The EU budget is largely financed from three sources of revenue, known as ”own resources”:
As these three sources account for around 98% of the EU budget, protecting them from fraud is vital. OLAF plays an important role on behalf of the EU, combating one of the most common types, customs fraud – firms evading customs duties, including anti-dumping duties.
Customs duties are based on the origin and value of the goods and their classification (the customs tariff to be applied). Falsifying any of these factors when importing or exporting products is fraud. This includes:
- falsely declaring the origin of the goods
- declaring a lower value on the goods (‘undervaluing’)
- misclassifying the goods (incorrect commodity code/’CN code’)
- smuggling goods (i.e. import/export without a customs declaration).
To ensure that EU customs rules are applied correctly, the EU and national customs authorities work together closely and share information.
Cooperation between customs authorities
The cross-border nature of customs fraud requires national authorities to work together to prevent, investigate and prosecute breaches of customs legislation. In the EU context, this is called ‘mutual assistance’.
The rules for how this cooperation should take place are set out in Regulation 515/97 (currently under evaluation). There is a particular emphasis on sharing information, including on suspicious:
- people and their movements
- places where goods are stored
- movements of goods
- means of transport.
Other forms of cooperation include:
- administrative investigations – an authority in one Member State can request assistance from their counterparts in another
- spontaneous information sharing – authorities share relevant information among themselves whenever they see a need
- cooperation with the Commission (OLAF) – where the case has an EU dimension
- Joint Customs Operations (JCOs) – national authorities and OLAF carry out specific checks for a limited period to combat fraud in certain high-risk areas.
All of the above is supplemented by Regulation 1525/2015, which:
- sets deadlines for national authorities to provide documents required for an investigation (to help speed up OLAF investigations)
- makes it easier to use information obtained under these cooperation arrangements as evidence in national court proceedings.
Information sharing tools
To detect and investigate customs fraud at national and EU level, national authorities and OLAF investigators use databases and IT tools to collect and quickly share data.
A number of these have been created under Regulation 515/97, including a range of databases accessible through the Anti-Fraud Information System (a platform for secure exchanges between authorities):
- CIS – tracks goods moving in and out of the EU
- FIDE – helps authorities find the relevant foreign counterpart for a case
- CSM – tracks containers entering and leaving the EU
- IET – data on goods entering, leaving and transiting the EU
CIS – Customs Information System
CIS is a secure central database accessible by national customs authorities and OLAF. It enables them to share data on goods moving in and out of the EU.
It also contains information on suspected or established infringements and customs fraud, including customs investigations, as well as requests for specific action to be taken.
The data in the system can concern:
- means of transport
- fraud trends
- availability of expertise
- goods detained, seized or confiscated
- cash detained, seized or confiscated.
For more on the types of data and operations that can be entered into the system, see Regulation 515/97, Regulation 2016/757 and Regulation 2016/346.
FIDE – File Identification Database
When investigating individuals and businesses, OLAF and national authorities can use FIDE to identify authorities in other EU countries that are investigating or have investigated those same cases.
CSM – Container status messages
CSM contains information on the movements of containers entering or leaving the EU, in the form of messages provided by maritime carriers. For containers leaving the EU, the data only covers excise goods (tobacco, alcohol, energy products, etc.).
Details of when carriers have to send a CSM, in which format and how (the transmission method) are set out in Regulation 2016/345.
IET – Import, export and transit
The IET databases gather data on goods entering, leaving and transiting the EU (for exports, data is collected only on excise goods, such as tobacco, alcohol and energy products).
Customs officials and OLAF analysts can cross-check the information from the IET with the CSM (and vice versa), to better track and trace suspicious shipments and detect customs fraud.
The Commission, together with its Joint Research Centre, has developed other analytical tools to monitor and identify suspicious activities in customs, and is currently developing a project on customs data analysis. This will help national authorities:
- make best use of the data and data sources at their disposal
- strengthen their analytical capacities in fighting customs fraud.
The objective is to build a community of experts in the field among the Commission and EU countries, improve collaboration by all those involved and ultimately make the fight against custom fraud more effective.
To go beyond:
EU customs investigators get new, powerful tools to combat fraud
A container’s journey to the EU – new customs tools to fight fraud
Commission’s annual report on the protection of EU’s financial interests