Carousel fraud fails to harm latest trade data

CAROUSEL fraud, currently under investigation in Britain, has had no impact on recent Irish trade statistics, a spokesman for the Revenue Commissioners said.

At its peak British fraudsters shipped computer equipment and mobile phones through Ireland to scam VAT off British authorities.

The amount of goods washed through the Irish economy was up to €5.5 billion over the period 2002 to 2003.

Our trade figures were distorted by that amount over the period, but close monitoring has virtually put an end to that practice, the spokesman said.

Since then, the Revenue authorities across Europe have set up an operation to counter this kind of activity.

Revenue is well aware of this type of fraudulent activity and is actively tackling the problem in conjunction with its EU counterparts, said a Revenue spokesman.

“We have established a VAT Carrousel Fraud Unit within our Investigation & Prosecution Division. Since 2000 over 35 investigations have been carried out mainly in collaboration with the British authorities, but also with other Revenue authorities,” he said.

He confirmed a number of instances of carousel trading in this country were uncovered in the mid 1990s.

The amounts involved were not significant and “we have no indication of carousel fraud being used currently to obtain VAT refunds in this country”, he said.

So-called “carousel fraud” involves the consignment of goods, typically computer processing units or mobile phones, through a chain of companies in two or more EU countries.

The sole purpose of this was to defraud the Revenue authorities of the VAT payable on the goods in the country of eventual destination.

The British Office for National Statistics is currently investigating a series of frauds in this category.

Its suspicions were aroused when trade statistics for EU and non-EU countries began to look distorted in recent months.

The suspicion is that criminals may be pocketing VAT on goods bought in the EU but then sold in countries outside the Union.