Investigation into a European fraud of 107 million euros in 11 countries

The European Public Prosecutor’s Office opened its doors in Kirchberg in June

Photo credit: Guy Wolff

The European Union’s anti-fraud agency is set to open a criminal investigation into an alleged EU-wide € 107 million fraud scheme involving goods imported from China.

The European Public Prosecutor’s Office, which moved to Luxembourg in June, will open the investigation after the bloc’s anti-fraud office (OLAF) discovered a potential fraud of 14 million euros in under-customs duties. paid and around € 93 million in VAT escapes, OLAF said in a statement on Wednesday.

The investigation covers 2,000 goods, in particular textiles and footwear, which entered the EU via various countries and were eventually traced back to Slovakia.

“In Slovakia, their customs value has been under-declared, causing an initial presumed loss to the EU budget of 14 million euros,” the statement said.

Three companies operating from the UK first made arrangements for imports to be routed to the EU, he added.

While the goods were initially declared to be destined for the UK, they were then re-routed to other countries in the EU. Transport records showed that the goods disappeared from the radar of official customs controls and were likely sold on the black market.

The alleged fraudsters “left EU taxpayers with a bill of up to 107 million euros,” OLAF Director General Ville Itälä said in the statement. “Selling products on the black market – often at bargain prices – distorts the single market and hurts legitimate businesses. ”

OLAF has now handed responsibility for the case to the European Public Prosecutor’s Office, which is investigating breaches against the EU budget, and will investigate with the 11 EU countries concerned. OLAF did not immediately respond to a request for The Luxembourg Times requesting confirmation from the 11 countries concerned.

Wednesday’s announcement comes less than a week after the anti-fraud agency said it seized € 900,000 in assets after six Italian entrepreneurs spent EU funds on catamarans and sailboats.

The funding was allocated to attract tourists to the region of Calabria in southern Italy, but the boats were never used in the area and instead were moved to Sicily to make more profit, said EPPO last week.

In another case, four people suspected of organizing an alleged VAT carousel, in which Germany allegedly lost at least € 23 million in tax revenue, were arrested in the Czech Republic, Romania and Slovakia, said EPPO.

Since it opened in Luxembourg’s Kirchberg region in June, the European Public Prosecutor’s Office has received more than 2,000 reports of breaches against the EU budget, representing an estimated loss of nearly 4.6 billion euros, a Kövesi told MPs at a meeting in October.

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