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Custom Treatment

euroterminal
An increasing share of Ukraine’s imports are cleared through the private Euroterminal, whose ownership structure is opaque.

BY DMYTRO GNAP and ANNA BABINETS

Editor’s Note:  The following is an investigation conducted by the Washington-based Organized Crime and Corruption Reporting Project, a Kyiv Post partner. The authors are Kyiv-based Ukrainian journalists working for the investigative bureau Slidstvo.info.

ODESA, Ukraine – A stretch of dried-up swamp on the outskirts of Odesa is where probably more cash is exchanged daily than just about any other location in Ukraine. The 50-hectare location is known as Euroterminal, a cargo and customs clearinghouse with a murky ownership structure that has support from Ukraine’s President Viktor Yanukovych, who helped get it started.

New corruption replaces old

{modal href="/images/stories/indepth/customsclearancecashflows.jpg"}customsclearancecashflows_small{/modal}While importers are now forced to use the private Euroterminal to clear customs, bypassing the state-owned Odesa Sea Port, they admit that the new shadowy intermediary is better and cheaper than the old system of using high-cost customs brokers.

In 2011 and earlier, customs officials demanded cash payments to clear goods or importers could use a well-connected intermediary brokerage firms, commonly referred to as “the chosen ones,” according to Odesa lawmakers and local trade unions.

Importers who tried to go through the port could wait months for customs clearance.  Brokers, who were clearly connected to port management, were expensive. Both brokers and importers claimed that implementing that scheme wouldn’t be possible without the involvement of top officials from the Customs Service, whose job was to block the cargo of those who didn’t want to pay the privileged brokerages.

Operators of cargo terminal raise questions

Pres_Showing_EuroterminalBY DMYTRO GNAP and ANNA BABINETS

While the real owners of the Euroterminal can’t be proven, the people who manage the terminal have a number of controversial connections that raise serious questions about the operation.  It is unclear why would the president of Ukraine push for the creation of the terminal only to let it be run by people with alleged ties to criminal activities.

The management is run by two brothers Pavel and Serhiy Lisitsin, Russian citizens, who serve as president and director, respectively of Euroterminal.

Pavel Lisitsin was also director of Sintez U.K. Ltd., part of the well-known Sintez group, which in the 1990s traded oil and gasoline in the former Soviet Union.

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