As Ukraine continues to resist Russia’s full-scale invasion, the port city of Odesa presents a paradox: while under frequent aerial assault, many aspects of life appear remarkably normal. This report explores how organized crime has not only survived but thrived in one of the country’s most strategically significant cities.
Odesa’s relative stability, growing economy, and reopened ports have created an oasis for criminal economies, guided by one rule: anyone can do business, as long as they do not interfere with others. This ‘free city’ model has allowed Odesa to emerge as a hub for scam call centres, synthetic drug production and tax evasion surrounding lucrative grain exports.
The study delves into a troubling overlap between legitimate business and criminal enterprise. For instance, the booming grain trade – critical for Ukraine’s economy – is plagued by fraud, shell companies and collusion with sanctioned actors. At the heart of this is the use of cash to conduct large transactions, depriving the Ukrainian state of an estimated $3 billion between May 2022 and May 2024.
Meanwhile, Odesa’s role in conscript smuggling has grown as draft evasion surges, driving prices higher. Call centres have become one of the city’s most profitable illicit ventures, targeting victims across Europe and beyond. Some rogue actors from the city’s volunteer units have also helped facilitate the resurgence of the night-time vice economy, moving drugs and sex workers to clients during curfew.
As Ukraine looks to reconstruction, the report warns that Odesa is at risk of becoming a template for criminal capture of public funds. Billions of hryvnias in aid are earmarked for rebuilding infrastructure and cultural landmarks in the city, but without effective safeguards, these funds may fall into the hands of corrupt networks.
This report offers insights into how illicit economies evolve during conflict and why stronger responses are needed now to prevent long-term damage.
