ESBU Participated in the Discussion of Preliminary Results of the Annual Study on the European Illicit Cigarette Market Conducted by KPMG

The Head of the Detectives of the Economic Security Bureau of Ukraine (ESBU), Oleksandr Tkachuk, met with representatives of the international KPMG network, which provides audit, tax, legal, and advisory services. The discussion focused on recent trends in the illicit cigarette market observed by experts and the impact of Ukrainian illegal production on European countries. The event was also attended by specialists from the National Police of Ukraine and the State Customs Service.

According to KPMG experts, the volume of illicit cigarette consumption in Ukraine significantly decreased last year. Preliminary research data indicate a substantial decline in the number of “Compliment” brand illicit cigarettes in 2024, as well as a slight reduction in the level of counterfeits. At the same time, the decrease in illegal products was accompanied by growth in the legal market.

During the discussion, participants paid special attention to the calculation of products labeled “Duty Free,” which, in similar studies, must be separated from other foreign-labeled cigarettes to avoid distorting the results.

In turn, ESBU specialists presented ESBU efforts in countering the illicit circulation of excise goods.

According to Oleksandr Tkachuk, from January to April of this year alone, ESBU detectives seized over 9.5 million excise tax stamps, 2.54 million paper cigarette tubes, four production lines, and more. The total value of the seized property exceeds UAH 250 million.

“Detectives have submitted over 60 criminal proceedings to court concerning illegal cigarette manufacturing, storage and sale — including cases involving organized criminal groups. In 18 of these cases, court verdicts have already been delivered,” noted Tkachuk.

He also emphasized the importance of international cooperation in combating the illicit trade of excise goods and the need for legislative changes. These include strengthening liability under Article 204 of the Criminal Code of Ukraine, introducing samples of finished tobacco products, and prohibiting the leasing of equipment for cigarette production. A corresponding draft law is currently under consideration by the Committee on Law Enforcement of the Verkhovna Rada of Ukraine.