The problem is that production and distribution of many goods and services occurs in different states of the European Community, but the tax is only collected in the country of final sale. The tax is collected in one country but is owed and needs to be allocated to all countries in which production and distribution occurred. Those countries are entitled to a share of the tax. The share these countries deserve and receive is calculated on the basis of the paperwork which accompanies the production and distribution of goods and services. The fraud consists in falsifying or hiding the value added in the production and distribution process, thereby cheating governments out of their tax share, and in being able to make a profit by underselling legitamate goods, which are more expensive because they include in their final price the value-added tax.
Transnational crime takes many forms, only limited by the imagination of willing offenders.
Reichel is an exception in that he discusses economic, cultural heritage, and environmental crimes as well. The normal way of looking at this problem presents a fairly limited view of transnational and organized crime. The definition I will use here is straightforward. Any act which violates a legal proscription is a crime and if done as part of an organized activity is organized crime. Defined in this way, one can examine numerous other types of transnational crime than those normally focussed on.