Germany lost (at least) 850 millions in the VAT Fraud ! This is far more than the 200 millions precedently cited…
The 5 billion counter should now be closer to 10 or 15 billions… Who are the happy thieves of this
Wall Street Journal – EUROPE NEWS – MARCH 7, 2011, 2:03 P.M. ET – By JAN HROMADKO
FRANKFURT—Prosecutors confirmed Monday that value-added-tax fraud in the trade of carbon-dioxide emissions has deprived the German state of about €850 million ($1.19 billion).
In its probe into the VAT fraud the Frankfurt-based attorney-general’s office is investigating around 120 organizations and companies in Europe and the United Arab Emirates, senior public prosecutor Alexander Badle said in an email Monday.
The prosecutor’s comments confirmed a report in the Saturday edition of Sueddeutsche Zeitung.
The investigation is related to evidence for massive damages for European Union members that first emerged in 2009, prompting prosecutors throughout Europe to raid hundreds of companies. Europol has previously estimated that damages for European taxpayers could total as much as €5 billion.
The embezzlement of VAT, also referred to as carousel fraud, exploits the way taxes are treated in cross-border trading where the movement of goods between jurisdictions is VAT-free. In the case of CO2 trading, the allowances were imported from overseas free of VAT and then sold on in a series of domestic transactions at prices that included the VAT, with the seller skimming the tax from the state.
The VAT fraud is just one in a series of incidents that has battered the EU’s Emissions Trading Scheme, a signature achievement of Europe’s ambitious program to combat climate change. The CO2 trading system sets a cap on the pollutants companies can emit and then forces heavy polluters to buy credits from companies that pollute less, creating financial incentives to cut emissions.
Earlier this year the electronic theft of nearly €30 million in CO2 allowances rocked the system, resulting in the shutdown of spot market trading. Some of the national registries in the EU that oversee the trade are still closed.
Some 180 people are being investigated, Mr. Badle said, adding that four people are being held in custody.
Seven of the people being investigated by prosecutors are employees of Deutsche Bank AG, he said.
Deutsche Bank said an investigation carried out on its behalf by law firm Clifford Chance “to date hasn’t found any indication that would support the allegations” against its employees. The bank declined to comment further on the matter.