The majority of cases took place along the shipping route China - Greece - Italy, with the port of Piraeus as the primary entry point and Italy as the main final destination.
The first cases detected date back to mid-last year. Following this, a significant operation was launched under the leadership of the EU anti-fraud office OLAF, in cooperation with customs authorities from eight EU countries.
Claims for VAT refunds typically involve goods entering the EU via one member state but having another EU country as the final destination. The VAT is then owed to that other EU country, but by then the trader has often gone bankrupt or disappeared.
As a further byproduct of this operation, two large consignments of counterfeit goods were also seized. These included 127,000 fake hats and clothing items, as well as 4 million packs of cigarettes.
The Greek port of Piraeus is fully owned by the Chinese transport company Cosco, which in 2016 purchased the quays and port facilities for several billion euros when Greece was on the verge of total bankruptcy during the banking crisis.
At that time, under pressure from the European Union’s financial supervisors, Greece was forced to make deep cuts and thoroughly reform its economy. Chinese Cosco acquired all port rights and invested heavily in two new container terminals, and today Piraeus is the fourth largest container port in Europe.
The damage caused by VAT fraud is estimated in Brussels at 50 billion euros. In addition, there are hundreds of millions of euros worth of damages from other fraudulent activities, such as subsidy fraud or corruption.
An earlier cross-border investigation by European prosecutors, OLAF, and national police forces uncovered, after several months, a network of hundreds of individuals and several thousand companies. Together they had committed VAT fraud totaling 2.2 billion euros. This was the largest VAT carousel ever uncovered in the EU.