MEPs attack lack of action over transit crime

Date: 16/01/1997

By Rory Watson

SWITZERLAND has been singled out for trenchant criticism in a comprehensive European Parliament investigation into transit fraud across the Union.

After a year-long inquiry into the scale of detected fraud the vast bulk of which involves a highly lucrative black market in contraband cigarettes the MEPs estimate that since 1990 the “total amount defrauded from the Community transit system runs into several billion ecu”.

An interim report of the MEPs' findings, which has been finalised this week, spreads the blame for loopholes in the antiquated transit system between EU institutions, national authorities and tobacco manufacturers, but reserves its harshest comments for the highly secretive Alpine country.

“Switzerland is an ever-present element in cigarette fraud,” notes the report. It singles out the country's free zones, which “provide an ideal environment for disguising the origins of cigarettes”, and banking secrecy legislation, which “makes financial transactions inaccessible to investigators”.

Analysing the difficulties the EU faces, the report notes: “The basic problem is that, for reasons of geography, the EU bizarrely finds itself in a customs union with a country which refuses judicial cooperation on customs offences [and] makes such offences easier to commit through its legislative and administrative systems.”

While urging the Union to use greater diplomatic pressure to ensure better cooperation from the Swiss authorities, the Parliament's inquiry committee also believes other reforms are necessary.

After hearing from Rothmans of Pall Mall that some 5&percent; of the stolen cigarettes circulating in Europe had been manufactured by the company, the committee insists that tobacco manufacturers themselves have a duty to cooperate with law enforcement agencies.

The MEPs intend to spend the coming month finalising their recommendations for improvements to the Union's transit system. Originally introduced for goods travelling between six countries, it now handles 18 million transactions involving a score of countries every year.

The 117-page interim report gives an early indication of the likely measures.

Member states, which almost without exception have reduced the number of customs officials, will be encouraged to ensure their authorities are better resourced and able to handle cross-border cooperation.

On average, each customs office in the Union processes 18,000 documents a year, although the burden is unevenly spread. Germany's central transit sorting office in Hamm, with a staff of ten, deals with almost 20,000 forms every day.

Contrasting the fragmentation of 15 national authorities with the creation of the single market, MEPs are likely to propose the eventual establishment of an EU-wide customs service.

“Failure to provide a service able to police and protect that free trade is almost wilful negligence, which has exposed Europe's traders and taxpayers to fraud on a vast scale,” notes the report.

The parliamentary committee also directs vigorous criticism at member states for failing to take a stronger stand against transit fraud and confesses it has been “shocked by the complacency of some public authorities when faced with massive losses of public revenues”.

In order to encourage some much-needed improvements, MEPs on the committee have floated the idea of reviewing the arrangement under which member states are allowed to hold on to 10&percent; of the customs duties they collect on behalf of the Union.

Among other suggestions are the establishment of a blacklist of rogue freight firms and the use of satellites to monitor lorries as they travel through the Union.