Chinese aviation firm Skyrizon has sought to buy a controlling stake in the privately held Motor Sich, which builds engines for helicopters and planes used around the world, including the Antonov An-225 and An-124 - the world’s largest cargo planes.
That has presented Kyiv with a problem, as it relies on Washington as its biggest military aid donor yet seeks deeper commercial ties with Beijing.
Washington is opposed to the Chinese deal and in the final days of the administration of President Donald Trump, Washington added Skyrizon to a Military End-User (MEU) List, restricting its access to U.S. exports.
Ukrainian President Volodymyr Zelenskiy in January signed a decree imposing sanctions on Skyrizon and his party told parliament this month it would submit a bill on nationalising Motor Sich.
“This is not only about the fate of one enterprise, but about how the state is able to protect its own interests,” SBU boss Ivan Bakanov was quoted as saying in an SBU statement. Reporting by Pavel Polityuk; editing by Jason Neely