Smugglers foiled as OLAF tip-off bears fruit

Date: 11/07/02

By David Cronin

AN ANONYMOUS tip-off to EU anti-fraud office OLAF has led to the discovery of a banana smuggling operation that has deprived customs authorities of more than €300 million in lost revenue.

A two-year investigation found that false French and Spanish import licences were being used to bring fruit into the EU illegally. The perpetrators allegedly managed to get bananas past customs in several member states, including Spain, Belgium, Germany, Greece, Italy and Portugal.

The probe began in June 2000 after OLAF was alerted to suspicious activities - initially thought to involve drug-trafficking - in the Sicilian port of Catania. It is estimated that at least 210,000 tonnes of bananas have come in through the port in recent years. A Sicily-based company called Società Ortofrutticola Accese is being prosecuted for allegedly smuggling bananas from Ecuador.

'At the outset this inquiry was only aimed at monitoring a vessel suspected of carrying cocaine,' said Fabio Scavone, Catania's deputy public prosecutor, in a video interview for OLAF. 'The inquiry was unsuccessful because no cocaine was found on board.

'However, quite by chance it was found that the same vessel was in fact transporting bananas and attempting to evade customs.'

'We've been able to find out how a small village shopkeeper from the provinces has managed to build up a real empire from nothing and control the whole trade in bananas in the whole of central and southern Italy,' he added. 'We've also managed to understand what at first wasn't very clear, that more profit can be made from this type of fraud than from serious crimes such as importing a tonne of cocaine.'

OLAF investigator Pierpaolo Rossi has calculated that the financial impact of the fraud stands at €300-500 million. 'However, these figures only describe the amount of custom duties evaded,' he said. 'In fact, the fraud itself revolved around the use of false import licences needed to import third-country goods and release them for circulation. The licences themselves were worth somewhere in the region of three to six dollars per crate of bananas.

'Therefore, the criminal organisations that sold these false certificates made a sizeable criminal profit, which represents the real profit of the fraud.'

The European Commission's annual report on protecting the EU's financial interests - published last week - records a 140% rise in the amount of fraud cases which Italy has notified to Brussels. The detection of illicit fruit trading is cited as a reason for that increase.

An anonymous tip-off to EU anti-fraud office OLAF has led to the discovery of a banana smuggling operation that has deprived customs authorities of more than €300 million in lost revenue.