On March 6th, Italian financial police busted a criminal enterprise composed of several Chinese businessmen, suspected of forging documents to evade customs duties. Authorities froze assets worth around 70 million euros belonging to 17 suspects. This action comes as Europe intensifies efforts to crack down on tax evasion involving Chinese imported goods.
According to reports from the Central News Agency, the operation to freeze the funds of the suspects was carried out by Italian financial police based on an investigation initiated by the Rome branch of the European Public Prosecutor’s Office (EPPO), with the case codenamed “Dragone.”
On March 6th, financial police in Rome and Florence froze assets totaling approximately 71.05 million euros (around 76.73 million US dollars) belonging to 17 suspects involved in tax evasion of Chinese imported goods, including clothing, handbags, and accessories. Among the 17 suspects, 13 were of Chinese descent and 4 were Italian.
The investigation alleged that the criminal enterprise established by Chinese businessmen created a network of 29 companies, which illegally imported Chinese goods in Florence, Prato, and Rome, evading customs duties and value-added taxes.
According to the investigation, these Chinese goods would first go through customs clearance in countries like Bulgaria, Hungary, and Greece before being sent to Italy’s transit centers. Subsequently, these goods would change hands between “fictitious operating companies,” generating many “non-existent transaction” invoices.
Reported by “Roma Today,” the main figures of this criminal group were a Chinese couple who, with the help of numerous legitimate companies and professionals, introduced Chinese manufactured goods into the Italian market, allowing them to freely circulate within other EU member states, completely circumventing value-added taxes.
The 2024 annual report issued by the European Public Prosecutor’s Office on March 3rd revealed that VAT fraud is the largest source of financial loss for the EU, accounting for 53% of all crimes. The report highlighted that VAT fraud primarily involves electronic products such as mobile phones, and has evolved into systematic organized crime.
The analysis in the report indicates that in addition to misrepresenting low-priced tariff exemptions, Chinese e-commerce importers also falsify product information to redirect goods to other EU countries, thus evading Belgian value-added taxes, but in reality, these products end up being sold on the black market.
Reported by the Belgian newspaper “De Standaard,” online platforms like “Temu” have become hotspots for tax evasion. According to the annual report by the European Public Prosecutor’s Office, this activity led to a financial loss of 611 million euros for Belgium last year. Liège Airport in Belgium serves as a primary transit hub for Chinese online purchases, with an average of 200,000 packages arriving from China daily.
The European Public Prosecutor’s Office noted that in order to avoid detection, tax evasion enterprises established by Chinese businessmen typically dissolve within 2 years, only to form new companies thereafter to escape scrutiny.