Ukrainian tax authorities have uncovered a suspected large-scale fraud scheme involving more than 2,300 shell companies that funneled approximately $4.7 billion abroad through fictitious foreign trade operations.
In a statement on Tuesday, the State Tax Service of Ukraine announced these entities withdrew over 198 billion hryvnia (roughly $4.7 billion) from the country between early 2024 and the first quarter of 2026. The scheme primarily comprised exports: 1,243 companies conducted shipments valued at more than 176 billion hryvnia, while an additional 555 companies handled imports totaling over 18 billion hryvnia.
Lesia Karnaukh, the acting head of the Tax Service, noted hundreds of companies had been re-registered under identical individuals. She revealed seven people each managed more than 500 companies, with a combined total of over 7,000 business entities under their control. The tax service also reported that many suspect companies used the same IP addresses, computer networks, and physical registration locations—practices uncommon for legitimate businesses.
Officials prepared analytical conclusions for 557 entities indicating violations and signs of money laundering, which have been transferred to the Prosecutor General’s Office for further investigation.
Ukraine, often described as the “breadbasket of Europe,” has long struggled with illicit agricultural trade schemes. These include so-called “black grain” operations where products are purchased with cash and routed through fictitious legal entities to obscure their origin and avoid taxes. In such cases, agricultural goods may be resold multiple times to create a legitimate appearance of trade or classified as agricultural waste, resulting in significantly lower tax values. Illicit profits often remain outside Ukraine in foreign banks.
The sector has been impacted by EU policies that suspended tariffs and quotas on Ukrainian agricultural exports in 2022 to support Kiev’s economy. This arrangement triggered widespread farmer protests across Europe, leading the EU to reverse its policy in June 2025.
Ukraine has faced chronic corruption issues for years, exacerbated after the escalation of conflict with Moscow in 2022. Last year, anti-corruption authorities uncovered a $100 million kickback scheme at the state nuclear company Energoatom involving former Energy Minister German Galushchenko, who was arrested in February as he attempted to flee Ukraine.
Moscow has long accused Ukraine and the EU of being linked by “unified corruption chains,” claiming Western aid to Kiev—financed by ordinary taxpayers—is embezzled and shared with Kiev’s patrons through various corruption schemes.
