Employees from a Ukrainian arms firm conspired with defence ministry officials to embezzle almost $40 million earmarked to buy 100,000 mortar shells for the war with Russia, Ukraine’s security service has reported.

 

This comes as Kyiv attempts to clamp down on corruption to speed up EU and NATO membership as both blocs have demanded widespread anti-graft reforms before it can join them.

 

Ukraine’s security service, SBU, said on Sunday, January 28 that five people have been charged, with one person detained while trying to cross the Ukrainian border. If found guilty, the officials face up to 12 years in prison.

 

Ukrainian President Volodymyr Zelenskyy was elected on an anti-corruption platform in 2019, long before Russia’s full-scale invasion of Ukraine in February 2022.

 

Both Zelensky and his aides have portrayed the recent firings of top officials, notably that of Ivan Bakanov, former head of the State Security Service, in July 2022, as proof of their efforts to crack down on corruption.

 

The SBU says that the current investigation dates back to August 2022, when officials signed a contract for artillery shells worth 1.5 billion hryvnias ($39.6 million) with arms firm Lviv Arsenal.

After receiving payment, Lviv Arsenal employees were supposed to transfer the funds to a business registered abroad, which would then deliver the ammunition to Ukraine.

However, the goods were never delivered and the money was instead sent to various accounts in Ukraine and the Balkans, investigators said.

Ukraine’s prosecutor general says that the funds have since been seized and will be returned to the country’s defence budget.