A suspected EUR165m fraud has been disrupted during a joint UK and German operation against VAT carousel fraud. Codenamed 'Operation Sunrise', mixed teams of UK and German customs officers were deployed on the Swiss - German border and at Frankfurt airport to gather intelligence about the movement of goods into the European Union.
Over 30,000 mobile telephones were scanned by Detection officers from HM Revenue & Customs (HMRC) and German Customs Investigation Zollkriminalamt (ZKA) during Operation Sunrise and input into HMRC's 'Nemesis' database. The operation was devised to capture data about mobile telephones and their movement into the EU from third countries. Telephone serial numbers are recorded and compared with others on the database in order to uncover and provide evidence of carousel transactions. To date, more than 1.6 million unique identifier numbers have been recorded.
Operation Sunrise was the first of its kind. Activity focussed on the Swiss German border, as this is a common route used to reintroduce goods previously involved in fraud and exported to a third country back into the European Union to be used in further frauds.
Data suggests that in 2005 mobile telephones to the value of EUR2.1bn were imported into Germany from Switzerland, despite there being no manufacture of mobile telephones there, and no obvious commercial reason for such trade.
Missing Trader Intra-Community (MTIC) VAT fraud is an organised criminal attack on the VAT system, which is estimated to have cost the UK exchequer between 1.1bn and 1.9bn in stolen VAT revenues in 2004-05. In its simplest form this type of fraud involves obtaining a VAT registration number in the UK for the purposes of purchasing goods free from VAT in another EU Member State, selling them at a VAT-inclusive purchase price in the UK and then going missing or defaulting without paying the VAT due to HMRC. A more abusive form of the fraud - known as carousel fraud - involves the same goods being traded around contrived supply chains within and beyond the EU, re-entering the UK on a number of occasions with the VAT being stolen each time. The goods most commonly associated with this fraud are mobile phones and computer chips. The organised criminal networks behind these frauds are well resourced, innovative, resilient and known to be involved in wider criminality.
[Good news for those who believe nation state governments to be anything but another lot of mafias... --Ed].
Related links: (Open in a new window.)
www.hmrc.gov.uk
Taken from Information Security Bulletin.