A. Kubilius and politics of shadow economy: may the smuggle roam free

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Prime Minister A.Kubilius. Hot commentary photo

Over 4 year’s government of A. Kubilius has failed to expose the ‘roof’ of smuggling within the system of law enforcement and customhouse.

Smuggling is a particularly relevant subject from the beginning of independence of Lithuania. It is a never senescent subject because governments come and go; one coalition is changed by another while smuggling network continues to work. Neither law enforcement institution nor custom department ‘has no teeth’ to basically curb it.

Before the upcoming elections, during the leaders’ debate chairman of HU-LCD Andrius Kubilius was boasting about how much the government achieved under his command against smuggling.

However I do not see that ‘activity’ of A. Kubilius governments’ in the battlefront against smuggling.

Does custom-house check containerized goods coming from China? Are boxes with goods within containers being counted? (And I mean really checked not just ‘checked’).

Are the counterclaim checks made on prices of imported goods (does the price declared in invoice match the prices of company sellers in China/Turkey/Poland)?

Are the barcodes of goods in custom-house’s declarations verified (are those really the imported goods that are written on declarations? Or sometimes instead of shoes for example ‘slippers’ get imported so they would need to pay less taxes and etc.?).

Why even now there isn’t any ‘operative’ inspection brigade which would, for example, go to already cleared goods and just verify if the barcodes written on custom-house declarations actually matches what is written on goods in warehouses or at the market (after all, there aren’t that many import ‘whales’ in Lithuania for it to be impossible to control and monitor them all, are there)?

Sometimes we seem to hear: there is no reason to fake prices on the invoice (the lower price is shown on the invoice the less taxes are needed to be paid to the state) because Chinese themselves write the exact price needed here, in Lithuania. But, if that is true, why Lithuania’s law enforcement does not cooperate with law enforcement of that country from which goods have been traded from? As a consequence by purposely lowering the price (on the invoice) economic damage is done to both parties. Like, by the way, Germany’s, from where that also comes to Lithuania in the full swing for customs clearance to import Chinese goods. Some claim Germans do not even care about prices written on the invoice, for example if jeans are ‘written’ to cost 1 LT so are the taxes counted only from that one litas and nobody thinks twice if that is true or not.

But Germany, like Lithuania, is a member of European Union, too. Then why couldn’t Lithuania be the initiator for battling against smuggled goods within EU? Why Lithuania, Poland and Germany does not cooperate (after all this system works not only China – Lithuania but also China – Germany – Lithuania, China – Poland – Lithuania) and join hands in this battle front? (Angela Merkel probably does not even suspect how naive German custom-house’s officers could be if the consignment is being ‘shipped’ for example 0.50 or 1 euros for a good that costs much more. Those greenhorns believe that there, in China, clothing and shoes are being sold to Europe for that price. But is it really like that?

And here A. Kubilius boasts of having attained so much in the battle against the ‘shadow’, but somehow there are no substantive achievements on this issue in Lithuania.

Did FNTT, who by the laws is allowed to create front companies and has created a bunch of them (with their help they were hunting companies which were ‘washing’ VAT), has created at least one front company that would blend in to smugglers corporate group and ship smuggled goods from China, Turkey, Poland and etc.? Surely, after using such shell business model (when only about 30-50% of goods are being brought by documents and the rest of them just by agreeing with custom-house also taking barcodes into account) could be possible to unravel the whole smuggling network and not only the merchants but the whole public sector: custom-house (from Klaipeda to Vilnius) and law enforcement officers participating in the business or for an appropriate fee ‘cloaking’ them.

So, Andrius Kubilius premiership is coming to an end. However, the backbone of smuggling within law enforcement and custom-house is yet to be broken: neither transverse invoice validation (not only because of lowered prices but also for the ‘shrinking’ amounts: has anyone ever inspected how many tons of goods are being shipped from China or Turkey and how much of that is being brought to Lithuania? I wonder what difference in tons would have accumulated over a year.) nor the audit for imported goods barcodes and operational goods verification after customs clearance, nor trade goods amount inspection, nor front companies from FCIS establishment for denunciation of whole smuggling system from A to Z.

Therefore we can make only one conclusion: A. Kubilius government’s fight against smuggling is only a sham and nothing more.

And so, the only hope that is left to us is that when current chairman of SIS Z. Padzevičius will finally retire from his post, next chairman of SIS will start his battle on this battlefront from… a list of prosecutors whose family members participated in ‘market’ business. Furthermore, it is the prosecution that supervises pretrial investigations on FCIS.

FCIS (Financial Crime Investigation Service)

SIS (Special Investigation Service)

HU-LCD (Homeland Union – Lithuanian Christian Democrats)

VAT (Value Added Taxes)

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