Business groups push for tougher illegal tobacco trade penalties
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Cigarette production at an underground tobacco factory (Photo: ESBU)
Business groups called on parliament on Aug. 18 to urgently pass legislation to improve the regulatory framework governing excisable goods to more effectively combat the shadow market.
The American Chamber of Commerce in Ukraine, the European Business Association and the Ukrainian Association of Tobacco Product Manufacturers (Ukrtyutyun) are urging the Verkhovna Rada to review and pass, in its second reading, bill No. 9364, which would strengthen liability for the illegal circulation of excisable goods.
"The document is aimed at strengthening efforts to combat the illicit market for excise goods by improving administrative and criminal liability, addressing gaps in law enforcement and creating conditions for more effective work by law enforcement agencies," the business coalition said in its appeal.
Among other things, the bill would establish a clearer distinction between administrative and criminal liability, strengthen penalties for repeat violations, and more precisely define the elements of offenses. This is intended to support more effective law enforcement and ensure the principle that punishment is inevitable.
The proposed changes are important for the business community, the groups said, because they would help ensure fair competition and a level playing field for all market participants.
As previously reported, according to estimates by Kantar Ukraine, the illegal tobacco trade stood at 19.8% as of April 2026, with annual state budget losses from unpaid taxes estimated at 33.3 billion hryvnias ($744 million).
"The associations support Draft Law No. 9364 as an important initiative to improve the effectiveness of efforts to combat the illegal trade in excise goods and call on the Verkhovna Rada of Ukraine to consider and adopt the document as soon as possible," the appeal states.
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