EU authorities uncover China textiles import fraud

BRUSSELS: The European Anti-Fraud Office (OLAF) said Monday that, in conjunction with Austrian authorities, it has uncovered a major fraud scheme involving imports of textiles and shoes from China.
“Following close cooperation between the Austrian finance ministry, the customs investigation services in Vienna and Wiener-Neustadt and OLAF, the cover was blown off a band of Chinese, Hungarian and Austrian citizens who have smuggled large quantities of textiles and shoes from the PR of China into the EU by means of heavily undervalued and false invoices,” it said in a statement.
The products involved were jeans, t-shirts and other clothes as well as various kinds of footwear including sports and casual shoes.
The financial impact from last customs duties and VAT in “cannot be accurately established yet as the investigations are ongoing, but will run to millions of euros,” OLAF said.
The clandestine imports also circumvented the EU’s Chinese textiles quotas.
The investigation revealed that small customs clearance agents were used to do the customs clearance on behalf of Asian citizens.
“The goods were subsequently cleared in the (EU) member state of arrival without paying the VAT and were then transported into another member state of destination,” the Commission said.
“In this scheme the majority of consignees are either non-existent or disappear from the scene after a short period in operation.”
According to OLAF, this type of fraud is not limited to Austria and “appears to be a Europe-wide phenomenon”.
Several other Investigations in different Member States are ongoing.
The statement estimated the overall quantity of textiles and footwear involved in this type of fraud until now at around 600,000 tons.
“The overall financial impact for the budget of the European Community would be more than 200 million Euros in customs duties alone,” according to the EU’s executive arm.
Limits on imports of textiles from China to the EU were introduced in 2005. Leather shoes from China are subject to anti-dumping duties since March 2006.
Earlier this month the European Commission and China agreed to scrap the current quota restrictions on Chinese textiles next year in favour of a monitoring system. afp