A scheme involving the claim of European Union (EU) agricultural subsidies for over 900,000 tons of non-existing raw tobacco has been discovered, the European Anti-Fraud Office (OLAF) said on Wednesday.
The large-scale fraud with fictitious tobacco, which was unveiled by the Italian police with the support of OLAF, caused three million euros in damages to European taxpayers.
There are currently 80 individuals under investigation by the Italian judicial authorities in the context of this operation named "Ghost Tobacco." The illegally claimed funds are to be recovered and administrative fines of around 20 million euros have been imposed.
According to the investigation, producers, processors and transport companies alike were involved in the attempt against the EU's agricultural funds.
Two main fraud schemes were discovered. In the first one, shipments to foreign companies were feigned in order to conceal the non-existence of the raw tobacco from the Italian control bodies and to evade paying value-added tax (VAT).
In the second scheme "tobacco carousels," where fictitious tobacco was traded so as to enable fraudulent businesses to deduct input VAT whilst the supplier deliberately did not pay the due VAT, were created.
Source:Xinhua
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