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54 I Eastern Europe bne May 2017
Ukraine's Black Sea port of Odesa is often at the centre of customs fraud investigations.
From boxing clubs to the Seychelles: investigating Ukraine’s corrupt customs
Graham Stack in Berlin
The trail of one of Ukraine’s notori- ous ploshchadki – money laun- dering organisations involved in customs fraud – leads from China via Odesa to a provincial boxing club – and from there to the Seychelles Islands.
“The total turnover of this [kind of] scheme in Ukraine has been around $20bn per year,” claims former top Ukrainian banker Boris Timonkin.
The ploshchadki are large and intricate financial schemes that allow Ukrainian importers to hugely understate the customs value of their cargo by making hidden off-the-books payments to for- eign suppliers, thus generating massive international illicit financial flows.
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Timonkin served for a decade as the widely respected head of one Ukraine’s top five banks, Ukrsotsbank, a subsidiary of the Italian banking giant Unicredit. In 2013, he controversially chose to head the banking business of a shadowy young oligarch, Serhii Kurchenko, alleged to
be the money-launderer-in-chief for embezzlement in the energy sector
under Ukraine’s former president Viktor Yanukovych. Kurchenko, who has refused to return from Moscow to face criminal charges, denies any wrongdoing.
Timonkin is now in Berlin battling extra- dition to Ukraine on organised crime charges, and ready to take on the role
of whistleblower regarding the dark side of Ukraine’s financial system.
“The typical scheme is: you have a cargo from China and you declare to the cus- toms that its value is $50,000, although its real value is $350,000. Officially
you pay to the Chinese producers this $50,000, but of course in fact you have to pay the producer the full price of $350,000. This means you have to find a way to pay another $300,000 illegally to the producer – and the ploshchadki have standardised a payment system in Ukraine for these illegal payments, total- ling billions per year,” says Timonkin.
“It is a full service – you don’t have to worry about how the money gets there – they do it all themselves using fake companies and fake contracts. They move the money to their offshore com-