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Dark roads of fuels mafia on the Balkans

30 January 2012 / 16:01:33  GRReporter
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Thousands of oil tankers travelling from Greece to Bulgaria, Macedonia, Turkey and Albania "disappear" miraculously. And not with a magician's wand, but because of increased smuggling of fuel for which the treasury is losing billions of euro from "saved" taxes.

The scheme is simple. Tanks, which are supposed to carry out exports and are not taxed, do not leave the Greek border, but return to the local market. Then, resale companies sell the fuel at regular prices, without invoicing it. The amount that sinks into the pockets of the participants in this chain exceeds two billion euro a year. The centre of the "carousel" is in Thessaloniki.

All countries are obliged to declare to the United Nations' competent services detailed data on their fuel trade with the rest of the world. The exporting country and the importing country order fuel quantity and price. The comparison between these indicators makes it clear that either the United Nations do not know how to make calculations, or Balkan speculators earn huge sums.

The example of the alleged export of fuel from Greece to Macedonia is indicative of what is happening. According to the database of the international organization (, Greece declared in 2009 that 222.9 thousand tons of petrol and diesel worth about 134.5 million dollars were exported. For its part, Macedonia declared that only 12.3 thousand tons worth 10.3 million euro  were imported. In 2010, exports to the value of 55.8 million dollars were declared, while Macedonia declared zero imports.

The same is evident from the data on fuel exports to Bulgaria with the exception of 2006 and 2010, when the value of the imports was higher than the value of exports from Greece.

There are several ways for the fraud. One is when the Greek tank driver declares exports but he does not cross the border and returns the goods to the local market. The other way is through declaring a fake export to the customs, but the fuel is not transported to the border. The third way is when the driver declares a larger quantity than the actual amount of fuel carried. This is usually done by means of double invoices and this is the most common way used for smuggling between European Union member states.

United Nations'statistics indicate the presence of another mathematical paradox, which occurs mostly in sales between Turkish and Bulgarian companies. For example, Greece declared exports of petrol worth 116 million dollars in 2010, while Turkey declared that the country had imported much larger quantities worth 573 million dollars.

How does this happen? Tank drivers and their companies declare exports of any other liquid product, often even water, when in fact they carry fuel. In the importing country, however, they declare the real cargo.

This fictitious leakage is very convenient for the "colleagues" of traffickers in neighbouring countries of Greece. This applies particularly to Turkey, where due to the sharp growth in development and high taxes, huge quantities of smuggled fuel are carried and the demand for bills is very high. It is convenient for the Greek smugglers, who hold large amounts of fuel and then want to "get rid" of them, when an insider hints  that they will be inspected, or to justify the size of their warehouses. Therefore, water is magically transformed and is exported to Turkey as petrol.

United Nation figures show the amount of the fraud. The "traditional" method of returning the fuel to the Greek market without invoices was used in the trade with Turkey until 2008. In the period 2007 - 2010, however, the declared quantities imported from Turkey are much larger than those Greece declared as exported. The same scheme also applies to exports to Albania since 2002.

According to the Professor of Economics at the Aristotle University of Thessaloniki Dimitris Mardas, it is not possible in practice to calculate the losses to the state from fuel smuggling. "We hear different information about millions of euro, but we can only guess what the actual turnover is until some smugglers are caught or any quantities found." He stressed that the investigation of his team included only exports to countries separated by a land border with Greece.  

"We did not deal with exports carried by sea because things there are even more unclear. The case of Bulgaria is special among the countries with land borders. This is because it is a member of the European Union. When two European countries are trading, the VIS form is filled in. The exporter and importer fill in such a form after the export and then, they send the form electronically to the competent services of the European Union, where a comparison is made. There should be no difference in the quantities and prices. But if this is so, the difference in the United Nation data should be explained. In case the Greek form contains different data than in the Bulgarian form, the question is, why procedures have not been triggered to clarify the reason for that and measures have not been taken." In his opinion, it is unclear whether any measures have been taken at European level, but certainly, nothing has been done in Greece.

The problem with the government's inability to deal with fuel smuggling has caused intergovernmental conflict and controversy between the Ministries of Finance and Regional Development. It began when a senior official of the Ministry of Regional Development described certain circles from the financial institution, without naming them, which are opposing the fight against smuggling and illegal trade. He said the political leadership of the Ministry of Finance has prevented the adoption of the only, in his opinion, practical solution to disrupt smuggling of fuel – installing devices to record the fuelling and leakage of petrol stations.

The same official said that there is a network of departmental representatives, tax officials and customs officers, who are doing everything possible to hamper the installation of the control systems.

A little later, the economic prosecutor Grigoris Peponis sent an order to the prosecution to initiate a criminal investigation against former Secretary General of the Ministry of Finance Yannis Kapeleris and the former head of the customs control service Evangelia Pantazi. They were charged with failure to perform their duties to the degree of felony, after which they resigned.

Now, the Greek government aims to install control systems throughout the chain of fuel distribution from refineries to petrol stations, said Prime Minister Lucas Papademos a few days ago in response to a parliamentary question relating to fuel smuggling.

Two of the largest oil companies and the association of fuel trading companies in Greece issued a joint statement, describing cases of fictitious exports of fuels, insufficient control of trade in fuel oil and new ways to tamper with petrol through the use of methanol and toluene.

Tags: EconomyCrime newsCompaniesSmugglingFuelsBalkansUnited Nations
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