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In the globalized economy, customs duty and import VAT fraud in international trade has become increasingly rampant. Recently, Germany and the European Public Prosecutors Office (EPPO) jointly uncovered a criminal organization involved in fraud worth up to €200 million. This incident not only reveals risks in international trade but also demonstrates the importance of cross-border law enforcement cooperation.

According to reports, this alleged fraud organization consisted of Chinese citizens who systematically undervalued and evaded customs duties and VAT. The group imported large quantities of goods from China, such as textiles, footwear, and small electronics, then used falsified invoices to declare values far below actual worth to reduce duty payments. Additionally, the organization allegedly abused Customs Procedure 42 in EU import mechanisms to evade VAT payments.

On November 7, 2023, EPPO organized a large-scale operation in Munich, conducting over 200 searches across multiple locations in Germany and the Netherlands. During this operation, tax and customs investigators raided 200+ locations, seizing €450,000+ in cash, two luxury vehicles, 80+ smartphones, 30 hard drives, and several servers. Four suspects allegedly leading this fraud scheme were arrested and remain in custody.

This operation exemplifies EPPOs cross-border cooperation, demonstrating synergy among different law enforcement agencies. Without EPPOs ability to establish connections across countries, such investigations might take longer, and international links might never be established. Key partners included Germanys Customs Investigation Office, Tax Investigation Office, Federal Police, Netherlands Fiscal Information and Investigation Service, Belgian Customs and Excise, and Belgian Federal Judicial Police.

This incident highlights not only customs and VAT fraud risks in international trade but also the critical role of international law enforcement cooperation in combating such crimes. Cross-border collaboration enables more effective prevention and prosecution of trade fraud, protecting national fiscal interests and market order.