Illegal Tobacco Factory with High-tech Equipment Discovered in Ukraine

According to the Ukrainian News Agency for Truth and Information, law enforcement officials in Lviv region, under the leadership of the prosecutor's office, have exposed an illegal tobacco factory in the Warren region. The factory had production facilities capable of producing up to 20,000 packs of cigarettes per day and was found to have stockpiled up to 20 million hryvnias (approximately 388,000 yuan). The factory was subsequently seized.

As reported on Friday by the Office of the Attorney General, a tobacco company had its production line and packaging line seized, along with over 59,000 finished products, more than 5.5 tons of tobacco, paper, filters and components following a search operation.

The seizure of smuggled tobacco, image source: collage from RBK-Ukraine

According to an investigation, the company operates in a remote village in Wolin. The factory has installed a professional production line for raw materials and expensive high-tech equipment. The surrounding area is enclosed by high fences. Additionally, modern alarm and video surveillance systems have been installed. The organization indicates that the surrounding area ensures complete confidentiality of the factory by strengthening security patrols and other measures.

The company stores and sells finished products in the Lviv and Warren regions. "Prosecutors and investigators who have long monitored the facility have developed a special action plan to enter the facility. Law enforcement officers worked professionally - the factory's security did not pose any resistance," the news said.

At present, the issue of appointing appropriate inspections and seizures of corporate property is being resolved. According to Article 199, Part 1 of the Criminal Code of Ukraine, the investigation into the manufacture and sale of tobacco products with forged consumption tax labels is still ongoing.

According to a report by the Kantar Ukraine Institute on the tobacco market, the share of illegal tobacco products in the Ukrainian market increased by 5 percentage points (p.p.) in August 2022 compared to the annual average level in 2021. It rose from 16.9% to 21.9%, making the number of illegal markets the largest during the country's independence period.

A recent study has revealed that 56% of tobacco products illegally sold for export or free trade in 2022 were produced by Vinnytsia Tobacco Factory (located in Vinnytsia) and labeled as not intended for sale in Ukraine. The proportion of products from unidentified producers was 24% (up from 23% in 2021) and United Tobacco LLC (operating a factory in Dnipro region) accounted for 19% (up from 15% in 2021).

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