Establishing a Blacklist for Unreliable Suppliers
Ukraine’s State Audit Service has called for the creation of a blacklist targeting dishonest suppliers, drawing inspiration from a European framework. This initiative addresses shortcomings in the current prohibition system managed by the Antimonopoly Committee of Ukraine. The existing offender registry, compiled by the Antimonopoly Committee, only applies to competitive tenders, leaving a loophole that allows unscrupulous suppliers to enter into direct contracts with state buyers—including those serving the Ministry of Defense.
Alla Basalaieva, a representative from the State Audit Service, explained:
'The Antimonopoly Committee’s ban is limited to competitive bidding. However, when it comes to direct contracts—for instance, those related to the Ministry of Defense’s needs—a toxic company can still bypass the red flag and sign a direct agreement with the customer.' – Alla Basalaieva
This highlights the urgent need for a more robust system to oversee and control suppliers effectively.
Introducing New Measures
The State Audit Service is also advocating for a separate blacklist modeled after Europe’s Early Detection and Exclusion System. Notably, once a new law on public procurement takes effect, a dedicated blacklist will be activated for violators of production localization requirements. This list will include manufacturers that submit false information about their product localization levels.
Additionally, the State Audit Service has drafted a National Strategy for Protecting the European Union’s Financial Interests, currently under government review. This strategy forms part of broader efforts to enhance transparency and accountability in public procurement. Audits of defense contracts conducted between March and May 2026 resulted in the recovery of 7.3 billion hryvnias to the state budget, covering overpayments and advance payments.
'When someone tries to cheat the state—by violating procurement procedures, failing to meet contract deadlines, or delivering substandard goods—they should be banned. That would make suppliers and contractors think twice, realizing that fulfilling contracts properly is the more profitable path,' emphasized Alla Basalaieva.
These measures aim to improve the public procurement system and prevent corrupt practices that often emerge during contract negotiations.
The State Audit Service’s push for a supplier blacklist reflects Ukraine’s commitment to increasing transparency in public procurement. This could mark a significant step in combating corruption and enhancing the quality of supplies, particularly in critical sectors like defense. Adopting European-style supplier controls also underscores Ukraine’s integration ambitions within European policy and legal frameworks.