Friday, July 7, 2023

"Ukrainian Grain Exported Through Tax-Avoiding ‘Shell Firms,’ Robbing Country of Wartime Revenue"

From the Organized Crime and Corruption Reporting Project, July 5:

Reporters looked into who imported millions of euros of Ukrainian “black grain” into the European Union. They found liquidated companies, proxies — and multinational agribusiness giants.

  • Ukraine is investigating hundreds of firms, many created since Russia’s full-scale invasion scrambled the grain market, for allegedly failing to properly document their trading in Ukrainian grain or to pay taxes on it.
  • Some of the EU companies that imported this grain from Ukraine raise serious questions themselves.
  • Several had been ordered shut down by Hungarian authorities but continued trading. Some of the men listed as their owners and directors were patients in psychiatric hospitals; one is an aspiring TikTok influencer.
  • The Romanian subsidiaries of major international agribusiness traders — COFCO International, Bunge, Viterra, and Ameropa Holding — also imported grain through Ukrainian companies under investigation.

This April, hundreds of Romanian farmers used tractors to block the Halmeu border crossing with Ukraine, protesting a flood of cheap grain from their war-torn neighbor. “We want to help, but not at any price!” they chanted.

“The imports from Ukraine are a big loss for us,” said David Gheorghe, a farmer who is also the mayor of the nearby town of Moftin. “They’ve filled the country with Ukrainian grain, and for us this is unfair competition.”

With Ukraine’s seaports blocked since Russia’s full-scale invasion last year, the number of grain trucks crossing Halmeu has skyrocketed: From just 10 per month in the early days of the war to 1,600 per month last fall.

In response to the farmers’ protests, Romania and other countries temporarily banned Ukrainian grain imports.

Ukraine’s President Volodymyr Zelensky has criticized the European restrictions as a threat to his country’s economy.

But Ukraine’s agricultural sector has also been damaged by the country’s own corruption, a new investigation by OCCRP and RISE Project, OCCRP’s Romanian member center, has found. Trade data obtained by reporters shows that, in the first seven months of Russia’s full-scale invasion, much of the grain passing through Halmeu and other border crossings was exported by dubious Ukrainian companies that are accused of tax evasion and other crimes.

These companies are among more than 300 under investigation by the Ukrainian authorities since last September. Prosecutors say they defrauded the state of at least $140 million last year alone.

As part of the investigation, authorities have seized tens of thousands of tons of grain from some of the companies, according to court records seen by reporters. Some have challenged these seizures, and the court cases are ongoing.

Multiple high-ranking officials are accused of abusing their positions to help set up the tax evasion mechanism, including senior customs officers working at ports in the Odesa region....