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Prison term for large scale textile smuggling from China

27
Nov '09
A two-and-a-half year prison term and fines totalling almost 50 million Euros is the punishment imposed on an individual responsible for large scale fraud involving textiles imported from China. The scheme, now punished by a court in Vienna, Austria, concerned the evasion of several million Euros in customs duties and VAT. The European Anti-Fraud Office (OLAF) uncovered the illegal activities in co-operation with the Austrian customs and partner services from several other EU-Member States.

The Director-General of the European Anti-Fraud Office (OLAF), Franz-Hermann Brüner, said: “The ruling of the Austrian court shows that close co-operation between OLAF and customs investigators in the Member States leads to concrete results. Together, we are able to protect the European taxpayers from considerable damage caused by fraudsters who are trying to flood EU markets with their products without paying the necessary duties”.

The ruling by the Criminal Court (Landgericht) in Vienna of 27 October 2009 was based on a case brought by the public prosecutor's office in Vienna that followed investigations by OLAF and the Austrian customs investigations services. These investigations were part of wide-ranging enquiries during which OLAF co-ordinated the work of customs investigation services from several EU-Member States. EUROJUST and EUROPOL also contributed to the success of the operation.

The fraud scheme involved the importation of textiles from China, firstly, by understating the value of the products in order to evade customs duties, and, secondly, the fraudsters also illegally evaded the payment of VAT; mainly small customs clearance agents were used to do the customs clearance. The goods were subsequently cleared in the Member State of arrival without paying the VAT and were then transported into another Member State of destination, where the VAT would have had to be paid by the consignees. However, in this scheme the majority of consignees were either non-existent or disappeared from the scene after a short period in operation. Customs investigators also discovered a printing workshop where invoices were systematically forged.

European Commission


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