In a major development highlighting the European Union’s growing resolve against large-scale financial crime, the European Public Prosecutor’s Office (EPPO) announced on November 25 that it has uncovered the first multimillion-euro VAT fraud in Croatia. The sophisticated operation, involving 78 million euros (approximately $90.27 million) in unpaid tax, underscores the scale of cross-border tax evasion schemes within the EU and the importance of international coordination in combating them.

The investigation targeted a criminal network involved in trading electronics and hygiene products. The EPPO, in close cooperation with Croatian tax authorities, local police, and Italy’s Guardia di Finanza, executed a comprehensive operation resulting in multiple arrests and significant asset seizures in both Croatia and Italy. The case is considered a landmark for the EPPO, marking a decisive effort to disrupt highly organized tax fraud schemes that span multiple member states.

In Croatia, authorities arrested six suspects, five of whom face requests for pre-trial detention. The investigation revealed that the group had set up a complex web of conduit companies to execute fictitious intra-EU trades. These trades allowed the group to claim VAT exemptions illegally, effectively evading substantial amounts of tax. Croatian authorities froze two properties and eight vehicles belonging to the suspects, valued at approximately 650,000 euros ($752,240).

Investigators noted that the network was meticulously organized, with roles divided among members to manage logistics, administration, and accounting, ensuring the fraudulent activity remained concealed. EPPO prosecutors emphasized that such operations often involve multiple countries and require cross-border coordination to be effectively dismantled.

The investigation extended into Italy, where the........

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