Cigarette smuggling in tanks: Ukraine's Economic Security Bureau issues suspicion notices

This is reported by Espreso TV.

In February 2024, on the border between Ukraine and Romania, customs officers, together with the State Bureau of Investigation, detained gas tankers that were registered as empty. Upon inspection, 335 boxes of counterfeit Marlboro cigarettes were found inside the tanks. This marked the first time law enforcement officers had exposed a systematic smuggling channel of counterfeit Marlboro cigarettes into the EU. The case became high-profile and attracted the attention of international partners and G7 ambassadors.

"If we are talking about counterfeit cigarettes, almost half of the cigarettes seized in the first half of 2024 are attributable to this case. One of the victims in the criminal proceedings suffered damages exceeding UAH 4.5 million. Not to mention how much the state budget has lost in taxes," said Volodymyr Hrunskyi, an intellectual property attorney.

"Secondly, it is about the quality and thoroughness of the investigation. We uncovered a criminal scheme that identified not only the perpetrators but also the organizers. Moreover, they have now been served with suspicion notices," he added.

The illegal tobacco trade remains a significant underground business in Ukraine. The losses to the state budget are estimated at about UAH 23 billion. However, the level of illicit trade has been declining over the past six months. According to Kantar-Ukraine, it stood at 14.6% in July 2024.

"We attribute this to the work of the Tax Committee and the Temporary Investigation Commission, which at the beginning of the year focused on this issue. They began holding joint meetings with the Economic Security Bureau, the Tax Service, and the National Police, all of whom became more active, alert, and started closing down retail black spots," Oleh Hetman, coordinator of the Economic Expert Platform's expert groups, told reporters.

European experts believe that combating the illegal tobacco trade can save Ukraine billions of hryvnias to fund its defense against the Russian invasion.

According to former European police officer Howard Pugh, the organizers of illegal schemes earn substantial amounts of money, while the government suffers significant losses. In his view, these lost funds could be used for humanitarian projects, rebuilding Ukraine, and supporting the military.

"This is a fairly large illegal market. As a result, criminals are profiting while the state is losing money. Hypothetically, if you were to tell President Zelenskyy tomorrow, 'Here’s €823 million, you can use it for humanitarian projects, reconstruction, or military aid,' this would represent a major source of lost revenue for the government," Howard Pugh, a former Europol employee, told reporters.

A year ago, for the first time, compensation of UAH 1.4 million was recovered from contract workers involved in the illegal tobacco trade. During searches, more than 5.5 tons of tobacco, cigarette production and packaging lines, duty-free labeling, and finished products were seized. The total value of the seized goods is estimated at UAH 20 million.

"In this case, the main difficulties were not related to the investigation itself, but to the execution, specifically the destruction of the counterfeit products and equipment. The enforcement service refused, contrary to legal requirements, to involve the rights holder in supervising the destruction," said lawyer Volodymyr Hrunskyi.

The work continues, and the legal business community expects that law enforcement will eventually bring more charges directly against the producers of illegal products.