Chinese customs fraud ring dismantled at Belgian airport

Four suspects were arrested in a customs fraud ring involving Chinese exporters at Liege Airport, in eastern Belgium, the European Public Prosecutor's Office said Tuesday. The investigation, code-named "Silk Road," carried out 10 searches targeting Chinese exporters suspected of having put in place a system to evade value-added tax (VAT) payments on imported goods worth E303m in estimated damages. EPPO said in a statement it suspected the Chinese exporters of using three Belgian private customs agencies and fake companies in other member states in order to benefit from a VAT import exemption. It said the Belgian companies, acting as representatives of the Chinese exporters, declared that the goods entering through Liege – electronic equipment, toys and a myriad of accessories – were destined for other European Union member states, in order to benefit from VAT import exemptions. Under EU regulations, importers are exempt from paying VAT in the country of import if the goods are then transported to another EU state. EPPO said the Chinese exporters used private customs agencies in Belgium, who would declare the final destination of the goods was shell companies in other member states. Those shell companies would never receive the goods, which were then supplied to real companies or sold to consumers via online marketplaces. Consumers would pay full price for the products, including VAT, which was never declared or paid to tax authorities.<br/>