The Ministry of Defense has approved a new procedure for granting the status of strategically important enterprises in the defense industry.

The Ministry of Defense of Ukraine has approved the Criteria for Determining Enterprises, Institutions, and Organizations in the Defense Industry, Aircraft Manufacturing, and Space Activities as those of significant importance to the national economy.

Accordingly, the Ukrainian defense authority has officially started accepting applications from enterprises for the determination of their status through electronic communication channels.

Previously, these powers were vested in the Ministry for Strategic Industries of Ukraine. The new criteria maintain the current approach, meaning that enterprises which already hold the relevant status do not need to submit additional documentation, as noted by the Ministry of Defense.

The designated status allows enterprises to reserve up to 100% of their employees liable for military service, provided that the enterprise:

• performs or participates in the execution of state defense contracts;
• produces more than 50% defense-related products within its total output;
• receives state financial support or performs the functions of an authorized entity managing state-owned assets.

Enterprises in the defense industry that do not meet the above criteria may still obtain the status of strategically important for the economy if they meet at least three of the following requirements:

• execution of state defense contracts;
• involvement in defense orders under contracts, including foreign economic agreements;
• inclusion in the electronic register of participants and executors of state contracts;
• participation in state target programs in the fields of aircraft manufacturing or space activities;
• participation in defense industry development programs, introduction of new technologies, or expansion of production capacities;
• production of goods, performance of works, or provision of services used by defense industry enterprises for the manufacture of defense-related products.

In addition, enterprises that meet two mandatory criteria, in accordance with the Resolution of the Cabinet of Ministers of Ukraine No. 76 dated January 27, 2023, may be recognized as critical for the functioning of the economy, which grants them the right to reserve up to 50% of their employees liable for military service.