# Shadow economy

The Economic Security Bureau has asked the Kyiv City State Administration to install bollards outside its premises due to the “risk of sabotage and reconnaissance activities” carried out using cars parked nearby. Each bollard costs almost 2,000 UAH.

Despite high-profile statements by law enforcement agencies regarding the dismantling of illegal schemes, the black market for e-cigarettes in Ukraine continues to grow. Experts estimate that in 2026 alone, the state budget risks losing around 10 billion hryvnias in tax revenue due to the activities of ‘grey’ networks.

According to research firm Kantar, the illegal e-cigarette market accounts for 93 per cent of the total market in Ukraine. As a result, experts estimate that the budget is losing 10 billion hryvnias in this sector.

Every year, the Ukrainian budget loses between 8 and 10 billion hryvnias due to the illegal vape market, according to various estimates. One of the largest chains accused of illegal activity is Uvape. Recently, the Director of the Economic Security Bureau, Oleksandr Tsyvinskyi, reported on the dismantling of this illegal scheme. However, the chain continues to operate, still evading tax payments.

Law enforcement officials have announced the uncovering of a large-scale tax evasion scheme involving hundreds of shell companies. Charges have been brought against the organiser and those involved.

Detectives of the Economic Security Bureau have carried out searches at a large chain of grocery stores operating across several regions of Ukraine. Investigators believe the company used thousands of sole traders to minimise its tax liability.

Amid high-profile statements from law enforcement agencies about a major crackdown on the vaping market, journalists from the Telegraf newspaper conducted their own investigation and found that the chain, which was recently the subject of high-profile raids, remains in operation.

People often ask in the comments: what’s the current situation with the infamous ‘Marketopt’? No conclusions have been reached yet. I’m receiving lots of reports again that the practices are the same: order splitting and non-fiscal receipts.

Danylo Getmantsev, a Member of the Ukrainian Parliament and Chair of the Verkhovna Rada Committee on Finance, Tax and Customs Policy, has stated that he is dissatisfied with the work of the new team at the Economic Security Bureau. According to him, the time has come to draw conclusions, so MPs plan to hear from the Bureau’s leadership as early as next month.

The reform of the Economic Security Bureau, on which international partners and Ukrainian businesses had pinned their hopes, is increasingly beginning to resemble a ‘sham’. Instead of a genuine overhaul of the agency, under the leadership of Oleksandr Tsivinsky, all that is happening is a change of signage and a ‘European-style facelift’ of the old corruption schemes.

The Ukrainian bureaucratic machine has mastered the art of pretence to perfection. Instead of demolishing dilapidated buildings right down to their foundations, we simply change the signs, paint the façade in the EU’s corporate colours and cut the ribbon. The militia became the police, the tax police transformed into the State Fiscal Service, and later, part of it evolved into the Economic Security Bureau.

The UK has granted the military and law enforcement agencies the power to detain vessels subject to sanctions in its territorial waters. The decision is aimed at Russia’s shadow fleet.