboard network or to the operator’s PC, tablet, or control panel. The module operates in offline mode, and authorization is performed using certificates or FIDO keys, a hardware device used for multi-factor authentication.

Ukrainian orders/legislation we’re tracking: 

By: Oksana Zabolotna

Unmanned technologies get a boost with pilot project expansion 

Resolution of the CMU № 1047 dated August 26, 2025

Why it’s important:

A pilot project for the certification of schools offering training on unmanned aerial systems has been expanded to include unmanned ground and water complexes, a crucial step for preparing specialists in a broader range of unmanned technologies. 

Standardized training through certified schools with approved programs and equipment ensures high-quality, consistent preparation of operators and instructors. Additionally, the transparent procurement of training services and strict oversight of certification processes promote accountability and the efficient use of resources.

Key points:

Stage: Entered into force on August 28, 2025.

Initiator: Cabinet of Ministers of Ukraine.

What’s next: Implementation of the resolution.

ON THE MOVE: Professional movement, promotions and industry news.

Know someone in the defense tech space who has made a professional move? Drop us a line at [email protected]!

30 SECOND ELEVATOR PITCH:

Unmanned Ground Solutions develops universal unmanned ground robotic systems. Their main function is logistics and cargo transportation, but they can also be integrated for other tasks such as air defense, logistics support, demining, or even delivering offensive capabilities.

Primarily, the company requires funding for R&D in the field of UGV protection, as their value is defined by the ability to operate as long as possible in combat conditions, said Mykola Kozlov, the head of the company.

The company is currently planning to raise around €300,000 to develop a system capable of detecting aerial targets, identifying them as hostile, and countering them. In the future, the company intends to scale up production by attracting investments ranging from €1 million to €10 million.

MUST READS:

Thanks to our media partner: