Cigarette Ssmuggling and Corruption in Ukraine: Current Challenges and New Trends

Abstract

Considering the current problems associated with cigarette smuggling, the authors of the article highlight new challenges that arise in connection with the growing volume of counterfeit and contraband cigarettes smuggled to the European Union (EU) from Ukraine. One of the main reasons behind this trend is the continuation of the conflict in Ukraine, which exacerbates the economic situation, accompanied by an increase in unemployment due to the destruction of production capacities and infrastructure, the breakdown of economic and social ties between different parts of Ukraine, and the weakening of the financial, banking, transportation, and communication systems. Conflict and widespread corruption in public and law enforcement agencies are creating new challenges related to the current crisis of counterfeit and contraband cigarettes of Ukrainian origin. These challenges require the Ukrainian government to implement new measures to combat cigarette smuggling. In this regard, the authors of the article pay special attention to various anti-smuggling measures, including increasing excise taxes, anti-corruption programs, and cooperation with European customs and law enforcement authorities. It is noted that the initiatives of the State Border Guard Service and the State Fiscal Service of Ukraine to combat smuggling are hampered by the continuing instability and lack of resources. This poses obvious challenges in strengthening the necessary infrastructure to continue the fight against cigarette smuggling. Obviously, successful anti-smuggling programs will require additional funding, human resources and technical support from the relevant authorities, as well as greater integrity among their staff. The article indicates that until the negative socio-economic consequences of the current crisis have been overcome, the illegal flows of tobacco products from Ukraine to the EU will remain high.