Chinese organized crime syndicates are defrauding the European Union out of billions of euros in tax and customs revenue through sophisticated networks of fake companies that exploit regulatory blind spots, according to the EU’s chief public prosecutor.
“We see a lot of Chinese mafia activity,” Laura Kovesi said in an interview with Bloomberg, describing the groups as “very agile, flexible and highly organized.” According to a recent report by the European Public Prosecutor’s Office, tax and customs fraud has cost the EU an estimated €13 billion ($14.1 billion).
The main target of these illicit networks are value-added taxes, known as VAT, which all EU member states are required to apply to goods and services consumed within the bloc. This levy, which must be at least 15%, is paid by buyers directly to businesses, which are in turn expected to remit that money to national tax authorities.