Ukraine’s baby factories rake in record profits amid chaos of war

Ihor Pechonoha of the Swiss-based BioTexCom says the business model that enabled him to build one of the most profitable surrogacy companies in the world is simple exploitation: “We are looking for women in the former Soviet republics because, logically, [the women] have to be from poorer places than our clients.”

It is no surprise then that BioTexCom’s quest for rentable wombs has led it to the seemingly endless pool of desperate young women in war-torn Ukraine. Eight years of civil conflict combined with the subsequent proxy war between NATO and Russia has plunged Ukraine into economic disaster. As Ukrainians sank into poverty, their country swiftly emerged as the international capital of the surrogacy industry. Today, Ukraine controls at least a quarter of the global market—despite being home to fewer than one percent of the world’s population. Alongside the industry’s rise, a seedy medical underworld filled with patient abuse and corruption took hold of the country.

Ukrainian President Volodymyr Zelensky and his team have actively encouraged the West to plunder their war-torn country, inking an investment partnership with the global asset management firm Blackrock, stripping workers of labor protections, and handing state owned companies over to private firms.

Yet Ukraine’s surrogacy industry has fallen under the radar, despite pumping over $1.5 billion into the country’s economy in 2018 alone. Since then, the global market for surrogate babies has more than doubled. The industry was valued at over $14 billion in 2022, and is projected to grow by around 25% annually in coming years, according to an analysis by Global Market Insights.

As nations like India and Nepal slam the door on surrogacy companies citing concerns the industry drives human trafficking, Western officials appear to be turning a blind eye to the abuse-ridden business flourishing in a deregulated, politically unstable Ukraine.

Emma Lamberton is a Master of International Development candidate at the University of Pittsburgh. Recently, she published a paper in Princeton’s Journal of Public and International Affairs detailing the risks Ukrainian women face when participating in the country’s surrogacy industry.

“The main concern of advocates on the ground in Ukraine is that legislators and even news organizations aren’t looking at this as a human rights violation,” Lamberton told The Grayzone.

“A government would never see human rights violations like child abuse as something to simply be regulated,” she explained. “They’d never say ‘you should only be able to beat your children on Wednesdays’ — that would be incredibly ridiculous. And so from the perspective of advocates on the ground in Ukraine, this is an abuse issue and therefore, it should not be regulated and instead it should be outlawed.”

Long before the February 2022 escalation of hostilities in Ukraine, the country was known as a fertile hunting ground for shady characters and agencies seeking to prey on desperate Ukrainian women.

Asian nations with weak regulatory systems and masses of impoverished citizens like India, Thailand, and Nepal also provided popular surrogacy markets. But their governments could not ignore the mounting record of human rights abuses by top industry players and ultimately closed their doors to wealthy foreigners seeking surrogates.

The restriction of these national surrogacy markets has channeled global demand to Ukraine, and kicked off a race to the bottom among child-vending firms. Now, childbirth profiteers have effectively exported the industry from impoverished nations to one in the midst of a grinding military confrontation with its neighbor.

“The war has brought to the forefront the need for unified international regulation on the topic of surrogacy, as surrogates are currently forced to choose between staying in a war zone or fleeing to neighboring countries that don’t recognize the legality of surrogacy,” Lamberton noted to The Grayzone.

“As with any humanitarian crisis, human trafficking becomes an even greater risk,” she said, “and international agreement on surrogacy and human rights violations are needed to protect the vulnerable women and children in Ukraine.”

The BioTexCom Center for Reproduction is by far the biggest player in the international surrogacy market. The owner of the “reproductive technology services” provider claimed that in 2018, the company controlled a mammoth 70% of the national surrogacy market and a full 25% of the global market.

While BioTexCom’s website boasts that the company has given “the joy of parenthood” to thousands of couples around the world, its true history and operations reveal a gut-wrenching pattern of abuse, secrecy, malpractice, and even allegations of human trafficking.

In a 2018 interview with Al Jazeera, a Ukrainian woman named Alina described the conditions that led her to entering a contractual pregnancy agreement with BioTexCom.

“It’s hard to find a well-paid job in Ukraine…I wanted to set aside money for my son’s university fees – they’re very expensive,” she said.

One Ukrainian BioTexCom surrogate mother carrying a child for an American couple similarly told El Pais that she decided to sell her womb due to financial strain. “I grew up without a home. It’s important for me to have an apartment of my own. [Surrogacy] is the only way I can do that.”

BioTexCom’s Medical Director, Ihor Pechenoha, openly admitted to the Spanish investigative magazine La Marea that his company targets women from poor areas, and that “all those who work as surrogate mothers do so out of financial hardship.”

“We are looking for women in the former Soviet republics because, logically, [the women] have to be from poorer places than our clients,” Pechenoha explained.

Ultimately, he added, “I have not met a single woman with a good economic situation who has decided to go through this process out of kindness, because she thinks she has enough children and wants to help someone else who wants them.”

“They do it because they need that money to buy a house, for the education of their children,” Pechenoh continued, concluding: “if you have a good life in Europe, you’re not going to do it.”

A third Ukrainian woman who sold her womb to foreigners confirmed Pechenoh’s comments in an interview with The Guardian, explaining, “the only reason why I agreed to do this is just for the financial benefits.”

“Plus, since my husband left for the frontline, I need a way to support my other four children,” she added.

“Surrogate mothers, they’re a flow of incubators,” yet another one of BioTexCom’s surrogates explained in 2019. “They don’t treat you as a human being.”

A 2020 report published in Princeton’s Journal of Public & International Affairs further underscored the foreign exploitation driving Ukraine’s surrogacy boom, asserting:

“While proponents claim that women freely choose to become surrogates, vulnerable women are often manipulated through the presentation of choice. Potential surrogates are forced to choose between providing for their families through a practice that may violate their moral beliefs or forfeiting a financial opportunity to provide for their families.”

Oksana Bilozir, a Ukrainian MP pushing to ban foreigners from leasing Ukrainian wombs, told the Australian Broadcast Corporation (ABC) that “there are two categories of Ukrainian surrogates: those wanting to do it for the money and those who already have.” She insisted to ABC that surrogacy offers so much economic value to Ukraine that it may be impossible to outlaw.

Bilozir lamented that corrupt, oligarchic forces entrenched within the Ukrainian government have actively stymied her legislative battle with the surrogacy industry.

“Really it’s now a big fight with business and their lobbyists who are unfortunately present in the Parliament,” she said. “Surrogacy was written into our laws purely as a business.”

Emma Lamberton, the author of the Princeton report on Ukraine’s surrogacy industry, noted BioTexCom is actually a foreign company operating inside of Ukraine. Documents from the firm’s website suggest the company is registered in Switzerland.

Despite BioTexCom’s associations with the wealthy banking center and a bevy of promotional material flaunting its state-of-the-art facilities and luxury accommodations for surrogate mothers, multiple reports indicate its residential centers are more akin to a prison than any four star — or for that matter, low budget—hotel.

One mother explained that while under contract with BioTexCom, though the company put her up in an apartment as promised, she was forced to share it with four other pregnant surrogates. She even described having to share a bed for 32 weeks of her pregnancy.

Others who have witnessed the company’s practices from the inside say it weaponizes the surrogates’ financial desperation to essentially imprison them.

“If we weren’t home after 4 P.M., we could be fined 100 euros,” a former BioTexCom surrogate told London-based freelance journalist Madeline Rouche. On average, the monthly stipend for surrogates ranges from 200 to 350 euros. In other words, leaving the living quarters could cost a BioTexCom surrogate half of their monthly compensation.

“We were also threatened with a fine if any of us openly criticized the company, or directly communicated with the biological parents,” she said. “We were treated like cattle and mocked by the doctors.”

The financial compensation, she said, was not nearly enough to make her decision worthwhile: “I would never be a surrogate mother again. It was a terrible experience.”

After birth, many infants are kept under lock and key in hotels with militarized security until their purchasers arrive to collect them. The Guardian described the dystopian process in 2020:

“These newborns are not in the nursery of a maternity hospital, they are lined up side by side in two large reception rooms of the improbably named Hotel Venice on the outskirts of Kyiv, protected by outer walls and barbed wire.”

Meanwhile, top Ukrainian officials allege the abusive industry has found powerful guardians in Washington.

Former Ukrainian state prosecutor, Yuriy Latsenko, oversaw a series of criminal investigations into BioTexCom for fraud and human trafficking. In 2018, ordered the company’s founder, a German citizen named Albert Tochilovsky, to be placed under house arrest for two months.

Yet Latsenko was promptly removed from his post. In the aftermath of his firing, Lutsenko told The Hill that US ambassador to Kiev, Maria Yovanovitch, once handed him an “untouchables list”—a docket of powerful people whom Washington forbade him from investigating or prosecuting. Though the exact names that appeared on the list remain unknown, Latsenko later told The Guardian that he “believes the investigations into BioTexCom have stalled as a result” of his dismissal.

While Ukraine’s former top prosecutor all but accused the US of protecting BioTexCom’s founder, top Western outlets produced glowing, public relations-like coverage of the company, papering over the abuse and exploitation lurking behind its maternity ward curtains.

In October 2022, The New York Times published an article that could have been drawn directly from BioTexCom marketing material. The Times framed the resumption of BioTexCom’s surrogacy operations in the midst of war-torn Ukraine as a valiant act of patriotic defiance, describing the baby business as “an industry that many childless people rely on.”

Instead of questioning BioTexCom’s medical director on the business model that relies on the financial coercion of poor women or reports of mistreatment, the Times tossed Pechenoha easy questions about surrogacy.

“The war has not diminished the appeal of surrogacy for couples desperate to have children,” Pechenoha explained, because the company’s clients “are in a hurry.”

“We managed to bring all our surrogate mothers out from under occupation and shelling,” he added.

As the Ukraine proxy war began, the lucrative business of supplying foreign women with babies at the expense of poor Ukrainian women adopted a militarized posture.

According to The Atlantic, the company even secured a bomb shelter to ensure that newborn production can continue unimpeded in the event of an attack. A video published by BioTexCom in early 2022 showed a typical shelter equipped not only with beds and sleeping bags, but cribs and gas masks as well.

A primetime promotional-style ABC News package on the company celebrated its Russian bomb-proof baby factories, declaring: “Ukrainian Surrogacy Agency Does Whatever it Takes to Keep Patients Safe.”

The report opened with ABC’s David Muir commending Ukraine’s “largest surrogacy agency” for “taking all measures possible to make sure their patients and their babies are safe.”

The segment went featured a softball interview in which BioTexCom’s medical director insisted—without a scintilla of pushback—that the company’s medical standards were “so high.” Muir then commended him for being “courageous and brave” and working for such a “wonderful” company.

BioTexCom clearly treats some of humanity’s most daunting challenges as business opportunities, from war to the supposedly looming threat of depopulation.

From war to the looming threat of depopulation, BioTextCom views humanity’s most daunting challenges as business opportunities. In a note accompanying an article promoted by the company, BioTexCom highlighted declining birth rates in developing countries to argue that their “artificial insemination technology” is a “chance for survival for humankind.”

“In 50 years the population of most countries of the world will be reduced by half,” the piece declared.

Tochilovsky, the German owner of BioTexCom, has argued that as long as his company remains at the forefront of the wider biotech industry, it promises to deliver a future in reproductive biotechnology where babies are generated in artificial wombs and genes are edited with computers.

In an interview with Ukrainian newspaper Delo, Tochilovsky discussed the digital economy in the context of the “reproductive technology industry.”

Referencing climbing infertility rates and theories of “population collapse” presented by the tech billionaire Elon Musk and Chinese businessman Jack Ma, Tochilovsky that biotechnology will save the human race.

“Reproductive medicine is the future of humanity,” he said.

“The most important thing is ectogenesis, the ability to raise a child outside the human body… an artificial uterus. Something like factories that we all saw in the movie The Matrix. I think within five to seven years we will get ectogenesis.” Tochilovsky added that BioTexCom is “working in this direction.”

When asked how BioTexCom plans to resolve the multitude of legal and ethical issues surrounding his futuristic baby factories, the CEO offered a disconcerting solution.

“The most important thing,” Tochilovsky insisted, “is to prohibit law enforcement agencies from interfering in the work.”

biotechBioTexComBlackRockMarie YovanovichsurrogacyUkraineUkraine proxy warVolodymyr ZelenskyYuri Lutsenko

Jeremy Loffredo is an independent journalist based in New York City.