Ukraine tackling corruption, shadow economy and organized crime in the cigarettes market

As the Ukrainian people and government strengthen the foundations of a truly democratic state through reforms, the reinforcement of the justice system and the rule of law, there is no more appropriate time than now to step up the fight against corruption, the shadow economy and organized crime to ensure the long-term security of the country.

Resolute in its fight against the grey economy, despite the significant resistance of the shadow market, the Ukrainian government is dismantling large-scale schemes that have caused significant losses to the state budget. The scale of the illicit trade clearly indicates that organised crime groups are behind it. For instance, the illicit cigarette market alone reached a historical high of 25% of the total market in 2023, resulting in an estimated tax loss of more than USD 500 million last year. Faced with this ominous dynamic, law enforcement agencies are making efforts to halt the growth of the illicit trade and shut down some major shadow players, but the remaining shadow players momentarily take over their market share.

The Ukrainian government demonstrates sufficient institutional capacity, adequate legislative measures, and competent law enforcement to tackle the shadow economy. But the political will to continue the fight of the illicit cigarette market can only be sustained with the support of the international community.

To ensure that the people of Ukraine prevail in fighting for their future, to forge a comprehensive, just, and durable peace, it is important to continue to align international efforts to support the continued determination and efforts of the Government and people of Ukraine to build a strong and resilient society based on the rule of law.

To reaffirm unwavering support for Ukraine, its freedom, and its democratic future, we call on the G7 members to mobilize all political instruments and, together with Ukraine, make every effort to combat the most serious forms of organised crime, illicit trafficking, and corruption in the illicit cigarette market.