# Shadow economy
The case against a group suspected of the illegal production and sale of tobacco has been referred to court
Law enforcement agencies have completed a pre-trial investigation into four individuals suspected of organising the full cycle of illegal tobacco production. The indictments have already been forwarded to the court.
Legal cigarette manufacturers have not seen any impact from the ESBU’s work, as the black market is growing, according to Forbes
Business representatives consider the impact of the ESBU’s work to be insignificant, as, despite the agency’s claims that an illegal cigarette factory has been shut down, the black market in Ukraine continues to grow rapidly. According to Kantar Ukraine, it has reached 19.8 per cent. The Bureau describes these findings as “premature”.
The Economic Security Bureau is facing systemic problems and a staffing crisis – a report by the Verkhovna Rada’s Temporary Investigation Commission
In its final report, the Verkhovna Rada’s Temporary Investigative Commission concluded that the Economic Security Bureau of Ukraine is showing only partial positive progress. At the same time, the committee highlighted staff shortages, weak internal controls and the risk of the agency losing its institutional capacity.
Border guards have uncovered a cigarette smuggling operation worth nearly 20 million hryvnias on the border with Romania
At the ‘Mamalyga’ border crossing, border guards foiled a large-scale attempt to smuggle tobacco products out of Ukraine. The cigarettes were concealed amongst a consignment of fresh strawberries.
Dozens of reposts by Tsyvinskyi instead of charges: how is the ESBU case against Telegram channels with a million subscribers progressing?
Six months after the opening of criminal proceedings against a number of Telegram channels, detectives from the Economic Security Bureau of Ukraine (ESBU) had still not announced any charges. Instead, the number of posts on these platforms concerning the director of the Economic Security Bureau has risen significantly, and their tone has changed dramatically: from accusations that Oleksandr Tsyvinskyi was working for hostile intelligence services to his being quoted extensively.
The Economic Security Bureau of Ukraine was unable to explain the mechanism behind the tax ‘compromises’ with the business community, as claimed by Tsyvinskyi Document
Despite Oleksandr Tsyvinsky’s statements regarding a mechanism developed by the Economic Security Bureau for dealing with businesses that have evaded tax, the agency itself was unable to explain what this mechanism entails, how it selects the companies with which it reaches a compromise, or what criteria they use when exempting offenders from criminal liability. In particular, they noted that the matter requires “further consideration”.
Ukraine loses 33.3 billion hryvnia a year due to the black market in cigarettes
In April 2026, the share of illicit tobacco products in Ukraine reached 19.8 per cent of the market. Losses to the state budget due to unpaid taxes are estimated at 33.3 billion hryvnias per year.
The former secretary to Pavlo Buzdygan, Deputy Director of the ESBU, received 565,000 UAH in payments prior to her dismissal
Tetyana Petrenko, a senior detective at the Economic Security Bureau and former secretary to the deputy director, received 565 thousand UAH in payments from the budget on the eve of her dismissal. At virtually the same time, at least four other Bureau staff members received monthly salaries ranging from 255,000 to 465,000 hryvnias.
A Verkhovna Rada committee has criticised the work of the State Bureau of Economic Security following the suspension of the anti-shadow economy campaign in the tobacco sector
The Parliamentary Committee on Finance, Tax and Customs Policy has criticised the work of the Economic Security Bureau and stated that the situation regarding the formalisation of certain sectors of the economy has deteriorated. Among the problem areas, MPs cited the tobacco industry, analytical work and the results of investigations.
Philip Morris on the illicit tobacco market: isolated raids by the State Security Service are not enough to solve the problem
Every year, Ukraine loses around 38 billion hryvnia in tax revenue due to the illegal market for tobacco products and vapes, and most of the retail outlets closed down by law enforcement agencies resume trading within a week. Isolated raids and searches are not enough to tackle the black market in this sector.
The empire of fake luxury: the state is losing billions of hryvnias due to the incompetence of the Economic Security Bureau and the tax authorities Investigation
Whilst the Economic Security Bureau of Ukraine (ESBU) reports on its fight against smuggling and the promotion of a level playing field for business, the Ukrainian market has been flooded with counterfeit global brands. Hermès bags, Dior shoes, Rolex watches and Graff jewellery are sold via Telegram, Instagram and showrooms in central Kyiv. Such goods enter the country illegally, and payments are made outside the scope of tax control. The result is billions in losses for the budget and legitimate businesses.
False information in the ESBU’s financial statements could result in criminal liability for its management – says a retired judge
The ESBU has been accused of inflating the figures for budget compensation in 2025 from 47 million to 3.8 billion hryvnia. The management faces criminal proceedings for falsifying the report - UNN
