Evasion of customs and excise duties
Visualization of narrower problems
Name(s):
Customs tax avoidance
Smuggling
Customs fraud
Carriage of contraband
Nature
Smuggling is the clandestine movement of commodities or persons across borders including: false identification of products, their contents, their country of origin or other information. Its objectives may be financial (to avoid duties or import or export restrictions); criminal; political; or humane.
Incidence
To indicate their inexhaustible range, a list of some smuggled consignments could include butter, cocaine, machine guns, political manuscripts, escaped criminals, stolen art masterpieces, refugees, alcoholic beverages, protected species of animals, tobacco, abducted women and children, and diamonds. Because of the difficulty involved in detection, some countries (such as the USA and the UK) may have very few smuggling convictions when compared with the thousands of minor and hundreds of major undetected smuggling operations annually.
The USA Customs Service estimates that about 10% of all imports are fraudulent. In fiscal years 1984 and 1985, only 27% of the textile and apparel imports involved in customs fraud were even detected. In Italy in 1993, cigarette smuggling was estimated to have cost the treasury £685 million in lost revenue.
For several years a Japanese car manufacturer exported to the European Union, from Hungary, vehicles essentially Japanese in origin. The manufacturer claimed the cars were of Hungarian origin, in order to take advantage of the duty-free treatment enjoyed by Hungarian exports. The fraud was uncovered in 1998.
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Type
(D) Detailed problems