Gray areas of the law: how income is laundered in Ukraine through gifts, rent and individual entrepreneurs
6 August 17:30
INFOGRAPHICS 
A high-profile scandal has erupted around the head of the Energy Customs , Anatoliy Komar, over his dubious excessive income. It involves elite real estate worth tens of millions of hryvnias, large cash “gifts” from retired relatives (in particular, his wife’s mother gave her UAH 2 million, and her 91-year-old grandmother gave her almost UAH 3 million), as well as a sudden financial “epiphany” in the business activities of his wife and her family. And all of this was declared officially.
The problem is that officials – people who receive their salaries from the taxes of Ukrainians – have long learned to hide their “unofficial income” from both the tax authorities and anti-corruption bodies. Komersant analyzed what schemes civil servants most often use.
Give me a million
Ukraine has long had “gray” schemes that allow officials and their families to avoid taxation and at the same time be formally clean before the law. Everyone is well aware of the fraud (because the information is submitted in declarations), but no one does anything about it.
Civil servants used to be extremely “lucky”: they regularly won large sums in the lottery. For example, in 2016, the leader of the Radical Party, Oleh Liashko, “won” almost 562 thousand UAH, and in 2018, MP Pavlo Kyshkar from the Samopomich party declared a win of 7.8 million UAH. And no questions were raised.
But with the beginning of the full-scale invasion, these schemes disappeared. They were replaced by “gifts” worth millions from poor relatives, mostly pensioners. The law allows close relatives to transfer funds tax-free and without explaining the sources of their origin.
As a result, an official receives, say, UAH 2 million as a “gift” – and everything is legal because it is declared. But no one checks where the money came from. This is one of the most common schemes of income legalization – in fact, the official gives the money to himself through his grandmother or mother. Since 2019, this has become a widespread phenomenon. Any official’s declaration is bound to contain a “gift”. For example, Komar’s wife received UAH 5 million from her 91-year-old grandmother and mother, who is definitely not a millionaire,” explains lawyer Volodymyr Sikorskyi.
Profit from renting
Another popular scheme is to rent out several properties (residential or commercial), registering the income as “personal” rather than as business activity. In addition, civil servants are prohibited from doing business.
For example, last year, most of the official annual income of Dnipro Mayor Borys Filatov – almost UAH 2 million – came from renting real estate that was in his personal use. There are many such examples. At the same time, the individual entrepreneur is not registered, no accounting is kept, no one checks the sources of funds for the purchase of real estate, and no financial monitoring is conducted.
Even the acquisition of objects abroad does not arouse any interest among anti-corruption authorities.
Relatives-businessmen with millions in turnover
Our officials have one more “unique” feature: as soon as they have money, they immediately have successful relatives-entrepreneurs.
The relative opens a sole proprietorship (usually on the simplified taxation system), chooses a convenient KVED (for example, consulting, design or advertising), declares an annual income of UAH 2-10 million and pays only 5% of the tax.
In fact, this is the official’s own income, but it is registered to a relative. Let’s take Komar. According to Skhemy, his father-in-law, Serhiy Hladkov, worked at a state-owned enterprise in Chernivtsi with a salary of several thousand hryvnias. But at the age of 63 (in 2019), he opened a company that by 2025 had earned more than UAH 16.5 million ($400 thousand). His wife, also a former state employee, became an individual entrepreneur and “earned” UAH 7.5 million. Their business is organizing exhibitions and congresses. And the NACP simply does not check the sources of income,” says Sikorsky.
Investments that are not visible
Another ideal way to legalize cash is to invest in cryptocurrencies or securities. You buy crypto or stocks through exchangers or offshore exchanges, save the assets, then sell them – and the profit is not taxed. It is simply impossible to trace.
Debt that does not need to be repaid
In many declarations, you can find records of loans allegedly taken or granted. In fact, the scheme is simple: an official or his relative draws up a loan agreement for several million hryvnias from a familiar person or company – and then does not return the money, or imitates the return. Or, on the contrary, they lend a significant amount of money that no one is looking for.
The loan is not considered income, is not taxed, and is not checked by either the tax authorities or the NAPC. It is very convenient. Any contract can be drawn up for any amount. No one checks the source of these funds. The tax authorities do not analyze the correspondence of expenses to income at all. And the Civil Code allows you to make a gift, lease or loan without specifying the source. And all these loopholes are used by officials on the advice of lawyers,” Sikorsky notes.
According to experts, the situation is easy to fix:
- cancel tax benefits for gifts between close relatives;
- to introduce financial monitoring of revenues to the accounts of individual entrepreneurs;
- oblige to declare the sources of funds under loan agreements;
- make officials who lease property work as official entrepreneurs.
NACP’s work
According to Opendatabot analysts, one third of the verified declarations of civil servants for 2024-2025 contain serious violations totaling more than UAH 5.8 billion.
Only 0.9% of declarations did not raise any questions. One in eight required corrections, which indicates either negligence or an attempt to conceal income.
In 423 cases, deliberately false information was found – this is criminal liability (Article 366-2 of the Criminal Code). The “average amount of error” is UAH 13.6 million.
In 2% of declarations, there were signs of illicit enrichment in the amount of UAH 646.2 million, and in another 3% – unconfirmed assets worth UAH 129 million.
Violations were most often found in officials declaring luxury real estate, expensive jewelry, cash or cryptocurrency.
Despite the scale of the violations, only 9% of criminal proceedings reach suspicion or trial. For example, in 2025, 258 cases of falsification of declarations were opened, but only 17 went to court.
Author: Alla Dunina
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