VAT evasion amounting to €3.6 million: European Public Prosecutor’s Office orders substantial seizures in Prato

Brussels – Smuggling of clothing and textiles from China, along  with VAT evasion. On this charge, the Italian Prato Financial Police (Guardia di Finanza) seized 237,000 garments and over 5.5 million metres of fabric in Italy, as part of the investigation by the European Public Prosecutor’s Office (EPPO) in Bologna. According to the European Public Prosecutor’s Office, the investigation concerns a smuggling scheme in which products are imported from Chinese suppliers to storage premises in Italy to avoid customs duties and VAT obligations, “by allegedly using fake suppliers, buyers, and delivery addresses.”

Evidence “shows” that the system also relied on fake companies set up across Europe, mainly registered in Poland and Germany, to reroute the invoices and payment orders from actual Italian buyers. This made it appear as though the goods were purchased within the European Union, allowing the suspects to avoid paying customs duties and import VAT. Based on the evidence, over the last three years, the fraud scheme enabled the suspects to evade import VAT and customs duties totaling 3.6 million euros.

The goods were found in four hidden warehouses controlled by Chinese individuals in Prato, a city known for its textile industry. The raid follows the previous one involving 2.2 million metres of fabric in nel November 2025, bringing the total estimated value of the seized goods to 10 million euros.