BREAKING: 4,000 Batches of Chinese Goods Seized! Case Value Exceeds 1.1 Billion Yuan!

According to current preliminary estimates, the case involves evaded customs duties and value-added tax, and the amount is approximately astonishing.137.4 million euros (approximately RMB 1.1 billion)!

According to the EPPO report, the investigation was carried out by the Criminal Office of the Slovak Financial Authority, and the operation was code-named "Podlimit". A total of nine Czech companies were involved - they were accused of "exploiting loopholes in Customs Procedure 42 (CP42) to smuggle large quantities of goods from China to Slovakia and the Czech Republic."

Customs Procedure 42 (CP42) is also what we often call the EU tax deferral mechanism - if goods imported into an EU member state will be shipped to another EU member state, you can use this procedure to defer the payment of import value-added tax (VAT).

Specifically, this back-examination was related to the freight shipments of these companies from June 2017 to December 2018, involving a total of 4,000 shipments.

EPPO said the companies issued false Single Administrative Documents (SADs) to facilitate the import of Chinese textiles, footwear and e-commerce products into the EU through multiple entry points, including ports in Germany, Poland and Slovenia.

The investigation results showed that the relevant goods were packed in containers and transported to Slovakia by truck, and were allowed to circulate freely after declaration and clearance in Slovakia. However, in fact, they were not shipped to the declared destination in the Czech Republic. Instead, they were allegedly redirected to other undisclosed locations under the instructions of the Czech company.

The EPPO currently suspects that many of the reported transactions actually only exist on paper and that these goods end up on the black market without paying VAT in the country of actual delivery.

At the same time, the EPPO mentioned that the scheme also appeared to involve systematically undervaluing imported goods to reduce tariffs, as well as submitting false information to the Slovak customs authorities about the final destination of the goods, and submitting false declarations to the Czech tax authorities regarding intra-EU purchases and supplies.

Moreover, these actions were supported by forged contracts! These contracts show goods being delivered to entities in Slovakia or other countries other than the declared destination!

At present, the investigation of this case is still ongoing. According to EPPO estimates, these practices have caused at least 137.4 million euros in customs duties VAT losses, including 24.1 million euros in customs duties, and a total of more than 113.3 million euros in unpaid VAT for nearly 4,000 shipments.

Last month, the European Prosecutor's Office (EPPO) also launched a large-scale back-investigation operation against goods imported from China. This time, it targeted a batch of Chinese aluminum materials imported to the EU. Preliminary verification showed that the amount of tax evasion alone was as high as 1.6 million euros, equivalent to about 12.7 million yuan in RMB.

According to the official notification released by EPPO on March 17, this investigation focused on suspected illegal smuggling and tax evasion of aluminum imported from China to the EU. The law enforcement actions covered five German federal states - Bavaria, Baden-Württemberg, Hesse, Saxony-Anhalt and Saxony. It can be called a highly targeted and precise investigation.

It is reported that the joint customs investigation bureaus of Dresden, Berlin/Brandenburg and Mainz conducted a total of 17 search operations, comprehensively collected evidence involved, and gradually restored the complete chain of this cross-border tax evasion fraud.

This special operation, codenamed "Black Forest," revealed a well-planned tax evasion scam: In order to avoid the anti-dumping and countervailing duties imposed by the European Union on Chinese aluminum products, a Swiss company deliberately adopted illegal operations - using wrong tariff codes to declare goods, and at the same time submitting false invoices, deliberately underestimating the actual value of imported aluminum materials, in order to achieve the purpose of evading tariffs and evading taxes.

So far, the investigation has made it clear that from 2021 to 2023, this fraud has caused a cumulative tax loss of approximately 1.6 million euros to the EU. The relevant persons involved have been arrested. However, before the German court makes the final ruling, all persons involved have not been convicted and the case is still under further review.

In recent years, the EU has launched many special operations to combat such fraud. For example, in the "Operation Calypso" in 2025, 2,435 containers suspected of smuggling and tax evasion were seized in the Greek port of Piraeus alone, including a large number of Chinese export goods. It can be seen that the EU attaches great importance to cross-border trade compliance and has reached unprecedented heights.

EU customs supervision is no longer just a formality.Back-checking, traceability, and full-chain accountability will become the norm. Those who try to reduce costs and avoid tariffs through illegal operations will eventually pay a price - not only will they face huge fines, goods may be seized, but the company will also be included in the EU blacklist, affecting all subsequent import and export business.

Finally, it is recommended that all European cargo owners and freight forwarders pay attention to the latest EU regulatory policies in a timely manner, standardize the declaration process, and maintain the bottom line of compliance. After all, in an increasingly stringent regulatory environment, only by being compliant can we go further.