In the shadow of agribusiness: How an official seized a monopoly on Ukrainian grain exports

Specialists from Hromadske analyzed a vast amount of information from the international trade database service ImportGenius and unearthed many interesting facts.

The largest grain exporters were Kernel Trade, Nibulon and Louis Dreyfus - giant holdings that traditionally dominate the Ukrainian agricultural market. The largest buyers of Ukrainian grain were Romania, Spain and China. Poland, where farmers protested so actively due to the supposed saturation of the market with cheap Ukrainian grain, took eighth place.

However, even Romania's first place turned out to be an illusion. Agricultural holdings sold grain to Romania to their subsidiaries, and where it was resold further was not visible through Ukrainian customs.

But it was clear who and where the grain was exported through the Odessa ports. For example, forty suspicious companies (probably fictitious) exported grain worth six billion hryvnia through the ports of Odessa. All grain was purchased in cash, and all these billions of hryvnia remained outside the tax limits.

How one Ukrainian official managed to seize control of almost all of Ukraine’s agricultural exports is described in detail by Hromadske’s investigation.

Unique customs regulations due to the war forced Ukraine to export grain by sea through Odessa. This has become the main way of selling Ukrainian agricultural products abroad.

For example, out of 16 million tons of wheat sold abroad from Ukraine in 2023, 13 million 700 thousand were exported by sea, that is, through Odessa. This was 85%. A similar ratio was in the case of barley, corn and other crops.

Thus, the person managing grain flows in the Odessa region controlled almost the entire grain export of Ukraine. It turned out to be the head of the Odessa Regional Military Administration Oleg Kiper.

During the time of Yanukovych, Oleg Kiper served as deputy head of the investigative department of the General Prosecutor's Office, and then was removed from office and deprived of the right to hold public office for 10 years. But in 2019, the famous District Administrative Court of Kyiv overturned his disqualification.

In July 2020, he was appointed to the position of prosecutor of the city of Kyiv. Journalists from the “Schemes” program found out that after the start of the big war, Oleg Kiper, while in office, spent his New Year’s holiday abroad. He left Ukraine on December 29, 2022 and returned on January 8, 2023. Kiper justified this by “family circumstances.”

Shortly before his appointment as head of the Odessa region, Kiper got into a scandal over the Russian passport of his wife, Irina Kiper. He claimed that she got rid of Russian citizenship and received Ukrainian citizenship in July 2022. However, journalists were able to prove that the Russian passport of Oleg Kiper’s wife was valid back in February 2023.

You may ask a question: what does the head of the Regional State Administration have to do with grain exports? After all, this is not within his competence. But in fact, during the full-scale invasion of Ukraine, many previously unknown mechanisms appeared.

On August 18, 2023, the head of the Odessa Regional Military Administration Oleg Kiper and the commander of the operational-strategic group of troops “Odessa”, General Eduard Moskalev, signed a joint order “On some issues of financial discipline in conditions of martial law.” As usual, this was explained by the need to ensure transparency and fight corruption.

But what is the essence of this order No. 19? It recommended that entrepreneurs: “submit RR type customs declarations to Odessa customs 10 calendar days before the actual loading of the cargo. At the time of filing the PP type declaration, all customs invoices for the goods to be loaded must be registered.”

If you're having trouble understanding this, here's an explanation.

A customs declaration with the letter code “PP” is a periodic declaration. If you have a large overseas contract and need to send several shipments of goods in a certain period, you should file such a declaration for that period.

This means: this is the amount of goods ordered in this contract that I plan to send from Ukraine during this time. It is under this declaration that the goods will be exported, and after this you will need to report in detail on each transaction and pay taxes on the profits received.

However, the law never specified that the declaration must be submitted 10 days before loading. In fact, Oleg Kiper introduced the customs rules he introduced on the territory of the Odessa region, which differed from the rest of Ukraine.

In response to this, several Ukrainian associations of grain traders made a general demand to cancel this order. Among them were the Ukrainian Grain Association and the Ukrainian Agricultural Business Club. They motivated their demand by the fact that the order is not a regulatory legal act and is not part of either customs or tax legislation.

The start of a large-scale invasion led to a sharp increase in the export of black grain. The main reason for this phenomenon is that since the beginning of the invasion, VAT refunds have ceased, and the difference in exchange rates was as much as 20%. Legal exporters suffered, losing 35% when compared to black counterparties who bought grain in cash and did not pay VAT.

The fight against shadow exports was necessary, given the heyday of this practice in the summer-autumn of 2022. However, the introduced order turned out to be ineffective in practice, as many companies found ways to circumvent the new rules.

After the introduction of the order, the number of companies exporting grain increased significantly. Suspicious companies were identified that had no previous export experience and no signs of real activity. Many of them turned out to be fictitious, which became the reason for further investigations and criminal cases.

Thus, attempts to combat the illegal export of black grain have led to the discovery of many shell companies and fictitious structures involved in dubious transactions. Continued export control efforts are needed to ensure fair and legal practices in the grain market.

According to information received from Odessa customs, a number of suspicious companies exported 800 thousand tons of grain worth more than $150 million from Ukraine through the Odessa region. Some of these companies are believed to be linked to Oleg Kiper, head of the Odessa OBA, which could mean he controls 85% of the country's agricultural exports. A request for comment to Oleg Kiper remained unanswered.

The Center for Public Investigations claims that the National Agency for the Prevention of Corruption has classified Keeper's declarations over the past few years. The Ministry of Justice confirms that Oleg Kiper’s property is not hidden and includes an apartment in Kyiv, a holiday home in the Kyiv region and an agricultural plot. His wife, Irina Kiper, also has significant property, including properties in Kyiv that are rented.

Despite the war, Irina Kiper continues to develop her elite recreation center in Bukovel. It is important to mention that her partner in this project is Vasily Kavlak, who is building the largest apart-hotel in Ukraine with 800 rooms.

Keeper's family business received support during the war, which occurred in parallel with the withdrawal of a significant volume of products from the country by shell companies. Whether one should believe in the randomness of these events and what position law enforcement agencies will take is a question that requires attention.