Ukraine losing over $738m a year to waste and fraud, audit finds

Ukraine has been losing more than 1 trillion won a year to waste, fraud and corruption in its weapons procurement, according to internal audits.

According to The New York Times, Ukraine's Defense Ministry and national audit agency conducted internal reviews and found that the country lost about $1.2 billion in weapons procurement in 2024, Yonhap reported.

Auditors identified 18 companies that secured new government procurement contracts despite having previously failed to fulfill existing ones. Six of those firms had never completed a single contract with the Ukrainian government.

Seven of Ukraine's top 10 defense contractors had CEOs who were either under investigation for fraud or had a track record of failing to deliver on contracts. Some companies won new deals even after their CEOs had been arrested on corruption charges.

Ukrainian defense firms are believed to have amassed vast wealth by exploiting a poorly managed procurement system.

Ukrainian troops on the front lines paid the price, receiving defective weapons from those same contractors. When Russian forces attacked Ukrainian trench lines on the eastern front in 2024, Ukrainian artillery units returned fire — but some mortar rounds failed to detonate before they could do any damage. Leonid Syman, who at the time headed the state-owned Pavlohrad munitions factory, was found to have supplied the military with thousands of defective mortar rounds. He was arrested and indicted on defense procurement fraud charges.

Even so, the Ukrainian government signed a $280 million supply contract with him while he was out on bail facing corruption charges.

Syman subsequently acquired substantial real estate holdings and lived lavishly. He is also reported to have kept water buffalo, deer and moose roaming the factory grounds.

In other cases, the Ukrainian government wasted public funds by awarding contracts to more expensive suppliers for identical products.

Tamerlan Bakhavov, a former adviser to Ukraine's Defense Procurement Agency, told The New York Times that "the military is not receiving the supplies it needs, and the budget is being drained by non-delivery and overpayment," adding that "the result is a vicious cycle in which there is not enough money left to order additional weapons."

Separately, a special envoy of US President Donald Trump, who has been mediating Russia-Ukraine peace negotiations, met with Ukrainian President Volodymyr Zelensky after a previous meeting with Russian President Vladimir Putin.

Security officials from Britain, France and Germany also took part, with discussions on ceasefire proposals stretching late into the night, but the talks are not believed to have produced a breakthrough toward an early end to the war.

According to Reuters and AFP, US envoy Steve Witkoff and Trump's son-in-law Jared Kushner traveled to Kyiv on Sunday (local time) to discuss peace proposals with Zelensky.

Zelensky and the US envoys continued their talks late into the night, holding additional meetings even after their session with European allies had concluded.

However, Zelensky signaled that an early end to the war may not be imminent, saying, "If the war continues into winter, I am counting on the support of our European partners — and at this point, it looks like it will."

Ukraine has maintained its position throughout negotiations this year, rejecting Russia's demand for the cession of the Donbas region and insisting on a freeze along current front lines.

The night before the US envoys' visit to Kyiv, both sides continued airstrikes targeting areas outside the capital.