Expert estimates smuggling in Ukraine at US$12 bln annually

Expert in Programs for International and Domestic Policy of the Ukrainian Institute for the Future (UIF) Igar Tyshkevich has said the volume of smuggling in Ukraine is estimated at about US$12 billion annually.

"According to our estimates, the total volume of export and import smuggling in Ukraine is about US$12 billion annually. This is the minimum figure we've got, and not only with neighboring countries...," he said at a press event at UNIAN, presenting a report titled "Smuggling of border areas: economic, social and political aspects."

"It is necessary to fight against smuggling, but do it so that it becomes legal trade, and the fight against it does not stop the economic activity of entire regions," Tyshkevich said.

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According to the expert, the scale of the smuggling problem is especially obvious in the Ukrainian border areas. There are 15 such zones in the country, each differing in the structure of the economy, employment, and infrastructure development.

"In some regions, smuggling is the only means of earning, except for the budget sphere. Cross-border trade provides resources to [such] regions," he said.

"Repressive measures cannot solve the problem, which has become part of the local economy, social relations and even politics. By introducing increased responsibility, the state should think about compensators. At least about creating new jobs," the expert said.

Speaking about specific measures to improve the smuggling situation in the country in general, Tyshkevich suggested trying to legalize at least part of the shadow flows and get an additional source of budget replenishment.

As UNIAN reported earlier, the volume of potential smuggling with neighboring countries reached US$7.067 billion in Ukraine in 2018, which was up 35.9% against 2017.

The volume of smuggling through the customs is estimated at UAH 50-60 billion (US$1.9-2.2 billion) per year.