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EUROMOVERS International

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Europe cracks down on smuggling

Mar 18, 2014
Almost 45 million smuggled cigarettes, nearly 140,000 litres of diesel fuel and 14,000 litres of vodka were seized during a major Joint Customs Operation (JCO).

The recent operation code-named ‘Warehouse’ was carried-out by the Lithuanian Customs Service and the Lithuanian Tax Inspectorate in close cooperation with the European Anti-Fraud Office (OLAF). As a result of Operation ‘Warehouse’, preliminary estimates indicate a potential loss of € 9 million to the budgets of the European Union and its 28 Member States has been prevented.

Eight individual seizures were made during the course of the operation. Among these: 6,617,400 cigarettes in Sweden and Lithuania; 135,831 litres of diesel in Poland and the United Kingdom, and 14,025 litres of vodka in the United Kingdom alone were recovered.

“The fight against the smuggling of excise goods is one of our political priorities and we have launched a number of initiatives to better equip Europe against such harmful practices being run by organised criminal networks,” said Algirdas Šemeta, Commissioner for Taxation, Customs, Anti-Fraud and Audit. “JCO ‘Warehouse’ is a good example of how the EU and its Member States can cooperate effectively to protect its revenue. Joint Customs Operations safeguard the EU's financial interests and also protect our citizens and legitimate businesses.”

JCO ‘Warehouse’ focused on cargo movement by road transport. It targeted the smuggling and other forms of illegal trade of excise goods such as mineral oil, tobacco products and alcohol throughout Europe. By using several complex scenarios in multiple EU Member States, fraudsters lawfully import goods into the EU but also request a VAT and excise exemption by declaring the goods as subject to tax and duty exemption regimes (e.g. declaring the goods to be in transit). The trace of the goods is then lost through the fictitious disappearance of the traders or through false export. These fraudsters avoid paying VAT and excise duties, but the goods remain within the internal market, causing a substantial loss to the EU's and Member States' revenues.

JCO ‘Warehouse’ was the first operation carried-out in close cooperation with tax authorities to target excise and VAT fraud specifically, besides customs fraud. It’s the first time, customs and tax authorities cooperated on a European scale for a JCO. This is a significant achievement since the typically different competences and legal regimes applicable at national and EU level make it difficult to address complex fraud schemes with uniform measures.

During the entire JCO ‘Warehouse’, OLAF provided organisational, logistical, financial and technical support to allow for an exchange of information and intelligence in real-time. This was coordinated from the Physical Operational Coordination Unit (P-OCU) at the OLAF premises in Brussels which facilitated direct communication with the national contact points. A group of liaison officers from some Member States representing all the participating 28 EU countries, worked from here during the Operation and experts from the Commission's Directorate-General for Taxation and Customs Union provided support.  

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