The third shipment of 40 new Ukrainian armored personnel carriers BTR-4 sent to Iraq in February 2013 and rejected based on an acceptance procedure carried out by the Iraqi customer is currently "in a neutral zone," a source from the Ukrainian defense sector told Interfax on Tuesday.

In commenting at Interfax's request on the situation surrounding the implementation of the Iraqi contract and the media reports that the vessel carrying the vehicles reached a Ukrainian port in early January because of the Iraqi customer's refusal to accept them, the source said, "The vehicles are so far in a neutral zone."

The source declined to tell Interfax whether the new APCs will have to undergo the routine technical maintenance stipulated by the contract, saying only that they are in fairly good technical condition. "I can say only that, after the replacement of batteries and tanks with compressed air, the vehicles reached the necessary location at the port under their own power. The armored vehicles' technical characteristics were confirmed after eight months' exposure to adversarial climatic conditions," he said.

Media reported earlier that the ship carrying the new Ukrainian APCs returned to Ukraine in early January after staying several months in the Persian Gulf, as the customer reportedly refused to accept the vehicles because of cracks in their bodies.

The Ukrainian state company Ukrspecexport declined to comment on the media reports.

Ukraine concluded a contract worth over $550 million with Iraq in 2009 for supplying 6 multipurpose Antonov An-32 planes and 420 BTR-4 armored personnel carriers to this country. The principal entities responsible for the contract's implementation are the Kyiv-based Antonov aircraft manufacturer plus the Kharkiv-based Malyshev Plant and the Morozov Machine-Building Design Bureau, both incorporated in the state-run defense company Ukroboronprom.

The aircraft's shipment to the customer was completed in 2012.

Ukraine started shipping the armored personnel carriers in the spring of 2011, having passed a total of 128 BTR-4s, including the 40 vehicles sent to Iraq in February 2013 based on an acceptance procedure carried out in Ukraine.