Illegal grain exports through shell companies are causing serious damage to the Ukrainian economy. For this purpose, shell companies are created, registered in the names of shell individuals, who conclude contracts to purchase grain from farmers and then export it abroad. As a result, the budget and the entire economy of the country suffer.
Deputy Prosecutor General of Ukraine Dmytro Verbytskyi spoke about the most common scheme of “black” grain exports on the air of the “United News” telethon. According to him, to reduce illegal grain exports, the Prosecutor General’s Office operates an interdepartmental group to combat criminal violations in the grain market.
"Our group works to prevent grain from leaving the country illegally. We monitor law enforcement agencies and coordinate them for a quick response if grain is illegally purchased for cash, taxes are not paid, and attempts are made to export it using forged documents at an understated price," Verbytskyi said.
The situation with non-return of foreign exchange earnings for grain exports to Ukraine is improving. According to the NBU, in September 2023 this amount was $8 billion, and as of June 2024 it decreased to $3 billion. Thus, budget revenues increased by $1 billion over the past year.
According to The Economist, over the past two years, Ukraine has lost about $3 billion in revenue due to grain deals. Disruptions to logistics chains due to Russian shelling have created conditions for farmers to “optimize” taxes. The shrinking domestic market due to the departure of about 6.5 million Ukrainians (15% of the pre-war population) and the mobilization of agricultural workers also contribute to tax evasion. Currently, about 40% of the grain harvest evades taxation.
To combat the “black grain”, the Bureau of Economic Security of Ukraine (BEB) is analyzing data to find suspicious cargo and improving information exchange between investigators and customs. The government is also loosening currency controls, in particular by improving the official exchange rate to reduce the attractiveness of withdrawing funds abroad. Tax revenues have already started to grow, but a complete victory over the “black grain” is still far from being achieved.
We remind you that to combat the shadow export of grain and oilseed crops, the Ministry of Agrarian Policy is working on establishing minimum export prices for agricultural products. In addition, a system of product traceability and harvest predictability is being developed.
