The Economic Security Bureau of Ukraine held a meeting with representatives of the Ukrtyutyun Association. During the event, the participants discussed the results of the ESBU's work, systemic problems faced by the ESBU specialists, as well as proposals for further steps to combat illegal trafficking of excisable goods.

According to Natalia Fesyun, Director at Ukrainian Tobacco Manufacturers' Association «Ukrtyutyun», the data of the latest «wave» of the study of the illegal tobacco market conducted by KANTAR Ukraine shows that the share of the shadow tobacco market has decreased to 12.6%, compared to 25.7% in October 2023.

«We are finishing the year quite optimistically, as evidenced by the KANTAR data. However, after the end of active measures by law enforcement and regulatory authorities, illegal products began to appear on the shelves again. Therefore, we hope that the pace of the fight will not slow down» said Fesyun.

Also, representatives of leading tobacco manufacturers thanked the Economic Security Bureau of Ukraine, the State Tax Service of Ukraine and the State Customs Service of Ukraine for their work.

In particular, Philip Morris Ukraine's trademark protection manager Serhii Verbov noted recent high-profile cases of seizure of cigarette production lines, noting that each such line is a real prevention of the growth of the illegal cigarette market by 1-2%.

Also during the meeting, Serhii Perkhun, Acting Director of the ESBU, informed the participants about the results of the ESBU's work in combating illegal trafficking of excisable goods.

«Since the beginning of this year, 237 criminal proceedings have been brought to court, 16 industrial production lines have been seized, one of which has been transferred to the ARMA. The total estimated value of the seized assets is over UAH 1.3 billion. Also, at the initiative of the ESBU, the State Tax Service of Ukraine cancelled the licences for the production of tobacco products of 3 companies» Perkhun said.

In addition to the results of the work, the participants also discussed plans to develop legislative changes that would facilitate the de-shadowing of the sector. These include increasing the liability for committing crimes under Article 204 of the Criminal Code of Ukraine, as well as amending the procedure for storing seized excisable goods and equipment for their manufacture.

According to the members of the Association, the initiatives under discussion, together with the introduction of control posts and a round-the-clock video surveillance system at tobacco manufacturing facilities, will have a positive effect on reducing the share of the shadow cigarette market.

As a reminder, starting from 1 October, to prevent illegal cigarette manufacturing activities, the State Tax Service has set up posts and video surveillance at enterprises engaged in the production of tobacco products and/or fermentation of tobacco raw materials.

In accordance with the Law of Ukraine «On State Regulation of Production and Circulation of Ethyl Alcohol, Alcohol Distillates, Bioethanol, Alcoholic Beverages, Tobacco Products, Tobacco Raw Materials, Liquids Used in Electronic Cigarettes and Fuel», representatives of the State Tax Service of Ukraine must exercise constant direct control:

- to monitor compliance with the procedure for registration of equipment for the preparation or processing of tobacco, tobacco raw materials, and industrial production of tobacco products

- receipt of tobacco raw materials, their release, storage, processing and use in the production of fermented tobacco raw materials and/or tobacco products

- compliance with the norms of losses and waste of unfermented tobacco raw materials during storage, transportation, production of fermented tobacco raw materials, losses and waste of fermented tobacco raw materials during its storage, transportation and use in the production of tobacco products, consumption of fermented tobacco raw materials for the production of tobacco products

- the use of excise tax stamps and payment of excise tax.

These amendments should make it impossible for official manufacturers to manufacture and sell cigarettes outside the scope of the State Tax Service of Ukraine.