Unpaid customs duties to be collected

By David Cronin

Date: 20/01/05

The European Commission has warned member states that it will hold them liable if they fail to recover more than €95 million of unpaid customs duties, a decade after many of the fraud cases first came to light.

The warning is contained in a Commission document which analyses 17 customs cases - involving a total fraud of almost €162m against the EU's budget. Eight of the cases emerged ten years ago or more.

In a letter sent to EU governments, the Commission warns that it "will hold member states financially liable when they show a lack of diligence in recovering customs debts".

Spain is the subject of the most serious allegations made in the report of failing to claw back unpaid customs.

In the early 1990s, the Commission says, it discovered how a front organisation for "fraudulent companies based in tax havens shipped several consignments of sugar declared for export from Antwerp but diverted the goods to Spain". The organisation received export subsidies it had claimed, even though it did not pay the required duties to the Spanish authorities.

Under EU law, Spain is obliged to recover €4.7m in this case, but has so far taken back just €2.3m of that, the Commission calculates. To date, it has submitted four requests to write off debts relating to this file. Three have been turned down and, though the EU executive has still not formally decided on the fourth, this paper says the request will be refused "because Spain had not been diligent in protecting the financial interests of the [European] Community".

A spokesman for Spain's EU embassy last night (19 January) said he was unable to respond to these allegations.

Among the other cases highlighted are:

• Almost €8.5 million in customs debts relating to a fraudulent bicycle trade between Vietnam and Belgium, France, Germany, Britain and Ireland remains to be recovered. In 1995 it was discovered that large consignments of supposedly Vietnamese bikes imported to the Union as part of a preferential market access scheme were made entirely with components from Hong Kong and China;
• €1.5 million in customs debts arising from suspicions involving imports of Costa Rican tuna has still not been recovered. The suspicions of irregularity surfaced in the 1990s, when a "great contrast" was discovered between the limited capabilities of that country's fishing fleet and the amount of Costa Rican tuna being imported into Europe, and;
• a similar sum still has to be recovered in a case regarding the abuse of certificates of origin for Cambodian textiles imported to the EU. A probe in 1996 revealed that certificates had been issued falsely as many of the textiles had been loaded in Vietnamese and Chinese harbours.

The Commission has estimated that the recovery rate in cases of customs fraud is nevertheless improving. Latest data indicates that 15% of unpaid customs debts have been clawed back, compared to 12% in 1998 and 2% in 1994.

The European Commission warned Member States that it would hold them liable if they failed to recover more than €95 million of unpaid customs duties, a decade after many of the fraud cases first had come to light. The warning was contained in a Commission document which analysed 17 customs cases - involving a total fraud of almost €162m against the EU's budget. Eight of the cases had emerged ten years earlier or more.