2.2 Pre-Conflict Governance context

A Snapshot of Key Trends The Conflict in Ukraine and its Impact on Organized Crime and Security protecting criminal actors and facilitating the illicit trafficking of various goods.

Ukraine shares its eastern border with Russia, its northernborder with Belarus, and its westernborder with the European Union. The Black Sea demarcates Ukraine’s southern border. This unique geographical position makes Ukraine an advantageous location for internationally networked organized crime groups to base their operations. These groups orchestrate human trafficking, drug trafficking, smuggling of regulated goods (tobacco, firearms, and timber) and counterfeit products, cybercrime, and threat of digital infrastructure.9 In particular, over the past decade, Ukraine has emerged as an important source and transhipment point of illegal consumer products. By 2020, Ukraine displaced China as the leading supplier of illegal tobacco products to Europe.10 Most organized groups operated in Crimea, the eastern regions of Donetsk and Luhansk, and Zaporizhzhia.11 Most of these groups vary by city and region, with opaque dynamics that only become evident when a power vacuum arises from within their organization. Odesa has historically been a significant logistical and strategic centre for criminal networks because of its position as a transport hub and port on the Black Sea, which criminal organizations have used to smuggle drugs, fuel, alcohol, cigarettes, and other goods out of Ukraine. It was host to some of the most sophisticated smuggling networks in the country and the wider region, having collusive links in the city administration, central government in Kyiv, the criminal underworld, and large business structures.12

The previous armed conflict in the Donbas region was a contributing factor to the activity of organized crime in the country13. The conflict began in 2014 between the Ukrainian government and two non-state armed actors – the self-proclaimed Donetsk People’s Republic (DPR) and the Luhansk People’s Republic (LPR). DPR and LPR had effectively become ‘bandit kingdoms’ sustaining themselves mostly by smuggling and contraband.14 These smuggling networks also had a close relationship with their counterparts in Russia due to their shared business interest that emerged in the post-Soviet period. Before February 2022, Russia and Ukraine’s legal and illicit actors had few qualms about doing illegal business together. Illegal trade in various commodities across the contact line in the Luhansk and Donetsk regions was prevalent. According to various sources, the trade was led by a network of security services and government customs officials, protected by the military, facilitating or directly participating in it.15 A Transparency International study in 2019 documented various cases before February 2022 when the combatants from all sides collaborated to facilitate illegal trade while continuing to launch military campaigns against each other.16 Sometimes, military confrontation was caused by disagreements over the division of smuggling spoils.

2.2 PRE-CONFLICT GOVERNANCE CONTEXT

In 2021, Ukraine scored 32/100 on the corruption index of Transparency International and was ranked 121 out of 180 countries.17 Ukraine has suffered from corruption for many years, characterized by the informal connections between