OLAF /07/01 Brussels, 30 January 2007
A scheme of illegal trade in cigarette lighters from Asia, with a financial impact for the European Community budget of at least 20 Million Euros in evaded duties, has been detected by the European Anti-Fraud Office (OLAF) in co-operation with its partners in the EC Member States. OLAF and the national authorities are currently investigating several cases of illegal imports of non-refillable lighters of Chinese origin, falsely declared as originating in Indonesia or Malaysia. The joint investigations have revealed that Malaysia alone was used for transhipments of more than 300 million lighters from China during the past four years. If these cases had not been detected the cost to the Community budget, which will now be recovered from the importers, would have been borne by the Community taxpayers.
The total consumption of non-refillable lighters in the EU is estimated at 1 billion per year, at consumer prices ranging from 50 cents upwards. Imports of non-refillable lighters from China to the EU are liable to an Anti-Dumping Duty of 6.5 cents per lighter. Investigating cases of evasion of Anti-Dumping Duties is part OLAF’s task in the fight against fraud affecting the EU budget and in protecting the Community taxpayer.
OLAF, together with its national partner services in the Member States, has detected several cases where Indonesia or Malaysia was fraudulently declared as the country of origin of the imported lighters. The investigation of these cases will lead to the recovery of duties and the potential criminal investigation by the national authorities of offenders in the Member States concerned, namely the UK, Czech Republic, Lithuania, Italy, Spain and Germany. In the framework of its investigations, OLAF has also worked closely with the industry producing lighters in the EC.
The investigation of the imports of lighters falsely declared as of Malaysian origin has been the most spectacular so far: The joint verification conducted by OLAF in Malaysia, together with the customs authorities of Germany, UK, Italy and the Czech Republic and with the support of the competent national Malaysian authorities, revealed that in the past four years more than 300 million flint-operated lighters from China have passed through Malaysia. They were solely transhipped in order to disguise the true Chinese origin of the goods.
It has been established that the Malaysian company which claimed to have produced the lighters merely provided cover for the transhipped goods. Hundreds of container loads of Chinese lighters were switched in the commercial free-zones in Port Klang, Penang and Johor Bahru. By providing false information to the local authorities the parties involved succeeded in obtaining certificates of Malaysian origin in order to bypass the anti-dumping measures.
For this case alone OLAF and its partners investigated more than 300 containers which had been transhipped in this way. One container carries around one million lighters resulting in a revenue loss of 65,000 Euros per container
There was a further joint verification mission conducted in Indonesia in late November 2006 with the full support and cooperation of the Indonesian national authorities into the alleged production there of flint-operated lighters exported to the European Community. On that occasion it had been jointly established by both parties that more than 100 consignments under investigation did not originate in Indonesia. Further investigations into the true origin of the goods are foreseen for the near future. All the containers of Chinese lighters had been routed via Hong Kong and were switched in Singapore, which is frequently used by fraudulent operators as a hub for this kind of activity.