Greece: Coping with EU Fraud

Publication Date01 Mar 1996
AuthorNestor Courakis
SubjectAccounting & finance
Journal of Financial Crime Vol. 4 No. 1 International
Greece: Coping with EU Fraud
Nestor Courakis
The most frequently found kinds of EU fraud in
Greece, in common with other European coun-
are the following three.1
Frauds committed in order to avoid
paying the countervailing charges
These are due when a non-EU product is impor-
ted to an EU country. The fraudsters try in this
case falsely to describe the product as being impor-
ted from another EU country. A typical example
of this misrepresentation is the so-called Greek
Maize case, which also prompted the intervention
of the Court of the European Communities in its
well-known decision of 21st September, 1989.2 In
1986 the offender exported a great quantity of
maize from Greece to Belgium through a Swiss
company. This was falsely presented as a Greek
product, while its origin was in reality from Yugo-
slavia. As a result of this device the Greek customs
authorities with the consent of higher officials
(among them a minister, who tried to cover it up)
allowed the transportation of maize from Greece
to another EC country without asking for the pay-
ment of the corresponding countervailing charges,
which were due to the European Communities.
Hence, the money was not paid by the exporters
and this created a damage sum of around drs 45m.
Since one of the persons involved in this affair was
a minister, the first trial against the perpetrators
took place before the Special Supreme Court
competent to try members of the Government
(Article 86 of the Greek Constitution). In its deci-
the Court convicted five out of seven per-
among whom was the accused minister.
They were sentenced to terms of imprisonment
ranging from three and two thirds years to ten
months for having committed (or instigated or
assisted in) acts of false certification and forgery.
Another trial for the same case, but involving non-
political persons, was tried before the (three-
member) Court of Appeal for Felonies in Athens,
acting as a first instance court.4 In its decisions
218a, 218b and 388 of 14th February, 1991
the Court found guilty six out of 11 accused per-
sons and imposed sentences of imprisonment
between four years and 15 months in addition to
pecuniary penalties for having committed (or
investigated or assisted in) acts of smuggling, fraud
incurring substantial damage, false certification and
forgery. More than two years later, on 2nd June,
the only Court of Appeal in Athens, com-
posed of five judges, decided to restrict the pun-
ishable acts to only fraud incurring substantial
damage for three defendants (another two were
absolved) and to reduce similarly the original pun-
ishments to terms of imprisonment for between 22
and 18 months, convertible in financial penalties,
in addition to financial penalties (Decisions Nos.
485 and 617/1993).5 Finally, this decision was
brought before the Supreme Court Areopag for
possible legal errors. Yet, the Court, in its decision
610/1994,6 confirmed the judgment issued by
the Court of Appeal on second instance and con-
sidered, therefore, as irrevocable, that the acts
committed by the persons involved in this case
against the EU budget constituted the crime of
fraud according to the Greek law. This decision
was based on the reasoning that Greece had
fered substantial damage being obliged to pay the
countervailing charges with interest, in compliance
with Article 13 of EU Regulation No. 2727/1975,
according to which the Member States are compe-
tent and responsible for collecting, on behalf of the
EU, the revenues due to it.
A similar case, in which Areopag was also
engaged in recent years, concerned the importation
to Greece of clothes allegedly emanating from an
EC country. The clothes were falsely presented, by
use of forged invoices, as coming from Great Brit-
ain, although in fact they originated from India
and their real price had been much higher than the
one recorded on the false invoices. The Court
judged that these offences, aiming at paying less
customs duties for this merchandise, constituted
acts of smuggling and of violating the provisions
on foreign trade.7
Frauds intending to collect restitutions
These are normally granted for exportation of EU
products outside EU countries. In these cases the
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