False declarations of origin are a classic method used by fraudsters when they try to evade European Union anti-dumping duties. Smugglers ship goods such as steel products, chemical compounds or office material from, say, China or India through another country thereby trying to conceal their real origin before entering the European Union territory. The evasion of anti-dumping duties harms the European taxpayer and has the added consequence that products which enter the EU market in this way can cause serious damage to legitimate businesses. During the past two days the European Anti-Fraud Office (OLAF) has discussed this situation with the authorities and business representatives of the United Arab Emirates (UEA) during a seminar on anti-fraud issues and the development of closer co-operation hosted by the Dubai Chamber of Commerce and Industry (DCCI).
“European Union anti-dumping duties are levied in order to protect European companies from unfair competition. Evading them harms the EU economy and EU taxpayers”, OLAF Director General Franz-Hermann Brüner said. “Reinforcing international cooperation is an essential tool in the fight against this type of fraud”, he added.
During the seminar hosted by the Dubai Chamber of Commerce and Industry (DCCI) in Dubai, OLAF discussed with representatives from the Federal Ministry of Economy and Planning, UAE Customs, the Chambers of Commerce and Industry from several Emirates and the Free Zone Authorities the issue of evasion of anti-dumping duties. This dialogue is aimed to strengthen and develop the long-standing co-operation between the UAE and OLAF and their joint fight against commercial fraud.
OLAF has a long experience with investigations in the field of this kind of fraud:
· A recent joint OLAF-UAE investigation concerned, inter alia, the fraudulent supplies of Chinese steel wire ropes via Dubai to Spain in the European Community. The European importer falsely declared the goods as UAE-product. Consequently, the importer evaded payment of the anti-dumping duties imposed by the Community on the Chinese product and, in addition, benefited from tariff preferences granted by the Community to products originating in the UAE. The evidence collected by OLAF in the joint investigation in the UAE enabled the Spanish authorities to recover several million Euros of import duties.
· Steel wire ropes had also been in the focus of OLAF investigations in the past: for example, stainless steel wire manufactured in India had been imported into the Community via intermediaries in the UAE in violation of the anti-dumping and countervailing duty regulations introduced on such products. The applicable regulations in force at the time applied anti-dumping and countervailing duty rates ranging up to 55.6% on the value of the imported goods.
By means of false declarations of origin more than 6 million euros in anti-dumping and countervailing duties was evaded. The alleged UAE producers had claimed to process the Indian raw material to an extent which conferred UAE origin. OLAF initiated and coordinated the case in close cooperation with the competent services from 12 Member States, and was given full assistance by the competent authorities in the UAE and India. More than € 4 million of the evaded duties has been recovered.
· On the basis of information provided by both economic operators and a Member State’s customs administration, OLAF opened an external enquiry concerning the importation of ring binder mechanisms into the Community under cover of preferential certificates of origin from Thailand. These were suspected to be of Chinese origin, in which case anti-dumping duties of 78.8% would have been due. An OLAF mission to Thailand confirmed initial suspicions that only a third of the mechanisms were assembled in Thailand, while the remainder was imported directly from China. In addition, the assembly process in Thailand was such that none of the product could be considered as of genuine Thai origin. The authorities in Thailand co-operated fully. The duties to be recovered total more than € 3 million.
· Another OLAF investigation concerned the fraudulent importation of persulphates into the European Union. This investigation was opened on the basis of information received from a number of Member States and industry sources. Persulphates are chemical compounds used as oxidising agents and bleaches in such varied domains as the chemical industry, food conservation, medical analysis and petroleum extraction. The investigation established that persulphates originating from China had been imported into the territory of the European Union in violation of anti-dumping regulations. The regulations applicable at the time applied an anti-dumping duty of 83.3% on the value of the imported goods. By means of false declarations of origin, more than € 5 million in anti-dumping duties was evaded. OLAF initiated and co-ordinated the case in close co-operation with the competent services from seven Member States. More than € 2.5 million of the evaded duties has been recovered.
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