OLAF /06/16 Brussels, 10 October 2006
At least 60 Million Euros is the estimated financial damage caused to the EU-taxpayer, and this is merely that caused by those cases of Chinese garlic smuggling that are currently being investigated by the European Anti-Fraud Office (OLAF). Indeed, among all OLAF investigations into illegal trading with agricultural products with third countries, cases involving Chinese garlic alone ranks third in degree of incidence (with 17 cases), ranked just behind sugar (21 cases) and meat (20 cases) from the rest of the world. OLAF’s experiences in the fight against garlic smuggling was one of the topics discussed today at a five-day international customs seminar that is hosted by the Austrian Ministry of Finance and OLAF in Pörtschach, Austria, and is being attended by participants from 32 European countries.
Import of fresh Chinese garlic to the EU is subject to the payment of a 9, 6 % ad valorem duty and of a specific amount of 1200 Euros per ton net weight. This specific amount is not applicable for import within an annual quota of 13,000 tons. Furthermore, in the framework of preferential trade arrangements, fresh garlic can be imported duty free and without quantitative restrictions, on condition the goods are originating in those countries for which the EU provides preferential treatment. As the production capacity for garlic in China is very high and production costs are low, the illegal import of fresh garlic under evasion of the levy is an attractive business for smugglers: for example, one single container carries an average of 20 tons of garlic and if this is smuggled successfully this can result in 24,000 Euros of illegal benefit if the import duties are evaded.
Garlic smugglers use different methods to illegally introduce their merchandise into the EU, their main aim being to conceal the fact that China is the product’s real country of origin. The methods used to date include the following:
The garlic is transhipped through a third
country and reloaded into new containers
in order to make this country appear to
be the country of origin. In OLAF investigations
countries like Jordan, Russia, Serbia/Montenegro,
Turkey, the Dominican Republic, Egypt,
Bulgaria, Thailand, the Philippines and
Myanmar have been found to be used for
• Certificates of origin are simply falsified, without the garlic ever having passed through its purported country of origin, or are unduly issued by the local authorities, on the basis of misleading information.
• Fresh garlic is also being misdeclared to the customs authorities as dried or frozen garlic for which far lower customs duties apply.
• Common garlic is being misdeclared as elephant garlic (one clove only), the latter not being subject to specific import restrictions.
New intelligence tools
As well as using traditional investigative methods and in addition to the close co-operation with national customs services, OLAF has carried out an extensive analysis of all trade flows of Chinese garlic worldwide. This has allowed OLAF to develop new intelligence tools for a more efficient fight against this and other similar kinds of illegal trade.
This fight goes on in close co-operation with the Member States and third countries concerned and, in the framework of mutual assistance agreements in customs matters, OLAF is continuing to carry out investigations into this illegal trade. Several of these investigations have already led to administrative and criminal proceedings. Also in this regard and on OLAF’s initiative, in August 2005, the European Commission published a notice to importers in which Community operators are advised to take all necessary precautions against this kind of fraud. It is the first Notice to importers [62 KB] where the scope of the origin of a product is not limited to a single third country but covers all relevant imports into the EU.
OLAF video stock shots on garlic investigation in Bulgaria
has produced video stock shots on its co-operation
with the Bulgarian authorities in the matter
of the fight against the illegal trade
with Chinese garlic. The stock shots are
available for download from the European
Commission’s Audiovisual Service.