Ukraine’s Economic Security Bureau uncovers UAH 1.2 bln tax evasion scheme at 2 ferroalloy plants

Ukraine's Bureau of Economic Security (BES) has exposed two ferroalloy plants, allegedly linked to a prominent Ukrainian oligarch, for evading nearly UAH 1.2 billion in taxes during export operations.

According to a press release by the BES on Thursday, the enterprises exported ferroalloy products over an extended period to Austria, Cyprus, and several other European countries. The plants' officials deliberately undervalued the goods sold to foreign buyers, enabling large-scale tax evasion.

The state's financial losses have been confirmed by the Bureau's analysts.

As part of the ongoing criminal investigation, detectives established that these plants exported approximately 90% of their production. However, the foreign currency revenue from these sales was not returned to Ukraine. One enterprise reportedly holds an outstanding debt of UAH 1.1 billion for ferroalloy products sold to non-residents.

Between 2022 and 2023 alone, the plants exported goods worth an estimated $853 million.

Under court rulings, BES detectives are conducting searches at these enterprises to uncover and seize ferroalloy product inventories, primary financial documentation, and other materials that could serve as evidence in the criminal case.

The pretrial investigation is being carried out under Part 3 of Article 212 of the Criminal Code of Ukraine, "Tax Evasion, Duties, and Mandatory Payments." Prosecutors from the Office of the Prosecutor General are leading the proceedings.

While the press release does not identify the plants involved, Ukraine’s ferroalloy industry is dominated by two major enterprises: Zaporizhia Ferroalloy Plant (ZFP) and Nikopol Ferroalloy Plant (NFP), both of which are part of the Privat Group owned by businessman Ihor Kolomoisky.