Report from the Commission - Report on the follow-up of traditional own resources in cases of fraud and irregularities
Date: 2005-01-07
Institutions: European Commission
Subjects: Member States' contribution, financial control, financial regulation, financing of the EU budget, own resources, report

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 4.2.2005 
COM(2004) 850 final/2 

CORRIGENDUM 
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REPORT FROM THE COMMISSION 

Report on the follow-up of traditional own resources in cases of fraud and irregularities 

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TABLE OF CONTENTS 

REPORT FROM THE COMMISSION Report on the follow-up of traditional own resources 
in cases of fraud and irregularities ............................................................................................. 1 

1. 

2. 

3. 

4. 

5. 

INTRODUCTION........................................................................................................ 3 

BACKGROUND.......................................................................................................... 3 

FINDINGS ................................................................................................................... 3 

FUTURE DEVELOPMENTS ..................................................................................... 4 

RELATED ISSUES ..................................................................................................... 5 

ANNEX 1................................................................................................................................... 6 

ANNEX 2................................................................................................................................. 14 

ANNEX 3................................................................................................................................. 23 

ANNEX 4................................................................................................................................. 33 

ANNEX 5................................................................................................................................. 34 

ANNEX 6................................................................................................................................. 35 

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1. 

INTRODUCTION 

This  report  together  with  its  annexes  presents  the  state  of  play  in  the  recovery  process  for 
unpaid customs duties (also known as Traditional Own Resources/TOR) in 17 cases of fraud 
or  irregularity.  All  these  cases  have  been  the  subject  of  previous  Mutual  assistance  (MA) 
communications which concerned several Member States and each had a potential impact on 
the Community budget of over €1 million.  

The report outlines the conclusions from the research in a very condensed form – more detail 
being included in the accompanying six annexes. The report also takes stock of the usefulness 
and  reliability  of  the  current  method  and  proposes  an  alternative  strategy  for  keeping  the 
Budgetary Authority informed. 

2. 

BACKGROUND 

Member  States  are  responsible  for  recovering  customs  debts  and  making  these  amounts 
available  to  the  Commission.  More  than  95%  of  the  debts  established  (which  usually  result 
from  the  release  for  free  circulation  of  imported  goods)  are  secured  and  subsequently  paid. 
Consequently,  these  amounts  are  entered  in  the  so  called  A-accounts.  The  picture  drawn  in 
this report, however, focuses on the management of unrecovered debts and, therefore, cannot 
be  considered  representative  of  all  Member  State  activities  in  the  field  of  recovery. 
Unrecovered debts are entered in the so called separate or B-accounts.  

These unrecovered customs debts in the main arise from customs controls carried out after the 
release  of  the  goods.  The  majority  of  the  irregularities  detected  are  the  result  of  non-
compliance with customs rules without fraudulent intent; however, cases, sometimes linked to 
previous  MA  communications,  where  fraud  is  alleged  are  found  too.  Where  customs  debts 
have been established following irregularities, they often give rise to administrative reviews, 
appeals or procedures and so remain outstanding for some time. Where fraud is involved the 
debts are nearly always established following criminal investigation and/or penal procedures 
and are difficult to recover. The observations and conclusions in this report only concern these 
types of debts and cannot therefore be extrapolated across all customs debts. 

Under Council Regulation 1150/2000 Member States are not only obliged to keep A- and B-
accounts,  but  they  are  also  required  to  inform  the  Commission  of  cases  of  fraud  or 
irregularity  (detected  or  established)  with  a  potential  financial  impact  on  the  Community's 
Budget of over €10,000. Member States transmit this information to the Commission via the 
OWNRES system.  

3. 

FINDINGS 

The underlying information in this report has been gathered from OWNRES and reflects the 
situation on 31 December 2003. The debts in the chosen sample total over €160 million. Of 
this amount almost 41% has been settled – by recovery, withdrawal or write-off – while the 
remaining 59% is still subject to administrative appeals or judicial procedures. On the basis of 
this information it can be concluded that although the outstanding amounts appear in absolute 
terms  relatively  high, that  in  relation to the overall amounts  at stake, they are  rather  low. It 

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also follows that recovery procedures are progressing. In many cases, actual recovery may be 
just a matter of time.  

Whereas the comparable reports in 1994 and 1998 showed effective recovery rates of 2% and 
12% respectively, the recovery rate for the cases discussed in this report has further improved 
to 15%. 

4. 

FUTURE DEVELOPMENTS 

For  the  reasons  highlighted  above  overall  conclusions  on  Member  States’  recovery  activity 
will  never  be  reliably  drawn  from  such  examinations  of  MA  cases.  Furthermore,  because 
Member States are responsible for recovery, it is difficult for the Commission to obtain a full 
picture of TOR recovery. Moreover, as Member States are also responsible for the contents of 
the  OWNRES  database,  the  Commission  cannot  completely  exclude  the  possibility  that 
OWNRES has not been updated or a case has not been notified. Therefore the Commission 
considers it useful to identify an alternative approach that would have the benefit of drawing a 
more complete picture. 

If Member States are unable to recover established amounts for reasons beyond their control, 
Article 17(2) of Regulation 1150/2000 provides for write-off in certain circumstances. Where 
the debt is over €10,000 Member States must report these cases to the Commission and apply 
for  the  Commission’s  approval  of  the  write-off.  Where  a  Member  State  cannot  demonstrate 
that the failure to recover is not attributable to it, the Commission will hold the Member State 
responsible  for  the  loss  of  TOR  and  require  it  to  compensate  the  loss.  Therefore,  cases  of 
write-off have the potential to provide the best picture of Member States’ recovery activity. 

In  the  past  a  full  picture  did  not  emerge.  This  was  because  some  Member  States  are  not 
prepared  to  declare  amounts  irrecoverable  ‘in  the  long  term’  and  so  not  all  Member  States 
have communicated cases of non recovery. Thus these old debts remain outstanding in the B-
accounts. 

However,  under  a  modification  to  the  Regulation  agreed  on  16  November  2004  by  the 
Council1, Member States are required to notify the Commission of all unrecovered amounts 
over €50,000, at the latest five years after the moment that debt (following assessment, review 
or  appeal)  was  confirmed  as  irrevocable.  All  Member  States  have  then  to  report  such  cases 
providing the Commission with a better view of the overall recovery performance of Member 
States.  

This new approach has the benefit of giving a more transparent image of the TOR recovery 
process in Member States. Also the Commission is in a position to use the framework of the 
triennial  report  on  the  functioning  of  the  inspection  arrangements  for  traditional  own 
resources (required under Article 18(5) of Regulation 1150/2000) to integrate the conclusions 
drawn  from  the  write-off  process  in  the  broader  context  of  TOR  controls.  It  is  therefore 
possible to dispense with reports like this B Sample report. Of course, trends in recovery in 
cases  of  fraud  and  irregularities  reported  will  continue  to  be  integrated  into  OLAF's  annual 
Report  on  the  protection  of  the  financial  interests  of  the  Community  and  the  fight  against 
fraud.  

1 

Reg. 2028/2004, Council Regulation of 16.11.04, OJ L 352 of 27.11.04. 

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5. 

RELATED ISSUES 

Checking the follow-up of recovery by means of the write-off procedure is of course not the 
only  action  the  Commission  undertakes  in  this  field.  The  Commission  also  performs  an 
annual  program  of  compliance  audits  to  ensure  that  Member  States  respect  Community 
provisions  in  the  customs  domain  and  their  obligations to recover TOR. Needing a  credible 
follow-up  of  these  audits,  the  Commission  has  developed  the  principle  of  financial 
responsibility for certain errors made by national administrations. This principle is supported 
by the Treaty and the Own Resources Decision. 

Financial  responsibility  concerns  the  Member  States’  accountability  for  the  recovery 
measures they take. Member States are responsible for collecting TOR under the best possible 
conditions. It requires Member States to cover losses of TOR resulting from their own errors. 
This strategy provides an incentive to Member States to make fewer errors in TOR recovery 
management and, of course, to obtain better recovery results. Thereby the Commission aims 
to encourage good and efficient management of Community Own resources leading to a fair 
distribution of the financial burden between Member States (and tax-payers) and ensuring a 
coherent, fair and correct application of Community legislation and general principles. 

Moreover, the Commission monitors Member State recovery in specific cases; the so-called 
cases outside the sample (cas déhors échantillons), where general principles may be at stake. 
Such cases may be flagged by Member State inspections, the European Court of Auditors, the 
Budgetary  Authority  or  –  in  cases  where  fraud  is  concerned  –  OLAF.  These  cases  are  then 
followed-up by the Commission outside the sample framework. 

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1. 

RESEARCH METHODOLOGY 

ANNEX 1 

Although  most  customs  debts  are  paid  straight  away,  problems  can  occur  where  customs 
debts  arise  from  fraud  or  irregularities.  Such  cases can  have very different  triggers, perhaps 
tariff,  value  or  origin  questions.  Therefore  control  mechanisms,  levying  and  collection 
arrangements  in  these  cases  are  necessary  to  safeguard  the  recovery  of  Traditional  Own 
Resources (TOR) and to protect the financial interests of the Community. 

This is why the Commission pays close attention to Member State controls and to the contents 
of  the  so  called  separate  accounts  (these  accounts,  kept  at  national  level,  contain  unpaid 
customs  debts  which  are  either  not  guaranteed  or  have  been  contested  -  even  though 
guaranteed.  The  Commission  regularly  checks  these  procedures  and  accounts  during  their 
inspections of Member States2. To provide further assurance that customs debts have indeed 
been properly managed by Member States the Commission developed an audit procedure, the 
results of which are separately reported.  

The  report  on  this  audit  procedure,  known  as  the  'Sample  B'  report,  consists  of  detailed 
analyses  of  specific  cases  which  have  been  the  subject  of  earlier  Mutual  assistance  (MA) 
communications.  It  describes  Member  States’  progress  in  recovering  amounts  of  TOR  in 
selected  cases  of  fraud  and  irregularity.  Recovery  is  often  especially  difficult  in  such  cases. 
This particularly applies when the customs debts concerned have been established after post-
clearance  checks.  An  additional  risk  will  exist  where  organised  crime  is  also  involved, 
because  criminals  will  make  every  effort  to  hide  recoverable  assets  from  seizure  and 
confiscation. This, of course, has a negative impact on the amount of money recovered. 

In the latest report, to which this is annexed, the Commission provides an update on the state 
of play of recovery in the 9 cases in the last B Sample from 1998 (B1998)3. Furthermore, the 
Commission  uses  this  opportunity  to  draw  a  picture  regarding  recovery  in  another  8  cases 
which were selected after the 1998 exercise. 

For each of these 17 cases, the Commission has collected data from the OWNRES database, 
in  which  Member  States  have  to  report  all  fraud  and  irregularities  detected  with  a  financial 
impact  on  the  Community  budget  of  over  €10,0004.  The  report  contains  the  conclusions 
drawn  from  this  research.  It  should  be  noted  that  all  data  extracted  from  OWNRES  was 
entered into the database under the responsibility of the Member States. 

The research process was greatly facilitated by the newly developed web-based version of the 
OWNRES database which enables all kind of queries to be made for research purposes. This 
contributed greatly to the quality of the analysis by the Commission and to the reliability of 
the  results  found.  Thus  it  was  possible  to  analyse  around  1,000  related  OWNRES  entries. 
Although  OWNRES  is  a  'dynamic'  database,  the  information  presented  here  should  be 
considered as the state of play as at 31 December 2003.  

2 
3 
4 

Approximately 30 inspections in EUR-25 Member States per year. 
COM (1999) 160 of 21.04.1999. 
Art. 6 sect. 5 Reg. 1150/2000, Council Regulation of 22.05.00, OJ L 130 of 31.05.00. 

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The  report  is  presented  differently  from  its  predecessors.  The  report  itself  focuses  on  the 
general observations and remarks following the detailed analysis of these 17 cases, while the 
case related remarks are encapsulated in annexs. 

2. 

SAMPLE B2003 

SELECTION OF THE SAMPLE 

The criteria for selecting cases for inclusion in the B sample are that the MA communication 
should involve several Member States and that the potential impact on the Community budget 
of the fraud or irregularity is over €1 million. In addition, either a Commission investigation 
(OLAF in particular) should have taken place or the customs debts in question are likely to 
become time-barred in the near future. Finally, the interest shown by the Budgetary Authority 
and the European Court of Auditors play a role in the selection process.  

These  were  the  criteria  also  used  to  obtain  the  latest  sample.  However,  the  sample  initially 
selected was subsequently changed because of the similarity of some of the cases monitored 
to that of Turkish Televisions, where successful recovery was precluded for several reasons, 
the most important of which was an active error by third country Authorities5. In this typical 
case in the origin field, the Court of First Instance gave a ruling in 2001 which not only had 
wide-ranging consequences for recovery in comparable cases in Member States, but also for 
the sample previously selected by the Commission. The Court held that a debtor should not be 
the victim of third country Authorities in a case where those authorities knew or should have 
known the non-originating nature of the goods to be exported from that third country (and to 
be  imported  in  the  Community).  As  a  consequence,  the  sample  was  reviewed  since  the 
purpose of the exercise was to draw an overall picture of outstanding recovery problems in the 
Member States. 

As a wide range of selected cases can contribute to the representativity of the sample the new 
cases selected involve a variety of goods, such as clothing, dairy products, cars, persulphate, 
shoes, silicon and shrimps from different exporting and different amounts of TOR. 

The cases also cover different kinds of fraud mechanisms such as manipulated customs values 
(American T-shirts), tariff misdescription (dairy products and Chinese Persulphate) and false 
origin  declarations.  All  the  cases  deal  with  import  transactions  and  declarations  for  free 
circulation;  only  in  the  case  of  dairy  products  are  other  irregularities  involved  (inward 
processing regime6). As far as TOR are concerned, the cases presented in this sample are not 
always  related  only  to  ‘traditional’  customs  duties:  the  dairy  products  case  concerns 
agricultural duties and anti-dumping duties are at stake in the cases of Chinese Persulphate, 
Cambodian shoes and Australian silicon.  

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Decision of the Court of First Instance of 10 May 2001 (Kaufring AG c.s./Commission) Joined cases T-
186/97,  T-187/97,  T-190/97  to  T-192/97,  T-210/97,  T-211/97,  T-216/97,  T-217/97,  T-218/97,  T-
279/97,  T-208/97,  T-293/97  and  T-147/99  (European  Court  reports  2001  Page  II-01337)  where  the 
Tribunal  of  First  Instance  decided  on  the  consequences  for  recovery  in  a  case  where  Third  country 
authorities knew or should have known the non-originating character of the goods in question. 
Inward  processing  is  a  Customs  regime  under  which  third  country  goods  to  be  processed  inside  the 
Community for later export, may be imported without paying customs duty. 

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Once the cases were selected MA communications and supplementary messages were used as 
the primary source for analysis together with the corresponding mission and final case reports. 
Progress on recovery per MA communication was researched on the basis of relevant Member 
State  data  in  the  OWNRES  database.  Before  any  final  conclusions  were  drawn  the 
Commission checked extensively whether the available date were reliable. Where the data in 
a  given  case  was  unclear,  the  Commission  either  asked  Member  States  for  clarification;  or 
liased with OLAF. 

All data collected led to specific reports on the stage of recovery in each of the MA files in 
this sample. Although these reports are to be found in Annex 2 to this report, their contents 
form an integral part of the overall report. 

FINDINGS FROM SAMPLE B2003 

When  all  the  cases  from  B2003  are  considered  together,  the  following  observations  can  be 
made. Where the fraud or the irregularity resulted in customs debts, 26% of these debts have 
been fully recovered whereas 68% are still subject to administrative appeals and the like or to 
judicial  procedures;  the  remainder  concerning  cases  closed  otherwise  because  of  e.g. 
cancellation  and  write-off  (for  more  details  see  Annexs  4,  5  and  6).  The  Commission  notes 
that the amounts to be recovered can be relatively high, but that the recovery procedures are 
progressing. Substantial further problems are not expected in any of these cases.  

The reasons for this are various. In none of these cases do obvious technical or policy hurdles 
exist to prevent recovery. Of course it is not possible to anticipate the outcome of the ongoing 
appeals  and  procedures,  but  once  they  are  finalised  with  positive  results  the  only  thing 
remaining, apart from recovery obstacles such as the insufficiency of assets available or the 
debtor’s  bankruptcy,  will  be  collection  of  the  duties.  If  customs  debts  also  remain  unpaid, 
however, Member States, under the Article 17(2) procedure of Regulation 1150/2000, have to 
ask  the  Commission  for  approval  of  their  write-off.  Because  the  Commission  will  hold 
Member  States  financially  responsible  when  they  have  not  taken  sufficient  care  for  the 
financial  interests  of  the  Community,  Member  States  have  an  incentive  to  perform. 
Awareness  of  the  potential  financial  consequences  of  under-performance  in  TOR  recovery 
encourages  Member  States  to  avoid  being  held  liable  by  increasing  their  efforts  to  ensure 
recovery. 

3. 

SAMPLE B1998 

UPDATE OF SAMPLE RESULTS 

After  analysis  of  B1998,  the  Commission  published  a  report  on  the  progress  of  recovery  of 
TOR  in  those  cases  of  fraud  and  irregularities7  in  1999.  That  report  described  9  cases,  also 
concerning  various  goods  from  various  countries.  These  cases  ranged  from  Spanish  sugar, 
Swiss  cheese,  Italian  bananas,  Hilton  beef  and  Costa  Rican  tuna  to  Indonesian  car  radios, 
Vietnamese bicycles and Laotian and Cambodian textiles. The cases were previously selected 
on the basis of similar criteria to those used in the B2003 exercise. 

7 

COM (1999) 160 of 21.04.1999. 

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All cases in this sample related to goods entering into free circulation. Therefore import duties 
were to be paid despite attempts having been made to evade these duties by origin fraud. In 
fact the cases of tuna, textiles, car radios and bicycles all represent recovery problems where 
origin preferences were claimed for non-originating goods. In some cases, in addition to the 
more usual import duties, anti-dumping duties had also to be paid (car radios and bicycles). 
Agricultural duties were due where bananas were fraudulently put on the Italian home market.  

The fraud mechanisms vary from origin fraud to the evasion of minimum prices for imports 
(Swiss cheese) and manipulating agricultural quotas in order to create an entitlement for duty-
free imports (Hilton beef). 

The Spanish sugar case provides a good example of how the Commission can hold Member 
States financially responsible where they have not taken sufficient care to protect the financial 
interests  of  the  Community.  Taking  into  account  the  moment  when  the  amount  of  TOR 
originally should have been paid to the Commission, the Commission not only asked for the 
amount of principal but also requested the Member State to pay belated interest. 

In  the  B1998  report,  the  descriptions  of  the  recovery  stage  of  each  of  these  files  were 
provisional because no final results were available at that time. Moreover, that report drew a 
distinction between proven cases and those where frauds or irregularities were only suspected. 
Once  again,  progress  in  recovering  TOR  in  those  cases  is  described  here  and  ‘more’  final 
conclusions are provided.  

Like the specific reports on the stage of recovery of the B2003 Sample, the reports related to 
the  B1998  Sample  are  also  to  be  found  in  an  annex  to  this  report.  Annex  3  contains  these 
specific reports which are also to be considered as an integral part of the report. 

FINDINGS FROM SAMPLE B1998 

When all B1998 cases are reviewed together, some observations similar to those made for the 
B2003 sample can be made by the Commission. Where the fraud or the irregularity gave rise 
to  customs  debts,  56%  of  these  debts  are  still  subject  to  administrative  appeals,  reviews  or 
procedures or even to judicial procedures in the Member States. Clearly these can take years; 
especially when fiscal, civil and penal procedures are being used in the same case; and when 
legal decisions in a first instance can be overruled by final decisions in a second or even third 
instance.  In  some  legal  systems  one  procedure  is  interrupted  (in  general,  the  civil  recovery 
procedure) until the other (usually, the criminal procedure) has been completed. This can lead 
to  further  delays  in  recovery.  Furthermore  it  is  possible  that  a  particular  debtor  not  only 
contests a given customs debt before a national judge, but he can also challenge it in front of 
the Community courts.  

Although  the  total  amount  still  to  be  recovered  by  the  national  administrations  in  Sample 
B1998  cases  is  over  €66  million  and  reflects  56%  of  those  debts,  recovery  procedures 
nevertheless  remain  in  progress  (for  more  details  see  Annexs  4,  5  and  6).  Once  these 
procedures have come to an end debtors must of course pay in all cases where the initial debt 
is  confirmed.  According  to  the  Member  States’  information  no  substantial  problems  have 
been met as far as progress in recovery for these cases is concerned.  

Apart  from  that,  following  the  Commission’s  analysis  of  these  old  cases  the  (absence  of) 
some expected OWNRES communications gave the Commission reason to believe that some 
files  might  be  under-represented  in  the  OWNRES  database.  It  is  possible  that  where  the 

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B1998  sample  concerns  relatively  old  MA  communications,  cases  were  already  closed  –  or 
simply  were  not  communicated  –  before  the  new  OWNRES  application  was  fully 
implemented.  Today,  however,  Member  States  are  obliged  to  register  in  OWNRES  any  old 
cases still outstanding when relevant changes occur (e.g. in the stage of recovery). For some 
files the Commission therefore asked Member States to check the actual stage reached in the 
recovery  process.  This  was  done  particularly  where  cases  had  been  entered  to  OWNRES  a 
long time ago, but had not been updated since. In ongoing cases the Member States concerned 
check  their  OWNRES  entries  and  correct  them  if  necessary.  Of  course  the  Commission 
checks the follow-up given by the Member States to these update requests. 

4. 

OVERALL FINDINGS 

MEMBER STATES’ EFFORTS TO IMPROVE RECOVERY TO BE CONTINUED 

It  is  important  to  bear  in  mind  the  context within  which  the  Commission  monitors  Member 
State  recovery.  Member  States  are  competent  for  TOR  recovery  procedures  on  the  national 
level.  Thus  they  are  responsible  for  making  customs  checks,  and  levying  and  collecting  the 
resulting  debts.  Under  the  Community  customs  code8,  the  Commission  has  only  indirect 
influence on national recovery processes. Member States decide on what to check, and when 
and how to recover. Therefore, to a large extent, the recovery of TOR in cases of fraud and 
irregularities is outside direct Commission control. 

Despite  Member  States  being  responsible  for  managing  their  recovery  procedures  the 
Commission needs to ensure that all Member States meet common standards when recovering 
TOR. To do otherwise would permit a non-performing Member State to transfer its liability 
for making 'losses' of TOR available to the Commission to other Member States who would 
have to pay via their GNP contributions. The Commission therefore uses the tools available to 
it, such as Regulation 1150/2000, to monitor performance and ensure that all Member States 
shoulder  the  same  burden  in  recovering  TOR.  Comparable  performance  between  Member 
States  in  recovering  TOR  also  contributes  to  maintaining  the  same  market  conditions  for 
commercial  transactions  across  internal  borders.  Operators  should  observe  that  different 
Member States treat equal cases equally. 

Regulation  1150/2000  governs  the  relationship  between  the  Community  and  the  Member 
States regarding the collection and recovery of TOR. It covers Member States' obligations for 
accounting for TOR and it provides the framework for dealing with TOR write-off requests 
from Member States. 

Where  the  Commission  is  evaluating  whether  or  not  to  approve  a  request  for  write-off  it 
focuses on the timeliness and completeness of the action taken. Should the national authorities 
not  have  demonstrated  due  diligence  (the  burden  of  proof  lays  with  the  Member  State)  the 
Commission withholds approval: as a consequence the Member State is obliged to transfer the 
corresponding amount to the Community budget. 

Member  States  are  required  to  apply  to  the  Commission  for  approval  of  write-off  where 
recovery possibilities have been exhausted but judging when this point has been reached is, 
under the present wording of Regulation 1150/2000, a matter for the Member State. Member 
States can choose when to apply to the Commission for write-off (or even whether to apply!). 

8 

Art. 232 of the Community Customs Code, Council Regulation of 12.10.92, OJ L 302 of 19.10.92. 

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To  encourage  Member  States  to  use  the  write-off  procedure  more  consistently,  the 
Commission has therefore adopted a proposal for amending Regulation 1150/2000, which has 
been  agreed  formally  by  the  Council  on  16  November  20049.  Member  States  then  have  a 
maximum period of five years from the end of any appeal procedure opened in which to deem 
a  customs  debt  irrecoverable  and  where  an  amount  over  €50,000  remains  outstanding  to 
report it to the Commission. 

This amendment will also benefit Member States. More candour regarding the likelihood of 
recovering TOR debts will mean that their national accounts will also give a clearer image of 
what is still to be recovered and what is payable to the Community. 

Whether  or  not  there  is  any  relation  with  the  proposed  modification,  the  Commission  can 
already  note  that  whereas  in  the  past  only  a  limited  number  of  Member  States  reported 
irrecoverable cases under the Article 17(2) procedure, today all (EU 15) Member States but 
one seem to apply this procedure in designated cases. The only one exception is Luxemburg, 
which  has  recovered  all  customs  debts,  and  as  a  consequence  has  had  no  write-off  cases  to 
communicate to the Commission. 

THE RELIABILITY OF OWNRES DATA NEEDS FURTHER IMPROVEMENT 

Of course the reliability of any conclusions reached on the adequacy of the recovery actions 
taken  by  the  Member  States  is  directly  related  to  the  quality  of  the  data  in  the  OWNRES 
database. Since the Commission introduced a new web-based OWNRES application in 2003, 
Member  States  have  full  responsibility  for  the  actual  contents  of  the  database.  In  addition 
Regulation  1150/2000  requires  Member  States  to  communicate  all  cases  of  fraud  and 
irregularities  exceeding  €10,000  to  the  Commission.  However,  notwithstanding  the  overall 
obligation  for  the  Member  States  of  good  cooperation  with  the  Commission  flowing  from 
Article 10 of the Treaty, it must always be acknowledged that Member States may not have 
communicated all cases, or may not have properly updated cases previously communicated to 
the Commission. So any conclusions drawn on the existence of frauds and irregularities may 
be questionable as far as numbers, amounts of money and the stage of recovery are concerned. 
Clearly,  however,  not  only  the  Commission  but  indeed  also  the  Discharge  Authority  is 
entitled to reliable and up-to-date information regarding frauds and irregularities. 

Therefore outside the B Sample the Commission is at present checking the overall reliability 
of  OWNRES  by  comparing  data  from  the  separate  or  B-account  (the  account  containing 
unpaid  customs  debts  which  have  not  been  guaranteed  or  are  guaranteed  but  have  been 
contested)10  as  per  31  December  2003  with  that  from  OWNRES.  All  unpaid  debts  over 
€10,000 related to frauds and irregularities should not only to be entered in the B-account, but 
also  in  the  OWNRES  database.  Therefore  any  item  in  the  B-account  might  be  expected  to 
have a matching OWNRES case. However, this only applies while comparing the B-account 
with OWNRES. When comparing the OWNRES database with the B-account this might not 
be true. There are circumstances where a detected fraud might not results in a customs debt. 
In  a  case  of  tobacco  smuggling  for  example,  where  the  goods  (without  having  entered  the 
market)  have  been  seized  in  advance  of  confiscation  or  destruction  afterwards,  the  customs 
debt will be extinguished11. Such smuggling cases must be entered in the OWNRES database, 

9 
10 
11 

Reg. 2028/2004, Council Regulation of 16.11.04, OJ L 352 of 27.11.04. 
Art. 6 sect. 3 sub b Reg. 1150/2000, Council Regulation of 22.05.00, OJ L 130 of 31.05.00. 
Art.  233  sub  d  of  the  Community  Customs  Code,  Council  Regulation  of  12.10.92,  OJ  L  302  of 
19.10.92. 

EN 

11 

   EN 

 
                                                 
whereas  they  might  not  appear  in  the  B-account.  Another  example  would  be  an  irregularity 
which  after  detection  results  in  the  establishment  of  a  customs  debt,  which  is  paid 
immediately.  Again,  the  irregularity  must  be  recorded  in  OWNRES,  although  the  paid  debt 
will not appear in the B-account. 

The  Commission  previously  made  such  a  comparison  during  2003  using  data  as  at  31 
December 2001. The results from that exercise were not encouraging, hence the decision to 
redo the comparison in 2004. Preliminary results obtained by the Commission suggest that the 
overall reliability of OWNRES improved substantially last year. Not only did the Commission 
find  many  more  matches  between  B-account  entries  and  OWNRES  cases  than  before;  the 
Commission was also now able to compare the actual recovery stage of customs debts from 
the B-account with the related information in the corresponding OWNRES communications. 
As explained before, this enabled the Commission to take action against those Member States 
that  had  entered  incorrect  information  or  had  not  promptly  updated  initial  OWNRES 
communications. 

Although Member States still need to improve aspects of their overall OWNRES performance 
dramatically,  generally  speaking  the  higher  the  recoverable  amount  in  a  suspected  fraud  or 
irregularity,  the  more  reliable  the  OWNRES  entries  appear  to  be.  Apart  from  the  legal 
obligation  to  communicate  substantial  frauds  and  irregularities  to  the  Commission,  the 
financial  and  policy  aspects  of  a  big  case  may  be  encouraging  Member  States  to  show  that 
they manage the recovery process properly and that recovery is proceeding. This also seems 
to apply when customs debts are related to previous MA communications.  

Taking preliminary results from the latest comparison between the B-account and OWNRES, 
together  with  the  experience  obtained  in  the  framework  of  the  write-off  procedure,  the 
Commission  considers  the  OWNRES  data  related  to  the  MA  communications  mentioned  in 
the present report a sufficiently reliable basis to be used for the observations and conclusions 
made.  

THE COMMISSION CONTINUES TO FOCUS ON WRITE-OFF PROCEDURE 

Under a modification to Regulation 1150/2000 agreed by the Council on 16 November 2004 
all Member States have to request Commission approval for write-off by a fixed time (no later 
than  five  years  after  the  conclusion  of  any  appeal  proceedings)  for  all  customs  debts  where 
amounts  over  €50,000  remain  outstanding12.  This  means  that  the  Commission  will  have  the 
opportunity of reviewing Member States’ write-off cases either when submitted for approval 
or  during  the  annual  scrutiny  of  Member  State  records  of  their  own  write-offs  of  amounts 
below the threshold. Because almost all substantial cases of fraud and irregularities result in 
appeals during which the customs debt remains unpaid, and because these debts are not easily 
recovered, almost all debts resulting from cases of fraud or irregularity have to be entered in 
the  separate  account.  This  regulatory  change  therefore  also  makes  it  likely  that  the 
Commission  will  be  able  to  check  Member  States'  follow-up  of  all  large  entries  in  the 
separate account within a fixed period. 

Thus  the  Commission  will  be  able  to  better  monitor  the  follow-up  of  cases  of  fraud  and 
irregularities;  not  only  through  the  separate  account  but  also  by  evaluating  Member  States' 
requests  for  approval  of  write-off  and  their  performance  in  making  write-offs  themselves. 

12 

Reg. 2028/2004, Council Regulation of 16.11.04, OJ L 352 of 27.11.04. 

EN 

12 

   EN 

 
                                                 
Together with the improved query capabilities of the web-based OWNRES and the improved 
OWNRES input in terms of quality, the Article 17(2) procedure will provide the Commission 
with  an  accurate,  complete  and  up-to-date  view  on  progress  in  recovering  customs  debts 
arising  from  cases  of  fraud  and  irregularity.  In  addition,  this  new  approach  will  enable 
Member States to show their commitment to recovering TOR. Furthermore the new approach 
is appropriate because of the  relatively  small percentage of customs debts like these (which 
normally are accounted for in the separate account) when compared to all those customs debts 
recovered in the Community without any problem at all13. In these circumstances the current 
sample approach need not be maintained.  

For  this  new  strategy  to  succeed  fully  it  will  be  necessary  for  Member  States  to  discharge 
their responsibilities properly and to ensure that the OWNRES database is complete, accurate 
and updated in a timely fashion. To encourage the improvement required the Commission is 
monitoring  the  state  of  OWNRES  and  although  the  overall  performance  may  not  be  fully 
reliable at present, the Commission will continue to audit OWNRES and develop initiatives to 
improve Member State contributions. 

The Commission's change of methodology in not producing further Sample reports does not 
mean that Parliament will no longer be informed about this aspect of TOR. On the contrary, 
the Commission will continue to report periodically trends or developments in the recovery of 
TOR  in  cases  of  fraud  and  irregularities  to  OLAF.  As  at  present  OLAF  will  continue  to 
integrate  this  information  in  its  annual  Report,  based  on  Article  280  of  the  Treaty,  on  the 
protection  of  the  financial  interests  of  the  Community  and  the  fight  against  fraud.  In 
accordance with the Regulation, the Commission could also incorporate this information in its 
triennial  report  to  the  European  Parliament  and  to  the  Council  on  the  functioning  of  the 
inspection arrangements14. 

Focussing on the write-off procedure will not be the only means used by the Commission to 
check  Member  States’ 
recovery  performance.  Other  more  general  concepts  and 
methodologies developed for the purpose of monitoring recovery progress will also be used in 
cases  of  fraud  and  irregularities.  As  mentioned  before,  the  Commission,  under  the write-off 
procedure  will  hold  Member  States  financially  liable  when  they  have  shown  a  lack  of 
diligence in recovering customs debts. The Commission, however, also holds Member States 
financially  responsible  in  case  of  other  errors  made  or  damage  done  during  the  recovery  of 
customs  debts.  In  recent  years  the  Commission  has  developed  this  approach  in  different 
categories  of  cases,  one  of  which  is  the  failure to  enter  duties.  It  is  possible  that  a  Member 
States may fail to enter duties because the debt concerned has become time-barred as a result 
of  the  customs  authorities’  failure  to  act.  This  is  an  error  if  these  authorities  were  in 
possession of all the details needed to enter the duties and communicate them to the debtor. 
Especially in cases of suspected fraud and comparable irregularities it is possible that Member 
States do not establish a customs debt in time, although they are able to do so. This applies 
particularly where MA messages have been sent which contain all the necessary elements for 
the Member State to start  recovery action, even when a reasonable time to act is taken into 
account, but they do not. 

13 

14 

E.g. the relation between the payments for customs debts from the separate account and all payments 
received by the Commission in 2003 for the Community as a whole will be between 1-2 %. 
Art. 18 sect. 5 Reg. 1150/2000, Council Regulation of 22.05.00, OJ L 130 of 31.05.00. 

EN 

13 

   EN 

 
                                                 
ANNEX 2 

Sample B 2003 – 0verview of selected cases 

2.1 

JEANS AND T-SHIRTS FROM USA 

AMOUNTS 
INVOLVED 

€4 706 192  

37%

AMOUNTS TO BE 
RECOVERED 

€2 970 373  

Am ounts  to be
re cove re d

Am ounts  in
finalis e d cas e s

63%

In 1994 Member States were asked by MA message (MA 96/94) to identify parallel imports 
of  branded  goods  (especially  Levi  jeans  from  the  USA)  and  to  examine  the  customs  values 
declared. A criminal investigation in Denmark had led to the discovery of a valuation fraud. 
Large quantities of branded textiles had been imported and the customs values declared were 
far below the real value. This permitted parallel importers to compete unfairly with authorised 
importers of the branded textiles. The fraud mechanism consisted of either the presentation of 
false invoices produced by the USA exporters or the importers in the Member States, or by 
declaring  the  goods  to  be  'seconds'.  Several  similar  investigations  were  made  in  the 
Netherlands, France, Italy and Germany. OLAF passed the Italian, Dutch and French findings 
on to all Member States in 1995. All the investigations appear to have led to recovery activity. 
According  to  OWNRES  the  Member  States  concerned  are:  Belgium,  Denmark,  Finland, 
France, Germany, Italy, the Netherlands, Spain and Sweden.  

Actual situation 

OWNRES  data  provided  by  Member  States  currently  shows  52  cases  referring  to  incorrect 
customs values for textiles (denim trousers, other trousers, T-shirts) of US origin. 21 of these 
cases are closed as all the amounts were recovered (except for one case cancelled). 31 cases 
(around 60%) still remain open and the total amount of duties still to be recovered is around 
€3  million.  In  all  the  open  cases  the  recovery  procedure  is  progressing  but  administrative 
appeals or reviews, or judicial procedures are not yet finished. 

MEMBER STATE 

AMOUNTS INVOLVED 

AMOUNTS IN 
FINALISED CASES 

AMOUNTS TO BE 
RECOVERED 

Italy 

Spain 

The Netherlands 

Germany 

France 

Sweden 

Denmark 

Finland 

Belgium 

total: 

EN 

€51 144

€832 792

€132 280

€1 461 169

€749 290

€11 526

€164 518

€101 292

€1 202 181

€4 706 192

14 

€26 553

-

€100 744

€193 903

€36 394

€11 526

€164 518

-

€1 202 181

€1 735 819

€24 591

€832 792

€31 536

€1 267 266

€712 896

-

-

€101 292

-

€2 970 373

   EN 

 
 
Conclusion 

Although more than half the cases remain open and the amount of duties to be recovered is 
relatively  large,  the  Commission  does  not  anticipate  that  Member  States  will  meet  any 
substantial problems in pursuing the remaining recovery action. Any cases where amounts are 
not  fully  recovered  will  need  to  be  sent  to  the  Commission,  at  the  appropriate  time,  with  a 
request to approve write-off. 

2.2  MILK  POWDER  AND  BUTTER 
FROM THIRD COUNTRIES 

AMOUNTS 
INVOLVED 

€15 986 377  

AMOUNTS TO BE 
RECOVERED 

€15 616 882  

2%

98%

Am ounts  to be
re cove re d

Am ounts  in
finalis e d cas e s

As a result of investigations carried out by the Italian and German authorities, and following a 
Community  mission  to  Austria  in  1994,  it  was  established  that  large  quantities  of  dairy 
products (milk powder and butter) of third country origin were coming into the Community 
via Austria. These goods were wrongly declared as cultures (for the development) of micro-
organisms for which agricultural duties were not due. In fact, however, the goods were dairy 
products (milk powder and butter) and should have been declared under tariff codes liable to 
agricultural  duties.  Furthermore  the  fraud  mechanism  consisted  of  using  the  inward 
processing  procedure  to  minimally  transform  the  goods  hiding  their  real  nature  and  origin. 
This led to the non-payment of the agricultural duties due. In addition the importers obtained 
Binding Tariff Information from various customs authorities which were used to declare the 
goods.  These  findings  were  all  provided  to  Member  States  by  MA  communications  (MA 
64/95). 

Actual situation 

There are very many cases in OWNRES arising from the import of dairy products and several 
MA  communications  referring  to  these  commodities  too.  The  frequency  of  fraud  or 
irregularity in this type of product coupled with the multiplicity of MA messages highlighted 
the  importance  of  Member  States  supplying  the  information  necessary  to  enable  the 
Commission to establish clearly the link between an OWNRES case and any underlying MA 
message. It seemed that there was a risk that the OWNRES output in this field might not be 
fully representative. Therefore those cases involving the same tariff codes as MA 64/95 were 
examined closely. This examination excluded 214 of the items, leaving 11 cases in OWNRES 
which appear to be related to this MA message. 

For these 11 items the state of play regarding recovery is as follows. 4 cases have been closed 
because  the  amounts  have  been  fully  recovered.  1  further  case  was  closed  after  an 
administrative  appeal  or  review,  which  resulted  in  cancellation  of  the  debt.  OWNRES  data 
communicated  by  Member  States  shows  that  6  cases  still  remain  open  with  judicial 
procedures  underway.  The  amount  to  be  recovered  is  relatively  large  -  more  than  €15.5 

EN 

15 

   EN 

 
 
 
million  -  and  in  only  one  of  these  ongoing  cases  has  there  been  a  partial  recovery  (almost 
€100,000).  

MEMBER STATE 

AMOUNTS INVOLVED 

AMOUNTS IN 
FINALISED CASES 

AMOUNTS TO BE 
RECOVERED 

Austria 

Italy 

the Netherlands 

Conclusion 

€127 917

€15 745 712

€112 748

total:

€15 986 377

€127 917

€128 830

€112 748 

€369 495

-

€15 616 882

-

€15 616 882

When these judicial procedures have been finalised, recovery for this relatively large amount 
will go ahead. 

2.3 

CARS FROM HUNGARY  

AMOUNTS 
INVOLVED 

€14 729 764  

AMOUNTS TO BE 
RECOVERED 

€6 357 159  

57%

43%

Am ounts  to be
re cove re d

Am ounts  in
finalis e d cas e s

Following  an  MA  communication  in  1996  (MA  57/96),  Member  States  sent  certificates  for 
subsequent  verification  to  Hungary  to  check  the  origin  declared  for  imported  Suzuki  cars. 
However, not all Member States included the certificates for all imports in their requests to 
the  Hungarian  authorities  for  post-clearance  checks.  On  the  basis  of  the  information  in  the 
MA message Member States could reach to the conclusion that they had no reasonable doubt 
enough  to  send  all  certificates  to  Hungary.  This  was  partly  due  to  the  great  number  of 
subsequent Supplements which followed OLAF's initial MA message over the course of some 
years which could confuse Member States; partly this was caused by the body of information 
itself which was distributed to the Member States and which had to be interpreted by them.  

In  1998,  following  a  control  mission,  OLAF  sent  a  mission  report  to  Member  States.  It 
included  details  of  all  the  certificates  thought  to  have  been  issued  for  non-originating  cars. 
The  Community's  conclusions  were  initially  shared  by  the  Hungarian  authorities,  who 
withdrew  more  than  half  of  the  certificates  issued.  Of  course,  Member  States  were  not  in  a 
position  to  establish  or  enter  customs  debts  in  the  accounts  for  those  certificates  for  which 
they  had  not  requested  verification.  As  a  result  any  such  debts  became  time-barred.  14 
Member States were involved to a greater or lesser degree. However, in 1999, the Hungarian 
Courts  re-established  Hungarian  origin  for  almost  half  of  the  certificates  previously 
withdrawn.  The  other  invalid  certificates  remained  withdrawn  and  therefore  customs  debts 
arising  from  imports  accompanied  by  these  certificates  fell  to  be  recovered.  Where  these 
amounts were time-barred then the question of Member States' liability to pay these amounts 
themselves arose. 

Following a debate on the merits of the Hungarian Court decision the Commission initiated a 
discussion whether any reaction from the Community towards the Hungarian authorities was 
appropriate. Although this discussion took quite a lot of time the Commission in the end did 

EN 

16 

   EN 

 
  
nothing and decided to accept the Court decision as it was. For the Member States the overall 
situation and especially the question which customs debts had to be recovered on the basis of 
which  certificates  remained  unclear  until  the  Commission  would  have  taken  a  clear-cut 
position on this issue. 

Only recently, the Commission has concluded that although Member States remain liable in 
principle  for  time-barred  debts  that  they  should  not  be  held  responsible  for  those  customs 
duties which became time-barred before the date of receipt of the Community's mission report 
in 1998. The Commission communicated this position to the Member States in the appropriate 
committee  forums.  In  2003,  the  Commission  therefore  asked  Member  States  to  inform  it  of 
those amounts which became time-barred after 1998. The Commission is currently examining 
the  Member  States'  responses  to  see  whether  Member  States  must  be  held  financially 
responsible for this lack of diligence. 

Actual situation 

40  possibly  related  cases  reported  by  the  Member  States  to  OWNRES  can  be  found  in  the 
database of which 17 cases are directly linked to this MA message. Out of these 40 cases, 16 
are closed with most of the amounts due recovered. OWNRES currently shows 24 open cases 
in various Member States with a total recoverable amount exceeding €6.3 million.  

MEMBER STATE 

AMOUNTS INVOLVED 

AMOUNTS IN 
FINALISED CASES 

AMOUNTS TO BE 
RECOVERED 

Austria 

Belgium 

Denmark 

Finland 

France 

Germany 

Ireland 

Italy 

the Netherlands 

the United Kingdom 

Conclusion 

€2 588 230

€711 463

€1 187 174

€83 865

€1 775 825

€3 122 429

€462 685

€2 383 973

€999 124

€1 414 996

total:

€14 729 764

€767 077

€684 393

€1 187 174

€83 865

-

€1 906 362

€229 349

€2 291 141

-

€1 223 244

€8 372 605

€1 821 153

€27 070

-

-

€1 775 825

€1 216 067

€233 336

€92 832

€999 124

€191 752

€6 357 159

According to OWNRES all the open cases are either under administrative review or in Court 
for appeals. It may be that the recent steps undertaken by the Commission have not yet led to 
new  administrative  or  legal  decisions  or  that  OWNRES  has  not  yet  been  updated.  It  is 
anticipated that these cases will now be rapidly finalised. 

2.4 

SHRIMPS FROM HONDURAS 

33%

Am ounts  to be
re cove re d

Partial re cove ry

67%

EN 

17 

   EN 

 
AMOUNTS 
INVOLVED 

€1 416 821  

€951 102  

AMOUNTS TO BE 
RECOVERED 

In  1997  the  Commission  received  information 
indicating  that  Honduran  companies  had  supplied 
frozen  processed  shrimps  obtained  from  non-
originating raw materials, to the Community under 
cover of Honduran certificates of origin. Preferential treatment can only be granted for frozen 
processed  shrimps  where  the  raw  materials  have  been  wholly  obtained  in  the  beneficiary 
country,  in  its  territorial  waters  or  caught  by  its  vessels  outside  those  waters.  Preliminary 
research  by  the  Commission  and  the  Member  States  concerned,  principally  Spain  and  the 
United  Kingdom,  indicated  that  significant  quantities  of  fully-formed  small  live  shrimps 
(post-larvae) had been imported into Honduras from Panama, Ecuador and the United States 
of  America.  Such  shrimps  would  not  be  entitled  to  preferential  treatment  if  imported  to  the 
EU. OLAF informed Member States of the results of these enquiries by MA communication 
(MA  27/97).  In  1999  a  joint  mission  between  a  Community  delegation  and  the  local 
authorities verified the origin of raw materials used. It was concluded that large quantities of 
non-originating raw materials had been imported by several companies in order to maximize 
the export of processed shrimps to the EU on preferential terms.  

Actual situation 

Currently OWNRES shows 5 'open' cases notified by the Member States to the database. The 
amount of duties still to be recovered is almost €1 million. According to OWNRES, recovery 
is in progress; with 1 case under administrative appeal.  

MEMBER STATE 

AMOUNTS INVOLVED 

AMOUNTS IN 
FINALISED CASES 

AMOUNTS TO BE 
RECOVERED 

the United Kingdom 

Spain 

total: 

Conclusion 

€966 792

€450 029

€1 416 821

€465 719

-

€465 719

€501 073

€450 029

€951 102

Apart  from  1  case  with  a  possible  time-barred  customs  debt,  no  further  problems  are  to  be 
expected. 

2.5 

SHRIMPS FROM ICELAND 

AMOUNTS 
INVOLVED 

€324 951  

AMOUNTS TO BE 
RECOVERED 

---  

Am ounts  in
finalis e d cas e s

100%

In  1996  the  Commission  received  information  alleging  that  Icelandic  companies  were 
exporting frozen processed shrimps to the Community under cover of Icelandic certificates of 
origin  or  invoice  declarations  although  using  raw  materials  from  Canada,  Ukraine,  Latvia, 
Russia and Lithuania. According to the rules of origin operating for the European Economic 
Area (EEA) only raw materials wholly obtained in the EEA can be used for finished products 

EN 

18 

   EN 

 
 
  
which are entitled to preferential treatment. Based on this information from the Commission, 
the Icelandic customs authorities carried out preliminary enquiries. OLAF communicated the 
results to the Member  States  by  MA  message in 1997 (MA 2/97). It seemed that Denmark, 
France,  Germany,  Sweden  and  the  UK  were  involved.  A  joint  mission  including  the 
Commission,  the  Icelandic  authorities  and  the  UK  (as  the  importing  Member  State  most 
concerned) visited 10 Icelandic shrimp processing companies in 1997. These companies had 
imported  significant  quantities  of  third-country  raw  materials  (post-larvae)  and  were  either 
direct  exporters  of  finished  products  or  were  linked  to  large  Icelandic exporting  companies. 
The Mission report was sent to Member States at the end of 1997 without however, details of 
individual  certificates.  In  1998  a  second  mission  was  made  and  a  Supplementary  Report 
provided  to  Member  States.  Nevertheless,  Member  States  did  not  receive  all  the  supporting 
documents  until  April  1998.  Because  of  this,  by  the  time  Member  States  were  able  to  start 
recovery, some consignments imported to the UK and possibly some to other countries were 
already time-barred. 

Actual situation 

According  to  information  from  OWNRES  9  cases  entered  to  the  database  by  the  Member 
States  and  arising  from  imports  to  the  United  Kingdom,  Denmark  and  Sweden  are  closed 
because all duties have been recovered. OWNRES does not show any open cases.  

MEMBER STATE 

AMOUNTS INVOLVED 

AMOUNTS IN 
FINALISED CASES 

AMOUNTS TO BE 
RECOVERED 

Denmark 

Sweden 

the United Kingdom 

total:

Conclusion 

€90 596

€23 200

€211 155

€324 951

€90 596

€23 200

€211 155

€324 951

-

-

-

-

This file may be considered closed. 

2.6 

PERSULPHATE FROM CHINA  

AMOUNTS 
INVOLVED 

€4 091 532  

AMOUNTS TO BE 
RECOVERED 

€2 026 171  

50%

50%

Am ounts  to be
re cove re d

Am ounts  in
finalis e d cas e s

An anti-dumping duty was imposed on imports of persulphates of Chinese origin in 1995. In 
1999 Spanish Customs informed OLAF of their suspicions that importations of persulphates 
apparently from Malaysia and Taiwan had actually originated in China. European persulphate 
producers, represented by the European Chemical Industry Council, also informed OLAF of 
their suspicions concerning the supply to the Community market of Chinese persulphates by 
Thailand, Indonesia and Vietnam. Member States were informed of these suspicions and the 
findings from preliminary enquiries carried out in Spain by MA message (MA 11/2000). In 
the  course  of  subsequent  investigations  further  findings  were  communicated  to  the  Member 
States  by  supplementary  MA  messages.  The  fraud  mechanism  consisted  of  the  false 

EN 

19 

   EN 

 
 
declaration  of  origin  to  avoid  paying  the  anti-dumping  duty  due  on  imports  of  Chinese 
persulphates.  Additionally  some  goods  were  misdeclared  under  another  tariff  code  (goods 
under this code were not subject to anti-dumping duty, even if they were of Chinese origin). A 
Community  mission  in  association  with  the  authorities  from  Taiwan  and  Hong  Kong  was 
carried  out  in  June  2001.  The  information  then  obtained  confirmed  that  large  quantities  of 
Chinese  persulphates  had  been  imported  to  the  Community  but  declared  as  originating  in 
Taiwan. Member States therefore had to recover the anti-dumping duty evaded.  

Actual situation 

At present OWNRES records based on Member State notifications show 49 cases. 19 of them 
are closed, in 13 the amounts have been fully recovered and in the remaining 6 the debts have 
been cancelled as a result of an administrative appeal or legal procedure. 30 cases (or more 
than  60%  of  the  total)  remain  open  with  a  total  amount  to  be  recovered  of  more  than  €2 
million.  Recovery  is  in  progress.  In  5  cases  administrative  appeals  or  reviews  have  been 
launched.  

MEMBER STATE 

AMOUNTS INVOLVED 

AMOUNTS IN 
FINALISED CASES 

AMOUNTS TO BE 
RECOVERED 

Belgium 

Germany 

Italy 

the Netherlands 

Portugal 

Spain 

the United Kingdom 

€1 121 911

€340 245

€469 532

€862 322

€14 678

€335 899

€946 945

€578 345

€20 245

€208 934

€392 101

€14 678

€199 172

€651 886

total: 

€4 091 532

€2 065 361

Conclusion 

€543 566

€320 000

€260 598

€470 221

-

€136 727

€295 059

€2 026 171

Based  on  the  information  currently  available  in  OWNRES  finalising  recovery  of  the 
remaining debts should present no particular problems. 

2.7 

SHOES FROM CAMBODIA  

AMOUNTS 
INVOLVED 

€1 436 277  

21%

AMOUNTS TO BE 
RECOVERED 

€1 137 260  

Am ounts  to be
re cove re d

Am ounts  in
finalis e d cas e s

79%

From  1997  OLAF  conducted  a  number  of  investigations  on  irregular  imports  of  footwear 
suspected to be of Chinese origin but which at import were declared as being of Cambodian 
or  other  preferential  origin.  An  MA  message  was  sent  to  the  Member  States  in  1999  (MA 
56/99).  It  pointed  out  that  many  of  the  same  economic  operators  (sellers,  account  offices, 
carriers,  shipping  companies)  had  been  involved  in  previous  investigations  of  similar 
irregularities with imports of shoes with declared preferential origins of Vietnam or Myanmar 
(MA  37/97).  In  2002  the  Commission  conducted  a  mission  in  Cambodia  with  cooperation 

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from the local authorities. The evidence collected during this mission showed that significant 
quantities  of  shoes  imported  to  the  Community  were  not  of  preferential  Cambodian  origin. 
False  declarations  of  the  origin  of  these  shoes  allowed  the  admission  for  free  circulation  of 
products  which,  if  correctly  declared  as  being  of  Chinese  origin,  would  be  subject  to  either 
quantitative restrictions or anti-dumping duties. This evidence enabled Member States to start 
recovering customs duties. 

Actual situation 

OWNRES data provided by the Member States shows 23 cases related to this file concerning 
Belgium,  Denmark,  France,  Germany,  Italy,  the  Netherlands  and  the  UK.  10  of  these  cases 
remain open with a total amount of duties to be recovered of more than €1.1 million but no 
difficulties  are  expected.  13  cases  (more  than  half  of)  are  closed  with  the  amounts  fully 
recovered, except for 2 cases closed where debts were cancelled because the declared origin 
of the shoes was confirmed to be correct.  

MEMBER STATE 

AMOUNTS INVOLVED 

AMOUNTS IN 
FINALISED CASES 

AMOUNTS TO BE 
RECOVERED 

Belgium 

Denmark 

France 

Germany 

Italy 

the Netherlands 

the United Kingdom 

€125 915

€12 126

€832 280

€331 778

€28 318

€84 730

€21 130

total:

€1 436 277

Conclusion 

Recovery is proceeding. 

2.8 

SILICON FROM AUSTRALIA  

AMOUNTS 
INVOLVED 

€452 163  

AMOUNTS TO BE 
RECOVERED 

€91 099  

80%

-

€12 126

€178 129

-

€28 318

€59 314

€21 130

€299 017

20%

€125 915

-

€654 151

€331 778

-

€25 416

-

€1 137 260

Am ounts  to be
re cove re d

Am ounts  in
finalis e d cas e s

As a result of post-importation controls carried out in Italy it was established that during 1996 
cargos of silicon declared as being from Australia had in fact originated in China. This was 
reported  to  OLAF  and  subsequently  communicated  to  the  Member  States  by  MA  message 
(MA 42/98). The silicon declared as of Australian origin had been brought to the Community 
via Hong Kong. During the course of the investigation The State Chamber of Commerce in 
Sydney  confirmed  that  the  certificates  of  origin  presented  were  false,  therefore  the  anti-
dumping duty due had been evaded. 

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21 

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Actual situation 

Currently  OWNRES  data  notified  by  Italy  shows  21  cases  related  to  this  MA  message.  15 
cases are already closed because the amounts due were recovered. In the 6 remaining cases, 
debts  have  been  established  and  recovery  is  in  progress.  The  total  recoverable  amount  is 
relatively small, around €91,000.  

MEMBER STATE 

AMOUNTS INVOLVED 

AMOUNTS IN 
FINALISED CASES 

AMOUNTS TO BE 
RECOVERED 

Italy 

Conclusion 

€452 163

€361 064

€91 099

No further problems are expected in progressing recovery. 

EN 

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ANNEX 3 

Sample B 1998 – Overview of selected cases 

3.1 

SPANISH SUGAR  

AMOUNTS 
INVOLVED 

€4 771 567  

49%

AMOUNTS TO BE 
RECOVERED 

€2 450 060  

51%

Am ounts  to be
re cove re d

Am ounts  in
finalis e d cas e s

A  front  organisation  of  fraudulent  companies  based  in  tax  havens  shipped  several 
consignments of sugar declared for export from Antwerp but diverted the goods to Spain. This 
organisation  claimed  and  received  export  refunds  although  it  did  not  pay  customs  duties  in 
Spain  (MA  53/93).  The  transports  were  covered  by  falsified  documents  and  were  unloaded 
fraudulently. The final consignment was seized and sold. Export refunds had to be repaid and 
customs duties paid. 

Spain  twice  requested  approval  for  write-off  but  this  was  not  granted  as  the  Commission 
considered that Spain had not been sufficiently diligent in protecting the financial interests of 
the Community. 

Following  the  B1998  Report  the  Commission  requested  Spain  to  establish  the  duties  and 
levies  due  on  the  proceeds  from  the  sale  of  the  seized  ship  cargo  and  to  transfer  these 
resources to the Commission. Spain transferred the amounts in 1999 and paid belated interest. 
Furthermore in 1997 the Commission requested the Spanish authorities to transfer an amount 
of almost €2.5 million in compensation for the own resources not collected because of their 
negligence. After a reminder Spain paid that amount plus interest on the delay in 1998.  

At this moment a total of three related write-off requests from Spain have been refused by the 
Commission,  after  which  Spain  paid  the  amounts  to  the  Commission  for  which  they  were 
financially  held  responsible.  Today  the  Commission  has  to  decide  on  a  fourth  write-off 
request  from  Spain  in  the  same  file.  Like  before,  the  Commission  will  refuse  the  approval 
because Spain had not been diligently in protecting the financial interests of the Community. 
After payment of the amounts concerned by Spain, as far as the Commission is concerned, the 
file can be closed. 

Spain, however, communicated a Spanish Court decision to the Commission which is used by 
Spain to frame a subsequent reimbursement request to the Commission. This Court decision 
apparently rules that whenever unjustified paid export refunds have been repaid, the exported 
goods  concerned  can  be  considered  as  Community  goods  again.  As  a  result  of  this,  no 
customs duties for any following imports need then to be recovered. On the basis of this Court 
ruling Spain informed the Commission that it will therefore ask to be reimbursed for amounts 
previously  paid  to  the  Commission  in  the  same  file.  The  Commission,  however,  is  of  the 
opinion that Spain forgets the ruling of the European Court of Justice in the so called Dutch 
butter  case.  In  a  comparable  case  of  unjustified  paid  export  refunds  and  subsequent 

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23 

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introduction of the exported goods into the Community, the Court ruled that the Community 
legislation  on  imports  and  exports  each  operates  on  its  own  and  independently  from  each 
other.  As  a  consequence  not  only  unjustified  paid  export  refunds  have  to  be  repaid  to  the 
Community but also customs debts on subsequent imports have to be recovered. 

Actual situation 

OWNRES  shows  3  cases  reported  by  Spain  which  can  be  considered  as  related  to  this 
particular fraud. 1 case is closed with the due amount recovered and 2 cases are open with a 
recoverable amount of almost €2.5 million. Again, it has to be noted that in this case the open 
amount is not to be paid by regular customs debtors, but by Spain. 

MEMBER STATE 

AMOUNTS INVOLVED 

AMOUNTS IN 
FINALISED CASES 

AMOUNTS TO BE 
RECOVERED 

Spain 

Conclusion 

total: 

€4 771 567

€4 771 567

€2 321 507

€2 321 507

€2 450 060

€2 450 060

When the procedure concerned will have been finalised in favour of the Commission, Spain 
will have to pay the open amount to the Commission. 

3.2 

CHEESE FROM SWITZERLAND  

AMOUNTS 
INVOLVED 

€86 672 935  

AMOUNTS TO BE 
RECOVERED 

€47 901 113  

45%

Am ounts  to be
re cove re d

Am ounts  in
finalis e d cas e s

55%

When  Emmental,  Gruyere  and  Sbrinz  cheeses  were  imported  to  the  Community  from 
Switzerland a low tariff was payable only where a minimum import price was exceeded. To 
benefit  from  the  preferential  tariff,  the  producers  of  these  Swiss  cheeses  were  obliged  to 
obtain a document from the USF-Union Suisse du commerce de fromage confirming the price 
payable exceeded the minimum import price. It was established that substantial consignments 
of  Emmental  cheese  had  been  imported  to  Germany,  France  and  Italy,  to  be  used  for  the 
production of melting cheese. These did not meet the minimum import price requirement in 
the period 1992-1995, because part of the transaction price was repaid to the importers in the 
Community (MA 3/95).  

The B1998 Report showed that Germany, France and Italy had recovered €52.5 million; that 
Germany and France had transferred the recovered amounts to the Commission; and that Italy 
had sent demands for payment to the debtors to prevent the debts becoming time-barred and 
had informed its judicial authorities. The amount payable would depend upon the decisions in 
the Italian prosecution. The report did not specify any particular follow-up action to be taken 
by the Commission. 

Actual situation 

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24 

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Member  States  have  communicated  24  cases  to  OWNRES  which  appear  related  to  this 
irregularity because of the CN code, the origin of goods and the Member States involved. 3 of 
these  cases  have  now  been  closed.  OWNRES  shows  only  1  closed  case  for  France  and  no 
cases  for  Germany.  This  circumstance  may  be  explained  by  the  age  of  the  MA 
communication involved. The 21 open cases were all notified by Italy. The amount still to be 
recovered is almost €48 million.  

MEMBER STATE 

AMOUNTS INVOLVED 

AMOUNTS IN 
FINALISED CASES 

AMOUNTS TO BE 
RECOVERED 

France 

Italy 

total: 

Conclusion 

€20 967

€86 651 968

€86 672 935

€20 967

€38 750 855

€38 771 822

-

€47 901 113

€47 901 113

According to OWNRES the debts have been established, but administrative appeals are still 
underway (which in Italy can be a matter of lengthy time-consuming procedures). Only 3 of 
these  cases  have  been  entered  in  the  B  account.  This  probably  indicates  that  OWNRES  has 
not been fully updated. The  Commission has asked Italy to update these records as soon as 
possible.  

3.3 

ITALIAN BANANAS  

AMOUNTS 
INVOLVED 

€5 289 594  

AMOUNTS TO BE 
RECOVERED 

€664 248  

87%

13%

Am ounts  to be
re cove re d

Am ounts  in
finalis e d cas e s

A substantial trade in bananas imported to Italy evading import duties and agricultural levies 
was discovered. In 1993 bananas from Middle and South America were unloaded in several 
harbours  in  Belgium,  Germany  and  the  Netherlands.  The  bananas  were  then  transported  to 
Italy  under  cover  of  Transit  documents,  from  where  they  were  to  be  transported  to  third 
countries.  The  bananas  however,  were  fraudulently  put  on  the  Italian  market  and  the  T1 
documents  not  discharged  (MA  72/94).  The  debtors  were  identified  and  suspects  were 
arrested. 

The  B1998  Report  noted  that  90%  of  the  duties  evaded  had  been  entered  to  the  separate 
account  (because  of  the  ongoing  administrative  appeals),  whereas  10%  had  been  recovered. 
At  the  time  the  Commission  asked  Italy  to  report  the  progress  of  the  judicial  procedures, 
because recovery was at that time suspended. Italy started enforced recovery procedures in the 
meantime.  Taking  into  account  the  complicated  character  of  the  procedures  concerned  no 
decisions or important results were expected in the short term. The report did not specify any 
particular action points requiring Commission follow-up. 

Actual situation 

OWNRES  records  from  the  Member  States  currently  show  262  cases  of  frauds  or 
irregularities involving bananas throughout the Community. A large number relate to cases in 

EN 

25 

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Belgium, Germany, the Netherlands and Italy involving bananas from Colombia, Costa Rica, 
Ecuador, Honduras and Panama. 151 of these cases were reported by Italy. 145 of these cases 
seem more likely to be related to other MA communications (MAs 36/2000 and 82/2003. 10 
cases are possibly related to the fraud described in this MA message (of which only 2 cases 
are directly linked to the  MA). Among  these  10 cases,  7 are closed  and 3  are  open with an 
amount to be recovered of approximately €700,000.  

MEMBER STATE 

AMOUNTS INVOLVED 

AMOUNTS IN 
FINALISED CASES 

AMOUNTS TO BE 
RECOVERED 

Austria 

Belgium 

Germany 

Italy 

the Netherlands 

Spain 

Conclusion 

total: 

€16 029

€30 980

€37 125

€5 177 274

€13 522

€14 664

€5 289 594

€16 029

€30 980

€37 125

€4 527 690

€13 522

-

€4 625 346

-

-

-

€649 584

-

€14 664

€664 248

Ten cases are still subject to administrative and judicial procedures while an amount of more 
than €4.5 million has now been recovered. 

3.4 

HILTON BEEF  

AMOUNTS 
INVOLVED 

€144 465  

41%

AMOUNTS TO BE 
RECOVERED 

€85 691  

Am ounts  to be
re cove re d

Am ounts  in
finalis e d cas e s

59%

Since  1980  under  the  GATT  Treaty  (General  Agreement  on  Tariffs  and  Trade)  the 
Community  has  opened an annual tariff quota for high quality beef (known  as Hilton  Beef) 
from (in particular) Argentina. This quota created an entitlement for duty-free imports. To get 
total relief from import duties a certificate of authenticity issued by the competent authorities 
in  the  exporting  country  had  to  be  presented  in  the  Community.  Following  investigation  a 
substantial  fraud  involving  certificates  for  imports  of  both  fresh  and  frozen  beef  was 
discovered because the certificates presented in the Community did not tally with those issued 
in  Argentina.  In  the  meantime  meat  had  been  imported  to  Germany,  France,  Italy,  the 
Netherlands, Spain and the United Kingdom (MA 52/93). 

The amount of unpaid duties was more than €26 million. Many debtors contested the duties 
demanded from them with national authorities. Some debtors also applied to the Community 
for  remissions  or  repayments  on  the  grounds  of  special  circumstances.  These  were  refused. 
Appeals were lodged against the refusals. The Court of First Instance gave two decisions in 
1998 holding that some irregularities at a community level had occurred with checks on the 

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26 

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application  of  the  quota  in  1991  and  199215.  These  judgments  led  to  the  cancellation  and 
withdrawal of the Commission decisions refusing remission or repayment and all the debtors 
involved  were  granted  remissions  or  repayments  as  appropriate.  A  further  such  application 
was  made  to  the  Commission  resulting  in  a  favourable  decision  which  also  authorised 
Member  States  to  make  similar  decisions  themselves  for  cases  comparable  in  fact  and  law. 
This  should  have  resulted  in  all  open  cases  being  finalised  by  the  grant  of  the  requested 
repayment or remission. 

Actual situation 

No  substantial  problems  remain  for  the  Commission  or  for  Member  States.  No  further 
requests have been made to the Commission. 25 reports referring to beef of Argentine origin 
have  been  found  in  the  OWNRES  database  but  only  2  cases  seem  to  be  related  to  this 
particular  fraud.  1  case  is  directly  linked  to  this  MA  message;  this  case  is  closed  with  the 
amount due recovered. 1 open case reports partial recovery and has an amount to be recovered 
of almost €90,000.  

MEMBER STATE 

AMOUNTS INVOLVED 

AMOUNTS IN 
FINALISED CASES 

AMOUNTS TO BE 
RECOVERED 

Italy 

Spain 

total:

Conclusion 

€39 047

€105 418

€144 465

€39 047

€19 727

€58 774

-

€85 691

€85 691

Apart  from  the  recovery,  it  is  expected  that  this  file  will  be  closed  without  any  further 
problem. Taking into account that the B1998 report did not include any specific action points 
for the Commission, this file can be archived.  

3.5 

TUNA FROM COSTA RICA  

AMOUNTS 
INVOLVED 

€2 161 667  

26%

AMOUNTS TO BE 
RECOVERED 

€ 1 594 005  

Am ounts  to be
re cove re d

Am ounts  in
finalis e d cas e s

74%

Analysis  of  the  activities  of  the  tuna  industry  in  Middle  America  showed  that  there  was  a 
great contrast between the limited capabilities of local fishing fleets and the amounts of Costa 
Rican  tuna  imported  to  the  Community.  Serious  doubts  existed  about  the  nationality  of  the 
ships which supplied the tuna to the processing industry. Research in 1996 confirmed that the 
processed tuna was not eligible to benefit from preferential treatment. Numerous certificates 
issued by the Costa Rican authorities, had however been used to import this product free of 

15 

Decision  of  the  Court  of  First  Instance of 19  February  1998  (Eyckeler &  Malt/Commission)  T  42/96 
(European  Court  reports  1998  Page  II-00401)  and  Decision  of  the  Court  of  First  Instance  of  17 
September 1998 (Primex Produkte Import-Export GmbH & Co, KG, Gebr. Kruse GmbH, Interporc Im- 
und Export GmbH/Commission) T 50/96 (European Court reports 1998 Page II-03773). 

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27 

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duty to France, Italy, Portugal, Spain and the UK. The amount at stake was estimated at €6 
million (MA 17/95). 

Because of administrative appeals all these amounts were entered to the separate accounts and 
the  Member  States  concerned  were  following-up  the  debts.  The  B1998  Report  noted  that 
substantial  amounts  had  become  time-barred;  in  particular  in  Portugal  which  should  have 
taken  action  to  protect  the  financial  interests  of  the  Community  by  preventing  the  debts 
becoming  time-barred.  The  Commission  therefore  asked  Portugal  to  make  available  the 
amount of own resources lost as a result. Portugal did not pay defending its position that it did 
not get sufficient information from the Commission to start up recovery; moreover Portugal 
pointed out that the economic operator on the one hand acted in good faith whereas the Costa 
Rican authorities had misinterpreted applicable legislation. Although, firstly, the Commission 
had  considered  taking  infringement  procedures  it  therefore  finally  considered  this  was  not 
appropriate. 

Actual situation 

At  present  OWNRES  data  provided  by  the  Member  States  shows  14  cases,  of  which  5  are 
closed. In the 9 cases remaining open the amount to be recovered is more than €1.5 million. 
Administrative appeals, reviews and procedures are still ongoing in all these cases.  

MEMBER STATE 

AMOUNTS INVOLVED 

AMOUNTS IN 
FINALISED CASES 

AMOUNTS TO BE 
RECOVERED 

France 

Italy 

Spain 

total: 

Conclusion 

€173 233

€1 677 347

€311 087

€2 161 667

€124 203

€438 327

€5 132

€567 662

€49 030

€1 239 020

€305 955

€1 594 005

When these appeals, reviews and procedures have been finalised, recovery will go ahead. 

3.6 

TEXTILES FROM LAOS  

AMOUNTS 
INVOLVED 

€3 561 498  

AMOUNTS TO BE 
RECOVERED 

€695 097  

80%

20%

Am ounts  to be
re cove re d

Am ounts  in
finalis e d cas e s

Investigation  in  1995  revealed  that  large  numbers  of  certificates  of  origin  issued  by  the 
Laotian authorities relating to consignments of textiles were either falsified or had been issued 
improperly.  The  consignments  had  been  imported  to  Austria,  Belgium,  Denmark,  Finland, 
France, Germany, Italy, the Netherlands and the UK. The amounts at stake were estimated at 
€6.3 million (MA 58/92). 

A  large  proportion  of  the  resulting  customs  debts  were  entered  into  the  separate  account 
because of appeals made by the debtors. The Commission investigated whether non-recovery 
was  caused  by  lack  of  initiative  on  the  part  of  any  Member  State.  Therefore  following  the 

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28 

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B1998  Report  the  Commission  asked  Germany  whether  an  amount  of  €187,250  had  been 
entered in the accounts. In addition, the Commission asked Belgium whether the debts which 
had  become  time-barred  did  so  before  or  after  Belgium  received  the  results  of  the 
investigation.  Shortly  after  that  report  had  been  published  Germany  confirmed  that  the 
queried  amount  had  indeed  been  accounted  for  and  that  the  amounts  recovered  had  been 
transferred to the Commission. As far as Belgium was concerned, it turned out that the debts 
in  question  had  became  time-barred  before  the  Belgian  administration  was  notified  of  the 
results  of  the  Commission's  mission  to  Laos.  These  responses  removed  the  possibility  of 
financial responsibility on the part of Member States. 

Actual situation 

Investigation of Member State information in OWNRES shows altogether 46 cases that may 
be  considered  related  to  this  particular  fraud.  34  cases  can  be  directly  linked  to  this  MA 
communication. Among these 46 cases, 37 are already closed with most of the amounts due 
recovered. 9 cases are still open; the amount recoverable is almost €700,000. Administrative 
procedures, appeals and reviews launched earlier prevent payment.  

MEMBER STATE 

AMOUNTS INVOLVED 

AMOUNTS IN 
FINALISED CASES 

AMOUNTS TO BE 
RECOVERED 

Austria 

Belgium 

Denmark 

France 

Italy 

the United Kingdom 

total: 

Conclusion 

€23 631

€36 793

€92 477

€2 531 489

€323 208

€553 900

€3 561 498

€23 631

€12 828

€92 477

€2 150 554

€292 114

€294 797

€2 866 401

-

€23 965

-

€380 935

€31 094

€259 103

€695 097

Having finalised these procedures, appeals and reviews, recovery will proceed. 

3.7 

TEXTILES FROM CAMBODIA  

AMOUNTS 
INVOLVED 

€3 080 105  

AMOUNTS TO BE 
RECOVERED 

€1 300 536  

58%

42%

Amounts to be
recovered

Amounts in
finalised cases

Investigations in several Member States revealed indications of abuse of certificates of origin 
issued  for  certain  textile  products  by  Cambodia  during  the  period  1992-1996.  Further 
investigations  in  1996  revealed  many  false  certificates  of  preferential  origin.  Many  textiles 
which  had  in  fact  been  loaded  in  Chinese  and  Vietnamese  harbours  were  imported  to  the 
Community  free  of  duty.  Moreover  it  was  established  that  many  other  certificates  had  been 
issued improperly because the garments plus the fabrics used in their production were not of 
Cambodian  origin.  The  false  certificates  and  those  improperly  issued  related  to  imports  to 

EN 

29 

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Austria,  Belgium,  Denmark,  Finland,  France,  Germany,  Greece,  Italy,  the  Netherlands, 
Portugal, Spain and the UK. The amounts at stake were estimated at €10 million (MA 82/94). 

Half  the  resulting  customs  debts  were  entered  in  the  separate  accounts  because  of  appeals 
made by the debtors. The B1998 Report did not specify any particular follow-up action to be 
taken by the Commission. 

Actual situation 

Currently  OWNRES  records  reported  by  the  Member  States  show  58  reports  of  cases 
considered  to  be  related  to  this  particular  fraud  of  which  14  are  directly  linked  to  this  MA 
message. Among these 58 cases, 40 are already closed with due amounts recovered. 18 cases 
remain  still  open  with  an  amount  to  be  recovered  of  around  €1.3  million.  The  prospect  of 
recovery  is  dependent  on  final  decisions  to  be  taken  in  the  administrative  and  judicial 
procedures as well as on administrative investigations still ongoing.  

MEMBER STATE 

AMOUNTS INVOLVED 

AMOUNTS IN 
FINALISED CASES 

AMOUNTS TO BE 
RECOVERED 

Austria 

Belgium 

Denmark 

Finland 

France 

Germany 

Italy 

the Netherlands 

Portugal 

Spain 

the United Kingdom 

total: 

Conclusion  

€224 806

€316 219

€10 033

€13 547

€611 179

€40 979

€572 892

€95 394

€12 495

€129 316

€1 053 245

€3 080 105

€224 806

€78 950

€10 033

€13 547

€611 179

€40 979

€157 276

€26 866

€12 495

€73 253

€530 185

€1 779 569

-

€237 269

-

-

-

-

€415 616

€68 528

-

€56 063

€523 060

€1 300 536

Where administrative and judicial procedures have been finalised recovery will go ahead. 

3.8 

CAR RADIOS FROM INDONESIA  

AMOUNTS 
INVOLVED 

€3 671 299  

17%

AMOUNTS TO BE 
RECOVERED 

€3 037 635  

Am ounts  to be
re cove re d

Am ounts  in
finalis e d cas e s

83%

From  1991  onwards  several  Member  States  had  requested  Indonesia  to  make  a  posteriori 
checks  of  certificates  of  origin  related  to  car  radios.  It  had  been  established  on  the  basis  of 
samples that some particular devices did not originate from there. The radios were imported to 
the  UK. 
Belgium,  Denmark,  France,  Germany,  Italy, 

the  Netherlands,  Spain  and 

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30 

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Investigations showed that the car radios could not benefit from preferential tariff treatment. 
Taking into account the origin and the value of the biggest component parts used, some of the 
car radios appeared to be of South Korean origin and therefore were subject to anti-dumping 
duties. The total amount of traditional own resources due was €6.4 million in import duties 
and  €8  million  anti-dumping  duties  (MA  16/92).  A  considerable  proportion  of  the  customs 
debts  were  entered  into  the  separate  accounts  because  of  appeals  made  by  the  debtors.  In 
addition  the  Commission  had  decided  that  Spain  had  not  taken  timely  measures  to  prevent 
prescription.  

The  B1998  Report  notes  that  the  Commission  requested  Spain  to  make  the  amount  time-
barred available. Spain paid this amount plus interest in 2001. 

Actual situation 

OWNRES  data  from  the  Member  States  shows  24  cases  which  may  be  related  to  this 
irregularity of which 16 are directly related to the MA message. Among these 24 cases, 9 are 
closed with most of the amounts recovered. 15 cases remain open. Administrative and judicial 
procedures are ongoing and the recoverable amount is around €3 million. Most of the cases 
are  reported  by  Italy.  The  reason  why  other  Member  States  appear  under-represented  in 
OWNRES may be that this concerns an old MA communication (1992), and that any resulting 
cases  were  already  closed  before  the  OWNRES  application  became  fully  operational. 
Member  States  are  however  obliged  to  register  in  OWNRES  any  old  cases  when  relevant 
changes occur (e.g. in the stage of recovery reached).  

MEMBER STATE 

AMOUNTS INVOLVED 

AMOUNTS IN 
FINALISED CASES 

AMOUNTS TO BE 
RECOVERED 

Italy 

the United Kingdom 

total:

Conclusion 

€3 483 353

€187 946

€3 671 299

€445 718

€187 946

€633 664

€3 037 635

-

€3 037 635

Recovery will go on when the administrative and judicial procedures will be finalised. 

3.9 

BICYCLES FROM VIETNAM  

AMOUNTS 
INVOLVED 

€9 201 141  

8%

AMOUNTS TO BE 
RECOVERED 

€8 462 743  

92%

Am ounts  to be
re cove re d

Am ounts  in
finalis e d cas e s

Investigations in 1995 revealed that large consignments of bicycles, imported from Vietnam 
under cover of certificates of preferential origin, did not qualify for this treatment as all the 
components  were  imported  from  China  and  Hong  Kong.  These  bicycles  were  imported  to 
Belgium, France, Germany, Ireland and the UK (MA 78/94). 

During  the  investigation  the  customs  duties  evaded  were  estimated  as  €6.8  million. 
Furthermore  because  of  the  way  the  final  assembly  was  carried  out  anti-dumping  duties  of 

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31 

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€9.7 million were also due. Almost all the debts were entered to the separate account because 
of  appeals  made  by  the  debtors.  Because  most  of  the  bicycles  were  imported  to  France, 
recovery  of  almost  the  total  amount  is  dependent  on  decisions  to  be  taken  by  the  French 
CCED (Commission de conciliation et d’expertise). Smaller amounts have been recovered in 
Belgium, Germany and Ireland. 

The B1998 Report did not include any specific action points for the Commission. 

Actual situation 

OWNRES  records  based  on  Member  State  communications  currently  show  10  cases 
concerning irregular bicycle imports from Vietnam. 9 of these cases can be linked directly to 
this  MA  communication  (the  other  case  is  already  closed  because  recovery  was  fully 
completed).  8  of  these  cases  are  French,  which  fits  in  with  expectations  from  the  outset.  5 
cases  remain  open  while  4  cases  have  been  closed  in  the  meantime.  The  amount  still  to  be 
recovered 
suspended  until  administrative 
reviews/procedures have been finalised.  

is  almost  €8.5  million.  Recovery 

is 

MEMBER STATE 

AMOUNTS INVOLVED 

AMOUNTS IN 
FINALISED CASES 

AMOUNTS TO BE 
RECOVERED 

Belgium 

France 

Conclusion 

total:

€31 538

€9 169 603

€9 201 141

€31 538

€706 860

€738 398

-

€8 462 743

€8 462 743

After finalising the administrative reviews and procedures, recovery will proceed. 

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32 

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ANNEX 4 

Table on follow-up of recovery in 17 files of fraud or irregularity (in Euros) 

CASES 

AMOUNTS  

AMOUNTS 

OF FRAUD OR IRREGULARITY 

IN OPEN CASES  

IN FINALISED CASES  

TO BE RECOVERED  

RECOVERED, 
CANCELLED, WRITTEN-
OFF 

€  

€ 

Jeans and T-shirts from USA (MA 96/94) 

2 970 373 

Milk powder and butter from third countries 
(MA 64/95) 

Cars from Hungary (MA 57/96) 

Shrimps from Honduras (MA 27/97) 

Shrimps from Iceland (MA 2/97) 

Persulphate from China (MA 11/2000) 

Shoes from Cambodia (MA 56/99) 

Silicon from Australia (MA 42/98) 

Spanish sugar (MA 53/93) 

15 616 882 

6 357 159 

951 102 

0 

2 026 171 

1 137 260 

91 099 

2 450 060 

1 735 819 

369 495 

8 372 605 

465 719 

324 951 

2 065 361 

299 017 

361 064 

2 321 507 

Cheese from Switzerland (MA 3/95) 

47 901 113 

38 771 822 

Italian bananas (MA 72/94) 

Hilton beef (MA 52/93) 

Tuna from Costa Rica (MA 17/95) 

Textiles from Laos (MA 58/92) 

Textiles from Cambodia (MA 82/94) 

Car radios from Indonesia (MA 16/92) 

Bicycles from Vietnam (MA78/94) 

664 248 

85 691 

1 594 005 

695 097 

1 300 536 

3 037 635 

8 462 743 

4 625 346 

58 774 

567 662 

2 866 401 

1 779 569 

633 664 

738 398 

TOTAL = €161 698 348 

95 341 174 

66 357 174 

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ANNEX 5 

Table on follow-up of recovery in 17 files of fraud or irregularity (in percentages) 

CASES  

AMOUNTS  

AMOUNTS  

OF FRAUD OR IRREGULARITY 

IN OPEN CASES 

IN FINALISED CASES  

TO BE RECOVERED 

RECOVERED, 
CANCELLED, WRITTEN-
OFF 

Jeans and T-shirts from USA (MA 96/94) 

Milk powder and butter from third countries 
(MA 64/95) 

Cars from Hungary (MA 57/96) 

Shrimps from Honduras (MA 27/97) 

Shrimps from Iceland (MA 2/97) 

Persulphate from China (MA 11/2000) 

Shoes from Cambodia (MA 56/99) 

Silicon from Australia (MA 42/98) 

Spanish sugar (MA 53/93) 

Cheese from Switzerland (MA 3/95) 

Italian bananas (MA 72/94) 

Hilton beef (MA 52/93) 

Tuna from Costa Rica (MA 17/95) 

Textiles from Laos (MA 58/92) 

Textiles from Cambodia (MA 82/94) 

Car radios from Indonesia (MA 16/92) 

Bicycles from Vietnam (MA 78/94) 

ALL CASES 

% 

63 

98 

43 

67 

0 

50 

79 

20 

51 

55 

13 

59 

74 

20 

42 

83 

92 

59 

% 

37 

2 

57 

33 

100 

50 

21 

80 

49 

45 

87 

41 

26 

80 

58 

17 

8 

41 

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ANNEX 6 

Table of effectively recovered amounts in closed cases 

AMOUNTS IN FINALISED CASES  

OF FRAUD OR IRREGULARITY 

AMOUNTS 
RECOVERED 

€ 

AMOUNTS NOT 
RECOVERED 
CANCELLED, 
CORRECTED, 
ANNULLED, WRITTEN-
OFF 

€ 

Jeans and T-shirts from USA (MA 96/94) 

Milk powder and butter from third countries 
(MA 64/95) 

1 709 266 

350 432 

26 553 

19 063 

Cars from Hungary (MA 57/96) 

6 337 681 

2 034 924 

Shrimps from Honduras (MA 27/97) 

Shrimps from Iceland (MA 2/97) 

Persulphate from China (MA 11/2000) 

Shoes from Cambodia (MA 56/99) 

Silicon from Australia (MA 42/98) 

Spanish sugar (MA 53/93) 

465 719 

324 951 

1 443 575 

270 699 

361 064 

2 321 507 

0 

0 

621 786 

28 318 

0 

0 

Cheese from Switzerland (MA 3/95) 

179 701 

38 592 121 

Italian bananas (MA 72/94) 

Hilton beef (MA 52/93) 

Tuna from Costa Rica (MA 17/95) 

Textiles from Laos (MA 58/92) 

Textiles from Cambodia (MA 82/94) 

Car radios from Indonesia (MA 16/92) 

Bicycles from Vietnam (MA 78/94) 

4 562 947 

58 774 

24 623 

2 708 960 

1 779 569 

270 799 

738 398 

62 399 

0 

543 039 

157 441 

0 

362 865 

0 

TOTAL = €66 357 174 

23 908 665 

42 448 509 

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