MADRID/ATHENS: European Union and Italian authorities are investigating suspected wide-scale tax fraud by Chinese criminal gangs importing goods via Greece’s largest port of Piraeus, a trade gateway between China and Europe, officials said.
“The VAT is completely evaded, with enormous damage to the national tax authorities and to the community,” Fabio Botto, of the Italian Central Anti-fraud Office’s special investigative unit, said in an interview.
He said the suspected scam at Piraeus, part of China’s vast Belt and Road infrastructure project, had cost Italy tens of millions of euros in unpaid value-added taxes (VAT), though the total could be far higher as the investigation was not over.
The European Anti-Fraud Office (OLAF) confirmed it was working with Italy on the investigation but declined to give details, citing confidentiality.
Botto said his agency had evidence that Chinese-owned firms run by the criminal groups were fraudulently avoiding import duties and VAT on large shipments of goods through Piraeus.
The groups import goods, often counterfeit clothing and footwear, and massively understate their value to EU customs to avoid import duties, he said.
They also lie about the firms that receive the goods, enabling them to avoid VAT.
Greece’s Financial Crime Unit is conducting a separate investigation into a suspected tax fraud case involving Chinese goods imported via Pireaus.
The Greek unit has had little contact with Italian and EU authorities and has not been informed about the wider investigation, an official there said.
China’s state-owned COSCO Shipping has majority-owned Piraeus since 2016. China wants to transform the port into its “gateway to Europe” under the billion Belt and Road initiative, which envisions a new “Silk Road” of land and sea routes with trading partners.
Botto and the Greek official said neither investigation had evidence of any wrongdoing by Piraeus port authorities.
COSCO owns a majority stake in the Piraeus Port Authority (PPA), which manages one container terminal, and a wholly-owned COSCO subsidiary owns and manages two other terminals.
COSCO said: “The company has in its global operations consistently and strictly followed local and international laws, and persevered to operate legally and compliantly”. PPA said it had not received any information about criminal groups using the port and it would alert authorities
if it did. — Reuters
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