Trade with Belize first took off in October 2012, when Ukraine exported nearly $60 million worth of gasoline to the tiny Caribbean nation. In total, gasoline exports for the last quarter of 2012 reached $209 million, or nearly 93 percent of Ukraine’s exports to Belize for the year, according to the State Statistics Service.
This year’s growth has been even more impressive. In the first five months of 2013, Ukraine more than tripled last year’s total exports to Belize, including some $740 million worth of oil products.
Put differently, exports of oil products to Belize, an offshore tax haven where 40 percent live below the poverty line, reached almost $1 billion in eight months. Since Ukrainian legislation does not subject such deals to export or excise duties, experts note that re-exporting oil products to offshore countries can be an easy way to evade taxes.
The numbers are certainly astounding when compared to the situation at home. In January-May of 2013, Ukraine imported 2.04 million tons of oil products and produced another 854,800 tons of gasoline and diesel for a total of about 2.9 million tons.
Meanwhile, 3.5 million tons were consumed domestically. Another 981,309 tons of fuel were exported to Belize and the British Virgin Islands during the same period, according to the Ministry for Revenues and Duties.
It’s hard to see why Belize, population 300,000, would need so much fuel.
Since October 2012, according to an Interfax report, three obscure companies have exported oil products to Belize: Zovnitransgaz, Armada-Plus and Petrol-Forwarding. The products were shipped to Belize-based Zevidon Trading Ltd. However, Zovnitransgaz was the biggest exporter of oil products to Belize so far this year, according to sources.
Zovnitransgaz was founded in September 2011 by its sole owner and director Oleg Kolosov. The 27-year-old Kharkiv resident registered his company in a secondary school building in Simferopol, Crimea. However, he didn’t provide a contact number to the public register, making it difficult to contact him.
Numerous Kyiv Post phone calls to his home phone number went unanswered.
The
way the company was established closely resembles the structure of Gaz
Ukraina, a group of companies that was recently reformatted into VETEK
Group, controlled by the young millionaire Serhiy Kurchenko.
In
November 2012, Forbes Ukraine published a list of 55 companies that were
allegedly connected to Gaz Ukraina. Most of them were registered in
2009-2011 in Kharkiv Oblast and the Crimean capital of Simferopol.
“Their
founders are residents of Kharkiv and its oblast that have not been
engaged in entrepreneurial activity before. All of them are also both
CEOs and owners of their companies. Some companies from the list in
spring 2011 changed their registration from Kharkiv to Simferopol,”
Forbes Ukraine wrote.
VETEK didn’t answer an information request by the time Kyiv Post went to press.
Zovnitransgaz
has seen exceptional growth. As of July 1 it owned six bonded
warehouses in Kyiv, Khmelnytskyi, Luhansk, Kharkiv, Chernihiv and
Cherkasy oblasts with reservoirs for a total volume of 33,300 cubic
meters. According to the Ministry for Revenues and Duties, customs
clearance of oil products was carried out in Simferopol where the
company is registered.
The possession of bonded warehouses allows
Zovnitransgaz to conduct customs clearance under a special regime.
Gasoline that was imported to Ukraine (allegedly from Belarus) and
delivered to bonded warehouses was not taxed. It means that gasoline was
exempted from customs duties, including excise taxes.
According
to information that the Ministry for Revenues and Duties provided to
Svoboda lawmaker Yuriy Syrotyuk, during the first four months of 2013,
1.259 million tons of oil products passed clearance in warehouses
belonging to Zovnitransgaz, Armada-Plus and Petrol-Forwarding. 1.203
million tons were re-exported from Ukraine. According to Ukraine’s
legislation, companies shouldn’t pay export duties for goods and
commodities being re-exported, making shipments free of tax.
The
reason why it is profitable to export goods to Belize might be trivial,
says Roman Blazhko, senior associate with Lavrynovych & Partners.
“There
is a transfer of profits from the sale of oil products from the country
(Ukraine) with a high income tax rate of 19 percent to the country
(Belize) where there is no income tax at all. Most likely the product is
sold at reduced prices to associated companies that then resell the
product at market prices, thus accumulating a significant part of almost
completely non-taxable income,” Blazhko said.
But journalist Roman
Ivanchenko, who investigated this topic, suggests that petrol could’ve
never left Ukraine’s territory at all.
“Petrol comes to these
bonded warehouses, and then, instead of shipping it in tank trucks to a
port, it gets sent by rail to smaller stations and then just goes to gas
stations,” Ivanchenko posits.
Kyiv Post staff writer Kateryna Kapliuk can be reached at [email protected]
