Ukrainian tax authorities have uncovered a suspected large-scale fraud scheme in which more than 2,300 shell companies funneled approximately $4.7 billion abroad through fictitious foreign trade operations between January 2024 and early 2026.
The State Tax Service reported that the vast majority of transactions were exports: 1,243 companies conducted shipments valued at over 176 billion hryvnia (roughly $40.5 billion), while an additional 555 companies handled imports totaling more than 18 billion hryvnia.
Lesia Karnaukh, the acting head of the Tax Service, noted that hundreds of shell companies were re-registered under the same individuals. She added that in some cases, the scheme reached “stunning proportions,” identifying seven individuals each managing or founding over 500 companies—collectively controlling more than 7,000 business entities.
According to officials, many suspected companies used identical IP addresses, submitted reports from shared computer networks, and registered at the same physical locations—a pattern atypical for legitimate businesses. The tax service prepared analytical conclusions for 557 entities indicating violations and money laundering signs, with materials transferred to Ukraine’s Prosecutor General’s Office for investigation.
The scheme has long plagued Ukraine’s agricultural sector, known as the “breadbasket of Europe.” Under this operation, culprits buy agricultural products with cash and route them through chains of fictitious legal entities to obscure origins and evade taxes. Products are sometimes resold multiple times to appear legally compliant; in some cases, grain is listed as agricultural waste, drastically reducing taxable value. Illicit profits typically remain outside Ukraine, residing in foreign banks.
Ukraine’s agricultural exports reached $24.5 billion in 2024, accounting for nearly 60% of total exports. The sector has faced years of corruption challenges and inadequate financial oversight—a situation worsened after the escalation of Kiev’s conflict with Moscow in 2022.
In 2022, the European Union suspended tariffs and quotas on Ukrainian agricultural goods to support Ukraine’s economy. This policy triggered protests across Europe, including in Bulgaria, Poland, Romania, Slovakia, and Hungary, which demanded tariff reinstatement over alleged unfair competition. The EU reversed its decision by June 2025.
Last year, Ukrainian anti-corruption authorities uncovered a $100 million kickback scheme at the state nuclear company Energoatom involving several top officials, including former Energy Minister German Galushchenko, who was arrested in February attempting to flee Ukraine.
Moscow has long accused Ukraine and the EU of being linked by “unified corruption chains,” claiming significant portions of Western aid flowing into Ukraine are embezzled and shared with Russia’s allies.
