The European Public Prosecutor's Office (EPPO) in Porto has launched a Europe-wide investigation into suspected large-scale customs fraud in connection with the import of e-bikes from China. The investigation covers several EU countries and focuses on a Portuguese company suspected of systematically evading anti-dumping duties since 2020. According to the EPPO, a total of sixteen searches were carried out in Belgium, Germany, the Netherlands and Portugal to secure evidence of the suspected illegal practices. The customs authority did not specify which companies were involved.
The customs duties on imports of e-bikes from China are quite considerable: the anti-dumping duty is 62.1 per cent of the customs value of an e-bike, and an additional countervailing duty of 17.2 per cent is levied. Finally, the importing companies must also pay import sales tax (19 per cent in Germany).
The investigation revealed that the accused Portuguese company apparently pursued a sophisticated strategy to circumvent the anti-dumping duties in force on fully assembled e-bikes from China. Instead, the company allegedly imported the bikes in disassembled form, deliberately misdeclaring the shipments to the customs authorities. This approach allegedly enabled the company to reduce import duties - and thus gain an unfair competitive advantage. The EPPO emphasises that the e-bikes were fully constructed in China at the request of several European resellers and then delivered to the Portuguese company in disassembled form for assembly. After assembly, the e-bikes were supposed to have been sold back to the European resellers in Belgium, Germany and the Netherlands.
Scope and impact of the investigations
The damage to the EU budget caused by this suspected fraud is estimated by the investigators at around 2.25 million euros. These are not astronomically high sums, but it remains to be seen whether the authorities have only scratched the tip of the iceberg. The searches carried out in the four countries involved show the cross-border nature of the case and the close co-operation between the European law enforcement authorities. In Germany, the Munich Customs Investigation Office was involved in the investigations, while in the other countries the respective tax and customs authorities as well as specialised investigation units were deployed. The EPPO emphasises that the presumption of innocence applies to all persons involved until their guilt is proven before the competent Portuguese courts.
Significance for the e-bike industry
The case highlights the challenges facing the European e-bike industry on the one hand and the customs authorities on the other. China is one of the most important production countries for the bicycle industry, particularly with regard to carbon frames, but many component manufacturers also have their production facilities there. On the other hand, import duties are a major cost factor in companies' pricing. The anti-dumping duties were introduced to protect European producers from unfair trade practices. The alleged circumvention of these duties by importing disassembled e-bikes and assembling them in the EU undermines these protective measures.
Outlook and possible consequences
The EPPO's ongoing investigations could lead to stricter controls and possibly to adjustments to customs regulations for the import of e-bikes and their components. For the industry, this means that importers and dealers will have to expect closer inspections and stricter requirements in future. At the same time, the case could serve as a precedent and lead to similar investigations in other areas of the bicycle industry. European e-bike manufacturers are likely to follow developments closely, as the outcome of the investigation could potentially have an impact on the competitive situation in the market.
Josh Welz
Editor-in-Chief
