Politics

Customs fraud from China: Criticism of inadequate control by the Federal Ministry of Finance

The former Finance State Secretary Michael Meister (CDU) criticizes the Federal Ministry of Finance under Christian Lindner (FDP) for its lack of measures against widespread customs and tax fraud in imports from China.

Eulerpool News Aug 27, 2024, 9:11 AM

The former financial state secretary Michael Meister (CDU) has sharply criticized the Federal Ministry of Finance. In several letters available to WirtschaftsWoche, he accuses the ministry, under the leadership of Christian Lindner (FDP), of not taking sufficient action against massive customs and tax fraud involving imports from China. The damage to the German state budget from undervalued shipments, particularly from online platforms like Temu and Shein, is immense.

Every day, hundreds of thousands of shipments from China arrive in Germany, often undervalued to evade customs duties and import VAT. According to sample data, up to 65 percent of these imports are declared below their actual value, resulting in an estimated loss of billions. Meister calls on the federal government to take swift and decisive action against these alleged tax tricks.

Particularly troubling is the fact that many of the imported products do not meet German safety standards. These goods, often produced specifically for export, are not allowed to be sold in China itself. Customs, whose task it is to ensure proper customs clearance and product safety, is reaching its limits.

Despite a workforce of over 40,000 customs officers, only a fraction is responsible for the inspection of imported goods. Additionally, many shipments enter the EU through foreign airports like Liège, where German customs no longer have jurisdiction according to current EU law. This highlights the urgency for a reform of EU customs law, which is not expected to take effect until 2028 at the earliest.

Master also expresses concerns regarding the current measures of the Federal Ministry of Finance. While the ministry points out that the customs reform is a complex regulatory package and the transition periods provided may be tight, the CDU politician calls for a more determined approach. The criticism is also directed at the practice of assigning customs officers to guard the ministry's building in Berlin while waiting for the EU customs reform.

The conflict highlights the discrepancy between political thoroughness and the rapid developments in global trade. While Chinese online retailers are increasingly gaining market share, German companies and consumers feel inadequately protected.

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