EU’s ‘anti-dumping police’ cracks down on fraudulent importers

The European Antifraud Office (OLAF) has set out how it is tackling the imports of metal products which are systematically being given incorrect codes by importers to avoid anti-dumping duties.

OLAF’s annual report tells of ‘an ongoing cooperation’ with the European steel association (Eurofer), the European bicycles industry and the EU aluminium household foil industry to protect their industries.

‘For several years now, OLAF has carried out investigations regarding the evasion of anti-dumping and countervailing duties applicable on imports of aluminium household foil originating from China.’ Inquiries of several Thai companies in late 2022 confirmed insufficient production of foil in Thailand to justify Thai origin being attached to the products. The mis-identification was to avoid the payment of the duties for such goods almost certainly originating from China.

A similar situation concerned the import of stainless steel pipes claimed to originate from South Korea. ‘This matter has been subjected to consecutive investigations by [OLAF] whereby, in cooperation with the Korean Customs Services, it was established that the goods could not be considered of Korean origin, as they did not undergo any substantial processing in South Korea.’ Again, if they came from China they would have accrued duties.

Inferior steel

In the third case, sources tipped off OLAF in 2019 about a suspicious consignment of steel on its way to an EU port. OLAF alerted the relevant custom authorities who confirmed the steel was of an inferior quality than that declared on the import documents and was therefore meant to attract 73.3% anti-dumping duties.
The report goes on: ‘The import document also stated that the steel was coated in a paint that prevented rust and corrosion. However, following chemical analysis, this declaration turned out not to be true as only a simple layer of varnish had been applied to the steel.’

Further investigation found that the importing company had carried out similar frauds across the EU. ‘OLAF shared this information with relevant authorities in other Member States, which helped facilitate further investigations into the company and led to the discovery of a series of prior similar suspected fraudulent activities carried out by this company across the EU.’
OLAF concluded that the suspected company was involved in a possible active conspiracy with the aim of evading taxes for nearly EUR 6.5 million. The matter is now being considered by the European Public Prosecutor’s Office (EPPO).

Level playing field

According to data from Eurofer, China was the main source of imports for heavy plate accounting for 1.3 million tonnes in 2015, almost 50% of total EU imports. Anti-dumping duties of up to 73.7% subsequently levelled the playing field. Others have filled the gap with South Korea, Indonesia, India, Japan, and Turkey accounting for 1.2 million tonnes in 2022, a 500% increase in their exports to the EU since 2015.

EUROFER has welcomed the agency’s activities. ‘It is of utmost importance that these fraudulent practices are investigated and penalised to enforce trade defence measures and achieve a level playing field,’ says dg Axel Eggert. ‘We will keep cooperating with OLAF, the EPPO, and all European institutions to avoid any form of fraud and circumvention of EU law.’