Who is behind the tobacco smuggling from Ukraine

In Ukraine, under the protection of officials, smuggler-businessmen freely ship large batches of cigarettes abroad, damaging both the country's reputation and its budget. For instance, an incident recently occurred – an illegal supply of tobacco to Hungary. This could have serious consequences if the authorities do not take action.

Among the alleged organisers of the scheme is a tobacco factory owner, a businessman.

The scheme was uncovered by chance. In early October 2021, a crane broke down at the Chepel wharf in Hungary, and a barge, allegedly transporting salt from Ukraine under the brand "Artemsol", was sent for unloading to the city of Paks. During unloading, one of the containers was damaged, and cigarettes began to fall out, attracting attention. 

After a full inspection of the cargo, it turned out that a huge batch of smuggled cigarettes was hidden under the salt packaging – according to Hungarian authorities, 2,375,465 packs. At an average price of 3 euros per pack, this would amount to approximately 7 million euros (over 214 million hryvnias). 

Hungarian law enforcement agencies seized the smuggled batch and also discovered that three similar barges had been sent from Ukraine in 2021 alone – in April, June, and July. Hungarian authorities initiated a customs investigation, as it is impossible to smuggle cigarettes instead of salt unnoticed: these goods have different weights, which affects the ship's draft, visible to the naked eye and reaching up to 70 cm. It was obvious to Hungarian law enforcement that local customs officers might be involved in the smuggling.

Who is behind the smuggling

The recipient of the smuggled cigarettes is the Polish company Crystal Invest with Ukrainian owners. It was founded by the son of former Deputy Minister of Transport and Communications Volodymyr Badahov – Vyacheslav Badahov, as the company itself states on its website and in its social media profiles. 

According to YouControl data, Badahov founded a total of 15 companies and is involved with 42 (operating in trade, investments, law, etc.). Most of these companies are registered in Poltava region. Badahov's father (the former deputy minister) is a member of the supervisory board of the Poltava Mining and Processing Combine. Both the recipient and the cigarette brand – Marvel – are known. Their manufacturer is the Vynnykivka Tobacco Factory in Lviv region. Production is located at the facilities of the former "Lviv Tobacco Factory" (according to YouControl, such a legal entity no longer exists). 

The enterprise is controlled by the notorious businessman and regional council deputy Hryhorii Kozlovskyi, whom the media have repeatedly accused of involvement in smuggling, although he has claimed to work strictly within the law. The Marvel trading house is owned by another Lviv deputy (this time from the city council) – Oleksii Ryznyk, and the head of this company is, once again, Kozlovskyi. 

Kozlovskyi's reputation has been questioned on multiple occasions: — The deputy was accused of creating his own method of evading excise duties using "duty-free". This involves "recording" several dozen packs of cigarettes without excise duties to passengers, who are even unaware of it. Then the cigarettes are moved from warehouses to shops and distributed without paying excise duties. — Journalists and market analysts reported that the Vynnykivka Tobacco Factory produces 62% of illegal cigarettes. Besides Marvel, these are the Jin-Ling, Compliment, Strong, Lifa, LS, and "Kyiv" brands. — Kozlovskyi was also accused of felling forests and destroying lakes for the construction of a sports complex (the businessman, among other things, owns the "Rukh" football club. — The State Fiscal Service (SFS) sent official letters in April and July 2021 to the regional office of the Tax Service for work with large taxpayers, as well as to the head of the Verkhovna Rada Committee on Financial, Tax and Customs Policy, Danylo Hetmanets. Copies of the documents (to read the full texts of the letters, scroll to the end of the article) mention the "Vynnykivka Tobacco Factory" and the LLC "Marvel".

This concerns the investigation of another "tobacco" scheme – tax evasion by applying excise stamps for cigars to cigarette packs. It is not ruled out that Kozlovskyi's business, which has enterprises in western Ukraine, may be linked to MP Vasyl Petiuvka. The latter is sometimes called the "curator of cigarette smuggling" in Zakarpattia. Both Kozlovskyi and Petiuvka are listed among the deputies and officials belonging to the "tobacco" group of influence. 

Previously, Petiuvka corresponded directly in the parliamentary hall about suspicious cigarette supplies, and also called for blocking the Law on Protection of Public Health from the Harmful Effects of Tobacco Smoke.