Authorities in Slovakia have carried out searches as part of Operation Pantastic, an investigation led by the European Public Prosecutor’s Office (EPPO) in Bratislava into suspected customs fraud involving textile and footwear imports from China. Investigators are also examining the possible involvement of public officials. The searches targeted import companies, customs representatives and transport companies across Slovakia. EPPO questioned five customs officers, and at least 50 suspects are currently under investigation.
Key Findings During Investigation
EPPO is investigating an organised criminal group suspected of using Customs Procedure 42 (CP42) to commit customs and VAT fraud involving large quantities of textiles and footwear imported from China into the EU. CP42 allows goods to be imported into one EU country without paying import VAT there, provided they are subsequently transported to another EU country, where the applicable VAT must be accounted for.
The suspected scheme allegedly operated between January 2016 and December 2019 and involved importing companies, carriers and customs representatives. According to the investigation, the participants allegedly issued at least 3,681 fraudulent Single Administrative Documents (SADs) to facilitate imports through several EU entry points, including ports in Germany and Slovenia.
According to EPPO, the suspects transported the goods to customs offices in Nitra and Trnava, Slovakia, where they cleared and released them for free circulation. The suspects allegedly declared that the goods were destined for Czechia, Poland, and the UK to benefit from the VAT exemption under CP42.
However, they allegedly knew that the goods would instead be delivered to other operators in EU countries without VAT being paid in the countries where the goods were actually received. The scheme also involved the systematic undervaluation of imported goods to reduce customs duties.
The investigation estimates that the alleged fraud resulted in at least EUR 44.3 million in evaded customs duties and more than EUR 190 million in unpaid VAT. It also uncovered suspected corruption involving customs officials, financial administration employees, and law enforcement officers, who allegedly accepted bribes in exchange for facilitating the release of undervalued goods based on falsified documents. The total value of the alleged bribes is estimated at EUR 12 million.
Conclusion
Operation Pantastic underscores the challenges facing the EU in safeguarding its financial system against sophisticated cross-border fraud. The scale of the scheme highlights how systemic vulnerabilities in customs mechanisms like CP42 can be exploited. Coupled with the alleged involvement of corrupt public officials accepting millions in bribes, this investigation demonstrates the essential role of the EPPO in dismantling high-level criminal networks, protecting the EU budget, and maintaining integrity across the EU.
