Investigation into €107m EU fraud which spanned 11 countries
The European Union’s fraud-fighting agency is expected to open a criminal investigation into a suspected €107 million EU-wide fraud scheme involving goods imported from China.
The European Public Prosecutor’s Office (EPPO), which set up shop in Luxembourg in June, will open the investigation after the bloc’s anti-fraud office (OLAF) found a potential €14 million fraud in underpaid customs duties and an estimated €93 million in evaded VAT, OLAF said in a statement on Wednesday.
The investigation centres on 2,000 goods, in particular textiles and shoes, which were brought into the EU through various countries and were ultimately traced back to Slovakia.
“In Slovakia, their customs value was under-declared causing a suspected initial loss to the EU budget of €14 million,” the statement said.
Three companies operating from the UK first arranged for the imports to be brought to the EU, it added.
While the goods had originally been declared as being destined for the UK, they were later rerouted to other countries across the EU. Transport records showed the goods disappeared from the radar of official customs controls and were likely sold on the black market.
Suspected fraudsters “left EU taxpayers with a bill of up to €107 million,” OLAF Director-General Ville Itälä said in the statement. “Selling products on the black market – often at rock bottom prices – distorts the single market and harms legitimate businesses.”
OLAF has now handed over responsibility for the case to EPPO, which investigates crimes against the EU budget, and which will carry out an investigation with all 11 EU countries involved. OLAF did not immediately respond to a request from The Luxembourg Times asking for confirmation of which 11 countries were involved.
The announcement on Wednesday comes less than a week after the fraud-fighting agency said it had seized €900,000 worth of assets after six entrepreneurs in Italy spent EU funding on catamarans and sailing boats.
The funding was allocated to attract tourists to Calabria region in southern Italy but the boats were never used in the area and were instead moved to Sicily to make more profits, EPPO said last week.
In a separate case, four people suspected of organising a so-call VAT carousel, in which Germany is estimated to have lost at least €23 million in tax revenue, were arrested in the Czech Republic, Romania and Slovakia, EPPO said.
Since opening in the Kirchberg area of Luxembourg in June, EPPO has received more than 2,000 reports of crime against the bloc’s budget, representing an estimated loss of almost €4.6 billion, Kövesi told MEPs at a meeting in October.