The Customs Department has flatly rejected complaints from traders alleging that each and every commercial vehicle arriving in Malta by catamaran from Sicily is subjected to rigorous Customs checks.

Such checks, according to Customs director general Paul Scerri, are carried out randomly, and only in cases in which there is a strong suspicion from Customs intelligence of illegality on the part of returning traders.

While Malta’s EU accession in 2004 allowed for the free movement of goods between member States, excise goods – a category that includes alcohol, tobacco and fuel – must still be declared when entering Malta. All other goods enjoy free movement throughout the EU, including Malta.

“It is absolutely not true,” explained Mr Scerri, “that each and every commercial vehicle is searched when arriving by catamaran from Sicily, as claimed by certain traders and even the catamaran operators.

“Once goods are being transported, we take it for granted that there are no Customs checks, which were completely removed between Malta and other EU member States in 2004. We do, however, have the power to make surprise inspections, and from these inspections we have had too many results.”

Just last week, Mr Scerri said, Customs officers at the catamaran quay came across a van loaded with 460 bottles of whiskey that had not been declared to Customs and which were being illegally imported into Malta without the appropriate tax being paid.

While passengers are allowed a threshold of some 10-12 bottles of spirits, depending on the bottles’ volumes, when returning from an EU member State, anything above that amount is considered a commercial quantity.

Traders are also obliged to do a certain amount of paperwork when bringing excise goods back to Malta, which includes informing Customs about the incoming shipment.

Mr Scerri, citing the example as a case in point, commented, “It seems he was not going to declare the consignment to the Maltese authorities. We carried out a surprise inspection based on information from our intelligence unit, which works closely with the Italian authorities, we targeted this person and we had a positive result.”

But such surprise checks are more the exception rather than the rule, Mr Scerri insisted, adding that each returning catamaran trip carries an average of five commercial vehicles, of which sometimes one or two are targeted for checks. Sometimes, he added, no vehicles are targeted for checks and at other times Customs officials are not even present at the border.

From inspections carried out, Mr Scerri explained, it transpires that of the seven or eight traders regularly travelling between Malta and Sicily, almost all of them at one point or another have, since 2004, contravened Customs regulations at some point.

“The perception was,” added Mr Scerri, “that once Malta entered the EU anyone could go to Sicily and bring back commercial goods. This resulted in value added tax revenue losses for the government, as well as protests from business representative bodies about illicit trade – and they were right.”

But, Mr Scerri stressed, it is certainly not a case of every commercial vehicle being stopped and inspected. Most commercial vehicles, he added, pass through Customs without any checks and those stopped are only inspected when there is a good suspicion of the smuggling of excise goods or other illegal items. Private vehicles are also sometimes stopped but, similarly, only when there is a suspicion based on sound intelligence.

Following an agreement between the government, the VAT Department and the catamaran operators, which have been vocal on the issue, traders are now simply required to make a self-declaration of the goods they are transporting, which is handed in to Customs upon entry into Malta.

Before Malta’s EU accession, all goods coming into Malta had to be declared to Customs. However, since 2004, Customs has adopted a risk management approach and the declaration requirement only stands for excise goods, which is where Customs faces the biggest problems given the attractive financial incentive presented by the sharp contrast between excise duties charged by some member States such as Italy, and those charged by Malta.

While Malta charges, for example, some e6.52/Lm2.80 per bottle of whiskey, Italy levies a e2.33/Lm1 tax. Such excise duty is paid in the country of consumption and while whiskey brought into Malta for personal use is allowed in excise duty-free, commercial quantities have to be put through a procedure whereby excise duty is paid in Malta and the trader registers for a refund from Italy.

In addition to goods falling under the excise duty regime, Customs is also duty bound to check for illegally-imported firearms, drugs, counterfeit goods under intellectual property rights regulations and amounts of cash exceeding e10,000/Lm4,293.

Moreover, Malta’s accession to the Schengen zone does not deal with Customs controls, which were lifted in 2004 with EU accession, but rather only with the free movement of people and the removal of passport checks.