EXIT INTERVIEW: Export control head on the regulatory quagmire

BLUF: Pavlichenko concluded his five-year contract in SSEC. He urged adopting a new law on export control reform that will align regulations with European practices and enable the service to develop bylaws independently. He also supports the Ministry of Economy proposing a new permanent head to replace him.

The industry-friendly Oleksandr Pavlichenko was one of the most ambitious voices for simplifying and modernizing the export control system that has been constraining Ukrainian miltech growth.

Export controls are perhaps the preeminent regulatory issue for Ukrainian defense startups.

But as of March 6, Pavlichenko no longer leads the SSEC. We conducted an exit interview with him to talk about problems in Ukrainian regulations and the agency’s relationship with the Ministry of Economy, to which it’s subordinated.

Oleksandr Pavlichenko headed the SSEC for five years. The Cabinet of Ministers did not offer to extend his contract, opting for a fresh face in the role.

Now, Yulia Svyrydenko, First Deputy Prime Minister and Economy Minister, must propose a new leader. Until a new chairman is appointed, Oleh Tsilvik, Pavlichenko’s former deputy, will perform his functions.

The Cabinet will appoint the new head based on Svyrydenko's recommendation. Previously, the procedure involved open competition, but these have been suspended under martial law.

As part of their war efforts, many firms in Ukraine are creating a surplus of defense products, not all of which can be used by the Ukrainian army.

However, despite there being no legal prohibition on such products leaving Ukraine, in practice, the country’s exports of military and dual-use goods remain limited due to a dizzying maze of multi-agency bureaucracy.

Pavlichenko provided statistics on the number of new permits for military and dual-use goods granted from 2021 to 2024:

• 2021 – export: 974, import – 493;

• 2022 – export: 393, import – 939;

• 2023 – export: 599, import – 1133;

• 2024 – export: 517, import – 1203.

Pavlichenko personally thinks that Ukraine should focus on granting more export permits, particularly for drone technology (See our previous coverage of the obstacles to those permits here).

“I think that we need to deliberate and have [some] coordination mechanism between our agency, the Ministry of Defense and the Ministry of Strategic Industries. We have started a big discussion within the Intergovernmental Commission for Export Control, which is created by the President under the Security Council of Ukraine,” Pavlichenko said.

This intergovernmental commission is responsible for developing state policies on military cooperation and export control. Also, they’re in charge of authorization for the right to export/import military goods, establishing cooperation with foreign states, and monitoring compliance with international obligations.

Pavlichenko believes that the export control system needs changes overall. That's why he submitted a draft law, "On State Control over International Transfers of Strategic Goods," to the Ministry of Economy in September 2024. The ministry is working on it to propose it to the Cabinet of Ministers and then to the Rada.

It is expected to be adopted by the end of this year, according to plans discussed between the Ministry of Economy and SSEC.

The main goal of the draft law is to align regulations with the European Union, and a special status for the agency. 
"This would allow us to develop our own bylaws, instructions, and forms. These haven't been updated for decades," explains Pavlichenko.

Without special status, export regulations are handled by the Ministry of Economy, which lacks the relevant expertise. Export control work is highly over-regulated, said Pavlichenko. Communication with other ministries can also be tricky due to lack of awareness.

The beginning of the full-scale invasion showed that the service can make decisions quickly. If the war ends, the export service will need to be changed again. 

These two steps are essential for Ukraine, he argued: 

1. The defense-industrial complex must become a driver of development.

"Many companies have emerged that will be competitive in global markets. We need to help these companies develop collaborations with partners. This isn't just about profit, but also access to and exchange of technologies. There will be interest in our technologies in the West, and we have interest in Western technologies," Pavlichenko said.

2. There must be better cooperation with the Ministry of Economy, as expertise is required in forming export control policy. 

"Doors are always open since we work as one team. Another question is how well we can use these doors and establish communication. It's a two-way road," he said.

Looking back, Pavlichenko emphasized four achievements he was proud of during his time leading the SSEC:

1. Launch of the STRATLINK system, which allows economic entities to submit export and import applications in an electronic format;

2. A policy of openness and communication. Pavlichenko established a hotline for consultations, and initiated roundtables and webinars. He also launched a Facebook page, which allowed for open discussion;

3. Countering violations in export control, for example, the case with ‘Motor Sich’, which continued to supply helicopter engines to Russia despite the war;

4. Strengthening control over international transfers of military goods. “We established a post-licensing division that systematically monitors compliance with the conditions of issued permits and checks the end-use of goods,” Pavlichenko said.

Currently, Oleksandr Pavlichenko is open to job offers, though he has had several approaches from both the public and private sectors. Despite the end of his contract, he remains ready to provide his expertise on export control.

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