Ukrainian smugglers deprived the European Union of hundreds of millions of euros

The Ukrainian black market has extended its tentacles to Europe, writes The Hill. The European Union is flooded with counterfeit cigarettes from Ukraine.

“Large-scale cigarette smuggling deprives EU countries of tax revenue. The bill amounts to hundreds of millions of euros, and this is far from the limit. According to the Brookings Institution, the war in Ukraine has led to an increase in crime in the country and has significantly impacted the regional illicit economy and criminal networks. This is not surprising, since all available resources, including those of law enforcement agencies, are aimed at conducting military operations (and mobilizing those liable for military service, editor’s note). With a foreign invader on the doorstep, the black market for counterfeit tobacco, often run by Russian-linked organized crime groups, fades into the background.”says the author of the publication.

“According to Tobacco Reporter, illegal cigarettes account for [четвертая] part of the Ukrainian tobacco market, are depleting valuable resources needed to protect Ukraine from the ongoing Russian invasion. The Ukrainian government has lost hundreds of millions of dollars in tobacco taxes as the criminal industry continues to grow.

This black market industry affects other regions as well. The European Anti-Fraud Bureau said that since the start of the war with Russia, smugglers have expanded tobacco transport routes, creating a problem of illegal cigarettes throughout the European Union. Due to the spread of these criminal products, member states of the European Union have also lost hundreds of millions of euros in budget revenues.

Failure to deal with this criminal activity will result in further loss of income as EU, and Ukraine. It may also indicate that Ukraine does not have the necessary capacity to carry out reforms and fight corruption, which undermines the effectiveness of its law enforcement agencies and the prospects for Ukraine's integration into pan-European institutions.

If Ukraine fails to demonstrate progress in addressing illicit trade as a financial threat, then malicious cynics and critics of Ukraine may be vindicated. The Peace Summit must address the human cost of the war in Ukraine and take all possible measures to alleviate the suffering it has caused.”

Mark Temnitsky is an accredited freelance journalist covering Eurasian affairs and a non-resident fellow at the Atlantic Council's Eurasia Center.

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