The Security Service of Ukraine (SBU) and the Bureau of Economic Security have reported uncovering a corrupt scheme involving the export of Ukrainian grain.
According to the Bureau, the scheme cost the state $186 million in 2022 in unpaid taxes.
More than 10 high-ranking officials, including the deputy head of one of the departments of the State Customs Service and management of the Odesa Customs, are believed to be involved in embezzlement, SBU reported on Jan. 3.
The report said the scheme included using more than 370 commercial entities with signs of fictitiousness to evade taxes and avoid paying mandatory payments to the budget.
According to the investigation, wheat was bought en masse from private farmers, agricultural enterprises, and large agricultural holdings, then transferred from one intermediary company to another before being sold to exporters for sale abroad. Through this process, the participants allegedly avoided paying the necessary taxes and fees.
The Bureau warned the State Customs Service about using risky enterprises in export procedures. However, the customs officials didn’t consider the warning and allowed the sale of more than 1 million tons of grain products to merchants abroad, SBU said.
The wheat was exported through the grain terminals in three ports in Odesa Oblast.
During 30 searches of the suspects’ administrative premises, residences, and ports, law enforcement officers found records, documents in electronic form, and mobile phones with evidence of processing the deals in question.
Grain exports are a crucial source of income for Ukraine’s economy – as well as a factor in the global food security. It has been threatened in 2022 when Russia blocked Ukrainian ports as part of its invasion of Ukraine.
In July, the United Nations and Turkey brokered a deal to unblock the ports for grain exports.
In late December, Turkish Transport and Infrastructure Minister Adil Karaismailoglu reported that 585 cargo ships with more than 15 million tons of agricultural products have left Ukraine through the UN-backed “grain corridor” since August.
The “grain corridor” or the Black Sea Grain Initiative is the U.N.-backed deal that Ukraine, Russia, and Turkey signed in July to unblock Ukrainian grain exports amid Russia’s full-scale invasion.