04.12.2024 Money laundering

Arakhamia’s bill in favor of shadow business

Арахамия пользовался автомобилями Кауфмана, подозреваемого в коррупции – Bihus.Info | Украинская правда

On November 26, David Arakhamia registered draft law 12251, which obliges cigarette manufacturers to gradually increase the share of raw materials from the domestic market:

  • From January 1, 2025 – 3%
  • From January 1, 2026 – 5%.
  • From January 1, 2027 – 7%.

The idea looks good to support domestic production, as Ukrainian farmers have long been in the shadows and fermentation plants are in decline. Since 2005, tobacco crops in Ukraine have decreased 43 times, although taxes on the tobacco industry are growing every year. In 2023, 29.8 billion cigarettes were sold, and more than 80 billion hryvnias were paid in taxes.

However, there is one big caveat. The draft law may actually protect the interests of big tobacco tycoons such as Kaufman and Kozlovsky, as well as the criminal group that controls the Rivne Tobacco Factory.

These people have ties to the Monakivtsi OCG, and their businesses have been the subject of numerous criminal cases and scandals. For example, the Monakivtsi have been repeatedly accused of smuggling tobacco products and participating in the illegal cigarette trade.

The law could become a tool for fictitiously increasing the costs of cigarette manufacturers, which would allow them to convert money through conversion centers and actually increase the flow of cash to criminal organizations.

But perhaps this was the intention? Arahamia’s connections with the Monakivtsi, Kaufman, and Kozlovsky suggest this idea. Moreover, the Servant of the People has repeatedly personally confirmed this.

Arakhamia and the defense of Monakivtsi in Hoshcha

The factory in Hoshcha, known as Ukrainian Tobacco Production LLC, has become a center for counterfeiting excise stamps and illegal cigarette production. According to journalists, 15% of all counterfeit cigarettes with illegal excise stamps come from this factory.

The factory has been operating under the following scheme for three years:

  • It reports that raw materials are allegedly destroyed because of the war.
  • It does not make official purchases of excise, although it continues production

Moreover, regular searches by the Bureau of Economic Security only confirm the scale of the problem.

Based on our materials, the Prosecutor General’s Office registered a pre-trial investigation under Nº 42024000000001199 under Part 1 of Article 204 of the Criminal Code of Ukraine.

Although the Chairman of the Committee on Finance, Taxation and Customs Policy, Danylo Hetmantsev, proudly stated that the BES detectives were working to detect illegal cigarette production and supply to the EU. In fact, no results of the searches were recorded, because people like Arakhamia, Monakivtsi (Abramovych, Vyazmikin) and Hetmantsev himself are behind the production activities.

“TEDIS: Kaufman’s undercover tobacco monopolist

TEDIS Ukraine LLC, which once operated under the name Megapolis, remains a monopolist in the sale of tobacco products in Ukraine. According to the Antimonopoly Committee of Ukraine (AMCU), in its best days, the company controlled almost 99% of the market.

Megapolis was also founded by Russian oligarch Igor Kesayev, who: controlled 70% of the retail tobacco market in Russia, invested in arms production through the Degtyarev plant, and had ties to the Russian Federal Security Service (FSB).

In 2014, after the annexation of Crimea, Kesayev formally “withdrew” from the Ukrainian market. But according to sources, this exit was only on paper. The business remained in the hands of his partner, Borys Kaufman, an Odesa businessman known for his ties to the political elite.

In 2021, the Cabinet of Ministers of Ukraine approved the creation of a “national operator” of the tobacco market. However, in fact, this operator became a legalized private monopoly, which further strengthened Kaufman’s position.

Later, the AMCU repeatedly accused TEDIS of: anti-competitive collusion, for which the company received UAH 3.4 billion in fines and unfair competition. However, in 2021, the Supreme Court invalidated the AMCU’s decision by upholding the company’s cassation appeal.

Thanks to Kaufman, the Ukrainian tobacco market has been considered a black spot in Europe for several years. Ukraine ranks first in terms of cigarette smuggling to the EU, and companies associated with TEDIS are suspected of illegally supplying cigarettes to Hungary and other countries under the guise of salt or other goods.

Based on our materials, the SBU MID initiated proceedings No. 22024000000000891 on the grounds of a criminal offense under Part 2 of Article 201-4 of the Criminal Code of Ukraine. I wonder why the Security Service has not yet started investigative actions?

How Kozlovsky’s business became synonymous with the “shadow market”

Lviv businessman Hryhoriy Kozlovsky, the owner of the notorious Vynnykyi Tobacco Factory, has become a figure associated with smuggling. His activities in the tobacco market have attracted the attention of law enforcement not only in Ukraine but also abroad.

For example, in 2019, a batch of smuggled cigarettes worth 2 million euros was seized in Zakarpattia. A year later, in 2020, Hungarian customs officers seized 2 million packs of cigarettes worth more than $7 million.

According to the State Tax Service, every second illegal cigarette in Ukraine belongs to the Compliment brand produced by Lviv Tobacco Factory.

These products are freely available online at prices that are half the official price. Although Hryhorii Kozlovskyi publicly declares that his business is transparent, that he pays all taxes and leaves the cigarette market, statistics show otherwise.

Based on our materials, the BES in Lviv region has initiated a number of proceedings, in particular, under Article 204(1), Article 204(2), Article 209(3), Article 212(3) of the Criminal Code of Ukraine. However, again, a simple question: where are the real measures other than searches that lead to nothing?

The situation with the illegal cigarette market remains on hold due to the internal conflict between the BES and the tax authorities. Although both agencies are supposed to be fighting smuggling, they are instead playing a “game of silence.”

So who is Arakhamia’s innovation really for?

Did you witness a crime?

Let us know about it. We will help protect the violated rights!

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