Anti-smuggling activities in the customs sector and countering fraud in the excise sector

The fight against smuggling and transnational trafficking is one of the historically strategic sectors of the Guardia di Finanza's institutional mission. The control of the flow of goods entering and leaving the customs territory of the European Union is of fundamental importance not only to combat the evasion of duties and taxes, but also to prevent criminal organisations from carrying out other illegal conduct (counterfeiting, product safety, money laundering, currency) that is detrimental to the proper functioning of the market for goods, services and capital or that affects the security of the European Union (arms, drugs, terrorism).

To this end, the Guardia di Finanza guards the entry points of the European Union (ports, airports, land and maritime borders) and implements a capillary economic control of the territory aimed at preventing and repressing any conduct that could threaten the economic-financial security of the Country and of the European Union.

The Corps, as Customs Authorities under the Union Customs Code, carries out this activity both within the customs areas, where dog units and technological investigation instruments (endoscopes and scanners) are used, and outside of these areas, through a posteriori controls based on targeted risk analysis and anti-smuggling services, also in the sector of foreign processed tobaccos, which avail themselves of the integration of the land apparatus with the air-sea component of the Corps.

The action of the Corp, in the most complex and structured cases, is developed through investigations of the Investigative Police, indispensable to identify the criminal organizations involved and to strike at the level of assets. In this context, the traditional investigative techniques are flanked by means of investigation which allow the acquisition, always more easily, of important probative elements abroad.

To this end, given the trans-national connotation of the offences in question, recourse is made, more and more often, to the joint investigative teams, a Union instrument which allows the military of the Guardia di Finanza to intervene, outside of the national borders, together with the police forces of the host Member State, to directly acquire information and useful sources of evidence, as well as the participation in the international operations promoted and coordinated by EUROPOL, OLAF, WCO and INTERPOL.

Customs controls on the correct observance of the provisions provided for by the Convention on International Trade in Endangered Species of Wild Fauna and Flora (so-called CITES Convention), attributed to the Guardia di Finanza by Legislative Decree no. 177 of 19 August 2016, are also of particular relevance in this sector.

Another operational priority for the Corps is the activity carried out to combat the illicit trafficking of alcoholic and petroleum products. In a context, such as the current one, which has been profoundly modified by the effects of the pandemic, evasive conduct, which is made highly profitable by the high tax incidence on the final price of the products, causes very serious damage both to state revenues and to honest entrepreneurs who are faced with unfair competition that is difficult to sustain.

In particular, the fuel market has for years been the target of VAT and excise duty evasion which, in addition to damaging tax revenues, has the effect of distorting competition, which is all the more pronounced in the current economic crisis.

Such conduct is often attributable to the structured 'direction' of organised crime, which considers the fuel trade an attractive location for the reinvestment of illicit capital.

The investigations of the Guardia di Finanza are primarily oriented towards countering the most widespread fraud phenomena, including transnational trafficking in lubricating oils and solvents (so-called designer fuels) illegally introduced into the country to be used as fuel in evasion of tax.

The same commitment is reserved for the illicit marketing of exempted or subsidized products, for which the tax evasion is perpetrated by diverting the goods from the declared use in agriculture/fishing to other uses excluded from the tax benefit, as well as the movements under suspension of tax of alcoholic products of EU origin, formally intended for domestic or export but, in reality, diverted to countries with higher tax rates for marketing in tax evasion.

Particular attention is dedicated to the controls on the road circulation of the products subject to excise duty and on the retail distribution of energy products, through interventions at the road distribution plants, to verify the effective quantity of fuel distributed, the quality of the products released for consumption and the respect of the obligations of correct and transparent information on the prices practiced for the protection of the consumers.

The Corp has recently reinforced the anti-fraud control through the constitution at the General Command of a specialized unit, called "Tax Fraud Enforcement Unit", with the task of carrying out activities of operative and contextual analysis, as well as coordinating the actions of control, favouring the circularity of information between the Units.

The action of the Units is carried out by exploiting also the international cooperation, as well as the instruments of prevention and counteraction recently introduced by the legislator, such as:

• the computerized system LUB, for the control of lubricating oils of foreign origin moved within the national territory;
  
• the simplified electronic accompanying document (e-DAS), to monitor the movement of fuels subject to excise duty in the national territory;
  
• compulsory confiscation, including for equivalent amounts, to more effectively attack the wealth illegally accumulated by economic crime, including organised crime.
  

The Corps also participates in the Policy Cycle (EMPACT), as the national contact for the projects promoted by the Council of the European Union aimed at combating fraud in the energy products, alcohol products and manufactured tobacco sector, also through the conduct of joint international operations within the European Union.