SMUGGLING OF EXCISABLE GOODS AS A THREAT TO THE FINANCIAL SECURITY OF UKRAINE

Abstract

The smuggling of excisable goods — tobacco products, alcoholic beverages, and fuels — constitutes one of the most persistent threats to the financial security of Ukraine. Under wartime conditions, illicit cross-border movements of excisable goods have intensified, causing systematic losses of excise duty, customs duties, and value-added tax revenues. The purpose of this article is to provide a scientific analysis of the theoretical foundations of combating the smuggling of excisable goods as a threat to Ukraine’s financial security, and to develop practical recommendations for strengthening countermeasures. The study employs a system-analytical approach, statistical and comparative methods, morphological decomposition for classifying smuggling schemes, content analysis of the regulatory framework, and synthesis for formulating conclusions. The article examines the legal definition of smuggling under Article 201 of the Criminal Code of Ukraine and analyses its economic nature as a form of fiscal evasion. Modern approaches to customs policy are systematised, demonstrating its evolution from a predominantly fiscal instrument towards a risk-oriented financial security mechanism. Drawing on monitoring data published by Kantar Ukraine and the State Customs Service of Ukraine, the scale of the illicit tobacco market is assessed: in 2025, budget losses from illegal cigarette trade reached approximately UAH 26.5 billion, with the shadow market share exceeding 20 percent of total consumption. A cause-and-effect model linking smuggling to budgetary losses is constructed and presented in tabular form. The article substantiates the necessity of transitioning from reactive customs control to a proactive financial security management model. A comprehensive set of countermeasures is proposed, including expansion of risk-oriented customs profiling, digitalisation of customs administration, integration of information systems across tax and law enforcement bodies, and introduction of electronic tracking of excisable goods. The practical value of the research lies in the applicability of its recommendations for the State Customs Service of Ukraine and the Ministry of Finance in designing policies to reduce fiscal risks and enhance state financial resilience.