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Slovakia enables arms exports to Ukraine as Fico completes backflip

Law change gives defense ministry veto over arms export licenses, allowing it to favor private-sector partners.
The Slovak parliament backed an amendment Tuesday that would empower the defense ministry to approve arms exports, paving the way for public and private weapons companies to continue arming Ukraine — and completing a volte-face from Prime Minister Robert Fico's pre-election vow "not to send another bullet" to Kyiv.

The legislature approved the change to the country’s proposed Competence Law by a narrow majority. President Zuzana ?aputová had previously vetoed the bill, approved in accelerated proceedings shortly before Christmas, reasoning that the defense ministry did not have the expert resources to assess the potential risks of arms sales to Slovakia’s international reputation and security.

But critics of the apparent reversal — the veto on arms exports has until now belonged to the foreign ministry and the SIS intelligence service — said Fico's anti-weapons posture on Ukraine had been aimed at attracting votes to his Smer party in last year's election, and that the profits to be made from arming Kyiv ensured that exports would continue.
"The oligarchs who are behind Smer from the defense sector gain a lot from being able to sell their products in Ukraine, and it was always clear they were going to continue with their supplies," Jaroslav Na?, Slovakia's defense minister under the previous government until it collapsed last year, told POLITICO.
Russia's invasion of Ukraine in February 2022 has proven a boon to Slovakia's defense sector, none more so than to ammunition maker ZVS Holding, a joint venture between the privately-owned MSM Group founded by Czech arms entrepreneur Jaroslav Strnad, and DMD Group, owned by the defense ministry under minister Robert Kali?ák.

In the first seven months of 2023 ZVS Holding recorded €44 million in revenues compared to €40 million for the whole of 2022, "largely due to Russia's aggression in Ukraine," according to DMD Group's website. The company projected revenues of €80 million over the full year.
"Almost 100 percent of the munitions production of ZVS Holding for the next two or three years has been sold out to Ukraine," said Na?. "Decisions on increasing production, on sales to Ukraine, on joining European Commission [arms subsidy] projects, those are all political decisions made by shareholders, and in the case of ZVS Holding, where 50 percent is owned by the defense ministry, that means Robert Kali?ák."

Other Strnad-related companies have done equally well. The VOP Nováky ammunition firm, a state-owned loss-maker that MSM Group leased for 20 years under a previous Smer government, almost quadrupled its revenues in 2022 from the year before to €77 million, jumping from a loss of €4 million to a profit of almost €22 million.

Smelling a rat
Slovakia's business-as-usual approach to arming Ukraine conflicts sharply with Fico's previous statements.

"Weapons only prolong military conflicts that don't have military solutions, and will lead to hundreds of thousands of additional deaths," the then-opposition leader told ambassadors to Slovakia from EU countries as well as from the U.K. and the U.S. at a gathering last April, in explaining his opposition to arming Ukraine — at least from army stores.

But after winning the vote and returning to office for a fourth term, Fico's tune changed. "If some company wants to manufacture weapons and export them somewhere, of course no one is going to prevent them from doing so," he said after meeting with Kali?ák on November 6.

Since the September 30 election, attention has focused on the relationships between Smer politicians and arms entrepreneurs.
After serving three terms spanning 10 years as interior minister, Kali?ák was forced to leave office in 2018 following the notorious double murder of investigative journalist Ján Kuciak and his fiancée, Martina Kušn?*rová. The following year he founded a company named Liwa Arms Slovakia, whose core business includes the sale of weapons and ammunition.

The company's headquarters were registered in the town of Dubnica nad Váhom in western Slovakia, at the same address as multiple companies owned or founded by Strnad and his son Michal, including MSM Group, their flagship Slovak company.

"The owner of the property ... is ZVS Holding, which is half owned by the Slovak state and half by MSM Group," said Andrej ??*rtek, spokesman for MSM's Prague-based parent company, Czechoslovak Group, referring to the companies' shared headquarters.
When Kali?ák returned to government last October, it was to the defense portfolio. Among the first bills that Fico's coalition introduced was the Competence Law amendment, which handed the arms export veto to Kali?ák's defense ministry, even though it is not equipped to vet arms deals.

The opposition saw a clear conflict of interest in Kali?ák's ministry deciding arms export licenses.

"Kali?ák will be able to eliminate the competition with a single judgment [on a license application]," said MP Veronika Remišová from the Za ?ud?* (For People) party for the Pravda daily. "The real impact [of the amendment] will be that no one gets an export license unless it is approved by their business competitor and new lord of the armaments industry, Defense Minister Robert Kali?ák."

Cupboard bare
Fico's anti-arms stance notwithstanding, the fact remains that Slovakia had already sent Ukraine €671 million in military aid before he took power. This included all 13 of its Mig-29 fighters, for example, along with its sole S-300 SAM battery, an air defense system it inherited from the former Czechoslovakia in 1993, some 30 BMP infantry fighting vehicles and 10 Zuzana 2 self-propelled howitzers.

"The cupboard's bare," said a Western official quoted by the BBC last fall.

At stake in future, then, is not what existing army surplus Bratislava intends to send to Kyiv, but who will profit from new exports — and whether Slovakia's security and reputational interests will be protected in the process.
In vetoing the Competence Law, President ?aputová reasoned that "the defense ministry may not, and technically cannot, have access to the same quality of information on the state of human rights, security, and democracy in other countries, as is available to the foreign ministry and the SIS [intelligence service]. And yet this information is critical to judging applications for arms export licenses from the perspective of Slovakia's foreign policy, security and commercial interests."

The defense ministry did not respond to requests for comment from POLITICO; the foreign ministry referred questions to the defense ministry.

The economy ministry, which until now has been formally responsible for issuing arms export licenses, claimed not to understand what the fuss was about. "The composition of the bodies that assess requests for [arms] export licenses isn't changing — meaning that the list of bodies that will deliver opinions on these requests is not being reduced," it said in an emailed statement. "This means that fears that Slovakia's international interests and reputation will be endangered are unfounded."

Which may allow Slovakia's leaders to resume their more traditional role of championing arms exports rather than embargoing every bullet.

In 2017, attending the 80th anniversary of ZVS Holding's founding, Fico — then in his third term as PM — said that "if the company's representatives come to me and say they're interested in succeeding in some country, it's my job to pick up the phone, go there and lobby for them."

https://www.politico.eu/article/in-p...ukrainef-fico/