Swiss urged to help fight customs fraud

Date: 01/02/01

By Simon Taylor

The EU is refusing to deepen relations with Switzerland until Bern helps clamp down on transit fraud which costs the Union billions in lost tax revenue every year.

The European Commission, which negotiates agreements with other countries, has rejected Swiss attempts to strike deals on services liberalisation, processed agricultural products and border controls unless the country's authorities help the EU deal with companies which avoid paying customs duties on imports.

"[External Relations Commissioner Chris] Patten and [Budget Commissioner Michaele] Schreyer have said that closer judicial cooperation is a prerequisite for further steps," said one EU official. "The Swiss should not get things for free."

Bern wants a raft of new agreements to strengthen ties with the Union in addition to a deal struck last year on free movement of people, agriculture, transport and other issues.

The Swiss are particularly interested in signing up to parts of the EU's Schengen agreement, which has eliminated border controls among several member states. Bern wants access to the Schengen database of wanted persons (SIS) and the computerised fingerprint records of asylum seekers (Eurodac).

But the Commission is insisting on more cooperation in tackling Swiss-based companies which defraud the Union by importing goods into the EU without paying duties.

The anti-fraud agency OLAF estimates that these firms' activities cost the Union several billion euro each year by evading excise taxes on alcoholic drinks and mobile phones.

EU officials say the Swiss have been reluctant to take any action because there are no losses to their national finance ministries. The Commission is urging Bern to ratify a number of Council of Europe agreements on judicial cooperation as a first step in dealing with the problem.

The EU is refusing to deepen relations with Switzerland until Bern helps clamp down on transit fraud which costs the Union billions in lost tax revenue every year.