New committee set up to investigate transit fraud

Date: 21/12/1995

THE New Year will see the start of a 12-month parliamentary inquiry into transit fraud, which costs the EU and national budgets billions of ecu in lost revenue every year.

The investigation will be the first organised by the special committees of inquiry with the power to question national and European officials established by the Maastricht Treaty. MEPs also believe they have the right, where necessary, to call national ministers.

UK Socialist MEP John Tomlinson, one of the leading campaigners behind the initiative, said this week: “We have already met the anti-fraud Commissioner Anita Gradin and we hope to have an early working discussion with the 15 permanent representatives to inform them of what we intend to do and to ask them to pass this information back to their member states, capitals, governments and parliaments. This is the best way of networking.”

The 17-member ad hoc committee includes senior MEPs drawn from a range of permanent parliamentary committees. It aims to determine the extent of transit fraud, particularly if it involves maladministration of EU law, and to devise ways in which loopholes can be closed and defective procedures improved.

At stake is a system devised 30 years ago to allow goods to be moved from one destination to another within the Union without paying taxes and duties. With 18 million transit documents issued annually and 432 billion ecu of taxes and duties channelled through the system every year, possibilities for fraud have grown.

Many goods never reach their legitimate destination and are sold without paying taxes or duties. In other circumstances, false customs certificates are issued. Investigators complain that all too often the time-limits for presenting customs documents (20 days for goods by air and 45 days if by sea) are not respected. Not only are penalties rarely applied, but any investigations are not launched early enough.

Cigarettes are a prime target for the organised crime syndicates involved in transit fraud. Estimates suggest that between five and 20&percent; of cigarettes smoked are contraband. But lucrative pickings are also found in consignments of alcohol, textiles, frozen meat and bananas.

The scale of the problem ensured all-party support for transit fraud to be the first specific area investigated by the committee of inquiry. It has already begun to assemble its back-up staff and will use the first few weeks of 1996 to establish its working programme and methodology.