EU Import Rules Susceptible to Fraud, Auditor Report Finds

The EU’s simplified procedures make it easy to commit value-added tax fraud, according to a report published by the European Court of Auditors.

The report, published Monday, found it’s easy for importers to undervalue the products coming into the bloc, allowing them to pay less VAT than they should be.

A procedure known as “Release for free circulation – CP42” — which exempts VAT collection on goods imported from third countries into one EU member state when they are meant to be traded in another — is particularly vulnerable to abuse, the report found.

The EU offering known as ...