It is one single company that is being investigated for fraudulent sugar imports into both Malta and the UK, the European Anti-Fraud Office (OLAF) has confirmed with this newspaper.
Recent international investigations carried out by OLAF uncovered fraudulent sugar imports to both Malta and the UK in 2004 and 2005. Importing companies had presented false documentation at Customs stage and E2 million in taxes were evaded in the process.
Contacted on Friday, an OLAF spokesperson explained that the Office was not at liberty to reveal the name of neither individuals nor companies implicated.
In a recent statement on the issue, the European Commission said that administrative and judicial proceedings have been initiated, while significant quantities of sugar have been seized and assets have been frozen as a result of the investigation’s findings.
Asked for further details, the OLAF spokesperson added, “Due to the fact that the matter is subject to judicial secrecy with regard to the judicial proceedings instigated by the competent Maltese judicial authorities, no detailed information can be provided.”
The EU holds a preferential trade agreement on sugar with Africa-Caribbean-Pacific (ACP) countries, under which the price of sugar is guaranteed and the beneficiary countries are allowed to export a fixed quantity of sugar to the EU duty-free.
The investigations coordinated by OLAF found that sugar originating in Brazil and refined in Bulgaria was imported to Malta and that false documentation had been presented at import stage to disguise the consignments’ true origin.
The EC explained, “The fraudsters tried to take advantage of the system of preferential trade arrangements with the ACP countries and falsified relevant documents to execute their plans.”
In all, OLAF has established that, between Malta and the UK, over 4,000 tonnes of raw cane sugar had been “misdescribed” at import stage in 2004 and 2005, resulting in tax evasion of some E2 million.
OLAF described how false documentation (EUR.1 movement certificates) had been presented at import to disguise the real origin of the goods, and that the importer had already previously been involved in similar irregularities with regard to imports of sugar from the Western Balkans.
In the case of the illegal Maltese and British sugar imports, the OLAF investigation was triggered by initial information received from the UK Customs office.
Several suspect sugar imports – declared as originating in ACP countries such as Zimbabwe, Malawi and Zambia – have been identified and it is estimated that a total of up to €30 million could be involved in all the sugar cases being investigated. OLAF confirmed to this newspaper that there are a total of 11 ongoing investigations across the EU.
In a separate yet related issue, Maltese companies were found to have hoarded surplus sugar stocks in the lead up to Malta’s EU accession. The practice has landed the government with a E1.2 million fine for not ensuring against the speculative stockpiling of sugar.
Malta’s fine had originally been in excess of E7 million, but had been brought down to the E1.2 million level after negotiations between the European Commission and Malta’s Rural Affairs and Environment Ministry.
During discussions on the matter, the Ministry had successfully argued that one particular local private company found to have a sugar surplus uses its sugar for the export of products to third countries and was not intended for local consumption.
Although the fine stems from surpluses held by the private sector, it is the Maltese government that is liable for the fine’s payment. The Ministry at the time had stressed the government “can still investigate if there has been any possible speculation on the market”.
Of the five member States fined over sugar hoarding, Malta had received the lowest overall fine, followed by Estonia (E45,686,268), Cyprus (E19,991,489), Latvia (E4,418,577) and Slovakia (E4,209,786).