Law enforcement agencies in Ukraine have conducted a large-scale operation to dismantle the shadow economy. Two powerful underground factories for the production of tobacco products were liquidated in the Lviv and Kharkiv regions. According to experts, these illegal workshops could produce more than 130,000 packs of cigarettes daily, causing colossal damage to the state and legitimate business.

Information about the successful special operation was confirmed by the Bureau of Economic Security (BEB) and the National Police. During joint raids, production lines, raw materials, and finished products worth about 60 million hryvnias were seized.

Industrial scale of illegal business

The organizers of underground production chose industrial zones for their activities, which allowed them to hide their operations from prying eyes. Warehouse premises were substantially converted into full-fledged production complexes.

The following were found on the factory premises:

  • Industrial lines for cigarette manufacturing;
  • Significant stocks of tobacco and filters;
  • Printed materials for packaging.

The peculiarity of the schemes lay in their specialization. The workshop located in the Lviv region near Zhovkva specialized in the production of cigarettes without filters, producing up to 70,000 packs per day. The second factory, operating on the outskirts of Kharkiv, produced cigarettes with filters in volumes of up to 60,000 packs daily.

Hidden logistics and camouflage

To ensure autonomy and secrecy of work, the organizers provided for the installation of diesel generators. This allowed them to hide abnormally high volumes of electricity consumption, which could have become a signal for regulatory authorities. In addition, residential rooms were arranged in the production premises, where hired workers lived permanently, ensuring round-the-clock operation of the lines.

Finished products were sold throughout Ukraine through a complex network of sales channels. Illegal cigarettes were sold through retail stores, Telegram channels, and postal operators. To give the goods a legal appearance, excise tax stamps of unknown origin were pasted on the packs.

Counterfeit under the guise of world brands

In the photographs published by law enforcement, one can see products packaged in packs with symbols visually resembling well-known world brands, such as Marlboro and Parliament. Although most of the images are intentionally blurred, the characteristic color schemes and logos indicate an attempt to pass off counterfeits as originals.

Officially, law enforcement reports the sale of products under the brands of Ukrainian and European manufacturers, without specifying specific trademarks, in order not to advertise counterfeits.

Operation results

As a result of the searches, more than 115,000 packs of finished cigarettes and 3.5 tons of tobacco were seized. A significant part of the seized property is concentrated in the Lviv region, where its value is estimated at approximately 50 million hryvnias.

Currently, a pre-trial investigation is underway regarding the illegal manufacture, storage, and sale of excisable goods. Law enforcement agencies are working to identify all persons involved in the organization and financing of illegal production.

Recall that this is not the only major operation against shadow producers. Previously, the BEB had already conducted large-scale raids against the illegal market of electronic cigarettes and vapes, seizing equipment and documentation confirming the functioning of similar schemes in several regions of the country.