Monopoly on the export of scrap metal: who profits from strategic raw materials during the war

Monopoly on the export of scrap metal: who profits from strategic raw materials during the war

You talk about grain, grain. Let’s talk a little about metal.

Specifically, about the export of non-ferrous and electronic scrap metal, which somehow completely fell out of the information field, which is completely unfair.

Firstly, it is yet another scheme in which we lose taxes and foreign currency that does not return to the country.

Secondly, non-ferrous metals, in the conditions of war, are a strategic resource that should be here and be used for manufacturing what brings us closer to victory.

So. Briefly and in simple terms for now.

The essence of the "gray" export scheme of non-ferrous scrap metal lies in two main points: undervaluation of the invoice value by 5-10 times, leading to a reduction in the export duty amount and a decrease in foreign currency inflows to Ukraine, as well as the illegal obtaining of the EURO-1 certificate, which reduces the duty rate from 15% to 2%.

At the beginning of the full-scale war, when people were in a panic adapting to new realities, many tried to support the country, while "enterprising patriots" profited from "dirty" schemes. The export of non-ferrous metal was among them.

In 2.5 months of spring 2022, about 1000 tons of copper scrap alone were exported, and the direct losses to the state, according to the most modest estimates, amounted to 34 million UAH.

And this is not to mention the millions of dollars in lost foreign currency revenues.

It’s also important to consider the negative impact of this activity on the raw materials market and the threat to the existence of manufacturing enterprises that create added value and jobs, as well as being critically important for ensuring and repairing energy infrastructure.

No one will be surprised when I say that cable products, which are needed by energy companies, are made from copper, and there is simply no raw material at the manufacturers.

However, there is enough for schematic exports, because instead of entering the domestic market, where the price of non-ferrous metals has skyrocketed, non-ferrous scrap metal systematically leaves the country.

According to my information, in the first six months of this year, 2024, nearly 600 tons of copper scrap were exported from the country with apparent violations, and the direct losses to the state from unpaid duties amount to approximately one million dollars.

Furthermore, the export-smuggling of electronic scrap occurs under the guise of slag export.
The essence of this scheme lies in exporting electronic scrap containing precious metals under the pretense of slag. Before export, boards are crushed or burned to give them the appearance of slag.

It is impossible to assess the losses from such activity, as the concentration of valuable metals in such concentrate is unknown. Additional customs checks, which simulate combating such smuggling, indirectly harm companies exporting genuine slag.

Preliminarily, at least 400 tons of such slag were exported in 2024.

This can also be viewed as a blow to the strategic industry.

At the same time, in this direction, we traditionally have not chaos, but a sort of schematic monopoly.

Market players talk about three companies engaged in similar exports: LLC "DEON INSTANT", LLC "KOZAKVOLYA", LLC "VILNYI DNIPRO". They are the ones who export scrap and slag.
In fact, these companies are part of the so-called "Ramita" group of enterprises, which offers to buy various types of scrap at prices higher than factory prices but has no production capabilities.

Behind this company is a whole list of other enterprises that have operated throughout its history.

The market is so small that everyone knows everything well. They know who actually works and who just schematizes, destroying the strategic industry.

It is not that difficult to verify this information and put things in order regarding the schematic export of strategic raw materials.

The main thing is the desire and understanding of the importance of this issue.