Belgium – EPPO arrests two suspects in €3,1 million biodiesel fraud investigation.
The European Public Prosecutor’s Office (EPPO) in Brussels (Belgium) has arrested two suspects in connection with an investigation into a customs fraud involving biodiesel imports, with an estimated damage of €3.1 million.
The two suspects, who have dual citizenship (Bosnia and the USA), were arrested last month, during the course of a trial at the Court of Antwerp, where they were being tried in a separate case, carried out by Belgium’s national prosecutor, which also involved a biodiesel scam.
Following their arrest, two other individuals, who were working as their lawyers, allegedly attempted to move and hide potentially incriminating evidence for their clients, and were in turn also arrested. They were later released under certain conditions.
The suspects had been on the radar of the EPPO for its investigation into a criminal organisation that fraudulently imported biodiesel of US origin into the EU, which has led to their arrest, carried out by Belgium’s Federal Police (CDGEFID/OCDEFO). They remain under electronic surveillance.
As the main suspects are US citizens with assets located in the USA, the EPPO is committed to obtaining cooperation from the relevant US authorities in order to seize the assets and recover the estimated damage to the EU budget.
Complex biodiesel scam
The facts under investigation were first reported to the EPPO by the European Anti-Fraud Office (OLAF) and Belgium’s General Administration of Customs and Excise (AAD&A/AGD&A).
The two suspects are understood to be the ringleaders of a criminal organisation that imported biodiesel of US origin into the EU, while fraudulently declaring its origin as Morocco. Both are also the subject of other EPPO ongoing investigations involving possible biodiesel frauds.
The importation of biodiesel produced in the US is subject to EU anti-dumping duties, as the production is subsidised and cheaper than biodiesel originating in other non-EU countries. Biodiesel originating from the US is usually produced using Soy Methyl Ester (SME), which is generally cheaper. The imports under investigation were most probably produced from SME, and not Used Cooking Oil Methyl Ester (UCOME) – which is considered better for the environment –, as was declared.
According to the investigation, to avoid the application of the antidumping duties, the biofuel exported from the US transited via non-EU countries (including Costa Rica and Morocco), where it was imported as UCOME, temporarily stored and allegedly transformed into biodiesel. The legal origin of the product may change if the initial product is subject to a sufficient transformation process, usually changing the nature of the product itself – which, based on the evidence, was not the case.
In addition to avoiding the anti-dumping duties, the biodiesel was imported at a preferential import duty rate of 0{c431b1036349617aea55b35aa92592c3cb3fecc7f94273a754a3b674e9a603ce}, resulting from the preferential tariff the EU applies to goods originating from Morocco.
The EPPO is the independent public prosecution office of the European Union. It is responsible for investigating, prosecuting and bringing to judgement crimes against the financial interests of the EU.
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Belgium – EPPO arrests two suspects in €3,1 million biodiesel fraud investigation. source