Piraeus, Greece (PortSEurope) January 24, 2019 – Greece will be fined more than €200 million ($226.76 million) by the European Union’s Anti-Fraud Office (OLAF) for its failure to stop a massive tax fraud by Chinese criminals importing extremely cheap footwear and clothing items through the country’s largest port of Piraeus. Piraeus Port Authority SA (PPA) is majority owned and operated by China’s state owned COSCO Shipping Ports Limited since 2016.
The Italian Central Anti-fraud Office’s special investigative unit, together with OLAF, has been investigating since April 2018 the import of Chinese goods without import duties and VAT, that is claimed to cost Italy alone tens of millions of euro in unpaid taxes. Greece’s Financial Crime Unit was not aware of the investigation at the time.
Many of the imported Chinese goods are counterfeit. The value of the imports is heavily understated. The importing companies are often with false identity. Investigation covers the period from January 1, 2015 to May 31, 2018. The EU is losing billions of euro in unpaid import duties and VAT for Chinese imports.
In June, OLAF visited Greece for a second time in 2018 regarding the issue of Chinese imports at Piraeus port investigating deliberate price depreciation of Chinese products that has resulted in lower tariffs.
The tax evasion is carried out through the customs regime 42, which allows the importer, usually Chinese, to pay the duty at the entry gate of the European Union (EU) putting products into free circulation throughout the EU. The second issue concerns underpriced counterfeit products imported from China.
OLAF suspects that Greece and Hungary may have become the main EU centres of a multi-million-euro scam involving imports of Chinese clothing and footwear that uses the infrastructure of China’s new Silk Road project (part of the Belt and Road initiative also known as One Belt, One Road, or OBOR).
The large-scale fraud was uncovered first in the United Kingdom, where has been ongoing for years, prompting the European Commission (EC) ask London to pay €2.7 billion ($3.06 billion) in lost customs duties to the EU budget.
There was a massive increase in undervalued clothing and footwear imports from China in the past several years, according to data from Greek and Hungarian customs coinciding with a drop in undervalued Chinese imports in Britain. A fast train line is planned to connect Piraeus and Hungarian capital Budapest.
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