Ukraine's State Border Guard Service denies disruptions in ammunition supplies under US$551.8 million contracts
The State Border Guard Service (SBGS) has stated that it maintains constant oversight over the procurement process delegated for the needs of the Armed Forces of Ukraine. It emphasised that the overdue debt of UAH 1.7 billion (about US$40.7 million) related to the PHU Lechmar company does not concern the UAH 23 billion (about US$551.8 million) contract from the Ministry of Defence.
Source: Colonel Andrii Demchenko, spokesperson for the State Border Guard Service, in a comment to Ukrainska Pravda
Quote: "The undelivered products worth almost UAH 1.7 billion were overdue by a month and were supposed to be supplied at the end of February this year. However, this was due to force majeure circumstances confirmed by the authorised bodies, as stipulated by the contract terms. Such situations can arise during contract execution. Meanwhile, this particular case does not concern the supply of ammunition or the contracts worth UAH 23 billion."
Details: The officer stated that the topic of UAH 23 billion, allocated to the State Border Guard Service for ammunition procurement for the Armed Forces, continues to be manipulated. He noted that information obtained from the SBGS and made public by MP Yaroslav Zhelezniak is being distorted regarding deliveries and suppliers.
Referring to the SBGS response to the MP, Demchenko explained that the recorded overdue debt under state contracts concluded by the SBGS with PHU Lechmar Sp. z o. o. in 2024 amounts to UAH 26.5 billion (about US$636 million). The accounts receivable represent the period between payment for products and their delivery within the contractually defined timeframe. Demchenko believes that it is misleading to claim that this timeframe resulted in overdue debt.
Demchenko added that in addition to the UAH 23 billion allocated for procurement delegation in 2024, the State Border Guard Service had also received UAH 5.8 billion (about US$139.2 million) and UAH 31.1 billion (about US$746.7 million). In total, this amounts to nearly UAH 60 billion (about US$1.4 billion). Taking into account the UAH 26.5 billion of accounts receivable, the Armed Forces of Ukraine have already received purchased equipment worth the remaining amount.
Quote: "Regarding the accounts receivable of UAH 26.5 billion, I note that 23 billion of this amount was allocated for procurement at the end of November 2024, with contract payments made at the end of December 2024. The delivery deadlines have not yet passed and are scheduled throughout the year. So, as of now, there are no overdue accounts receivable concerning the UAH 23 billion.
The remaining amount of accounts receivable pertains to previous procurement delegations, and for some of these funds, the delivery deadlines have not yet expired.
The SBGS constantly monitors the status of accounts receivable and ensures legal actions in case of contract breaches by counterparties."
Background:
In December 2024, the Defence Procurement Agency of the Ministry of Defence stated that it had planned to use the UAH 23 billion (about US$551.8 million) transferred to the State Border Guard Service to finance pre-arranged contracts for the procurement of critical ammunition for the Armed Forces of Ukraine.
As a result, the agency noted that it was forced to request additional funding from the Ministry of Defence and seek new opportunities to finalise and finance already prepared contracts.
The SBGS explained that it holds a second-level financial manager certificate for arms and military equipment procurement and has experience in concluding contracts for ammunition supplies. It also stated that PHU Lechmar had no outstanding contracts with the SBGS or any delays in deliveries.
On 24 March 2025, Yaroslav Zhelezniak, First Deputy Head of Ukraine's Parliamentary Committee on Finance, Tax, and Customs Policy, citing an official response from the SBGS, claimed that the company responsible for supplying arms through the border service had failed to fulfil its obligations on time for UAH 1.7 billion.
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