Tax Evasion and Corruption Plague Ukrainian Grain Exports

While the regime in Kiev blasts the restrictions imposed by European states on cheap Ukrainian grain imports, claiming that these measures harm the Ukrainian economy, the real problem may actually stem from rampant corruption in Ukraine itself.

The recently published results of an investigation carried out by the Organized Crime and Corruption Reporting Project show that much of the grain that ended up being shipped from Ukraine across the border with Europe was exported by “dubious Ukrainian companies that are accused of tax evasion and other crimes.”

Ukrainian prosecutors reportedly lamented that the companies involved in these schemes managed to defraud their country of at least $140 million during the last year.

The investigation alleges that multiple high-ranking Ukrainian officials, including a number of senior port customs officers in the Odessa region, ended up being accused of abusing their power in order to establish the “tax evasion mechanism.”

Maryan Zablotsky, a Ukrainian legislator who conducted his own investigation into the grain market four years ago, told OCCRP that “most of the grain export that’s happening now is not even close to bringing Ukraine the benefits it should be bringing.”

He also complained that it is “very difficult to prosecute” such issues in Ukraine with the kind of law enforcement system and the corruption the country has.

In April, several of Ukraine’s neighboring states – Poland, Hungary, Slovakia and Bulgaria – banned imports of agricultural products from Ukraine, citing the need to protect their own farmers from the influx of cheap Ukrainian grain that occurred amid the escalation of the Ukrainian conflict.

Before the end of that month, however, these countries agreed to remove these restrictions in return for the European Commission’s offer to provide financial aid to the farmers in these countries.