“The Security Service of Ukraine will continue to make all efforts to minimize budget losses, resulting from illegal tobacco trade,” underlined Ivan Bakanov on the 2^nd coordination meeting on the areas of concern of Ukrainian tobacco market, which took part on April, 30^th.

“First of all, we are talking here about state interests. Every year Ukrainian budget looses billions of hryvnas due to unpaid taxes. This is a huge sum of money even in normal times, to say nothing of the times, when Ukraine is both fighting with coronavirus and suffering economic losses resulting from quarantine,” emphasized the SBU Head.

During the meeting it was stated that Ukrainian budget suffered almost UAH 30-billion losses (USD 1,1 billion) for the last three years (2017-2019). Among the reasons were uncollected national excise duties, 5% retail excise duties and losses from illegal trade that rose from 1% in 2016 to 7% in 2019.

Ivan Bakanov called upon all those present to take more effort, so that “illegal tobacco market would give up”. In its turn, the Security Service of Ukraine will continue systematic work in that direction.

SBU conducted a range of big operations in the last several months. In particular, the SBU seized in Dnipropetrovsk region more than 6 million packs of counterfeit cigarettes worth more than UAH 100 million (USD 3,7 million), in Volyn region – 500,000 packs of cigarettes worth UAH 15 million (USD 555,600). In Bukovyna, the SBU employees blocked a clandestine production of cigarettes and seized 7 tonnes of raw materials, more than 80,000 packs of cigarettes and foreign excise labels (total value of the equipment and goods amounting to UAH 6 million (USD 222,000). SBU detained boarder guard officers, suspected of facilitating contraband in Transcarpathian and Chernivtsi regions. Also successful operations were conducted in the cities of Dnipro and Poltava.

“I would like to assure you – we will go further. But today we need cooperation with other law enforcement authorities and state institutions to intensify the work on all directions,” added the SBU Head.

All the meeting participants supported Ivan Bakanov’s position. Among other issues, the members of the meeting discussed implementation of additional measures to counteract dishonest counterparties; the ways to minimize budget losses from unpaid taxes; statistic data on risks connected with illegal tobacco trade growth due to planned increase of excise duties, provided by the Ministry of Finance, State Tax Service and the Ministry of economy.

Among the participants of the meeting were Ivan Bakanov, the SBU Head; Arsen Avakov, the Minister of Internal Affairs; Serhii Marchenko, the Minister of Finance; Ihor Petrashko, the Minister of Economic Development, Trade and Agriculture; Yurii Terentiev, the Head of Antimonopoly Committee, as well as representatives of the business community.

To remind, the 1^st coordination meeting on the areas of concern of Ukrainian tobacco market was held on February 11^th at the SBU initiative. On the 1^st meeting the SBU Head focused on introduction of efficient mechanism of control over turnover of excisable goods and implementation of the Concept “Electronic excise mark”, as well as criminalization of excisable goods smuggling.