Annex H
UK INVOLVEMENT IN THE EUROCANET PROJECT
The Eurocanet project (the European Carousel
Network) came into effect on 1 January 2005 and is administered
by the Belgian VAT Carousel Fraud Unit (OCS). There were initially
five Member States involved, including the UK. Currently all Member
States, with the exception of Germany, participate, to a greater
or lesser extent, in the project. The project involves the monthly
exchange of European sales list data and clearance requests of
VAT registration numbers between participating Member States in
respect of certain targeted traders. Its main objective is the
early identification of missing or potentially defaulting traders.
Each Member State can request another Member State to closely
monitor a trader. A maximum of five suppliers can be monitored
in a Member State.
In November 2005, OLAF proposed that it should
become an external partner of Eurocanet and sought access to the
data held. The UK and some other Member States do not recognise
the competent authority of the EU Commission, and therefore OLAF,
to exchange taxpayer confidential information under EU Regulation
1798/2003, which provides for administrative cooperation in the
field of VAT between Member States. Furthermore, in the UK Government's
opinion, giving the Commission the same powers as Member States
to request investigations in order to provide information could
cause delays and would have resource implications.
The UK sought reassurance from OCS that any
data supplied would not be shared with OLAF and, in the absence
of such assurances, has not provided any data since December 2005.
Eurocanet is of benefit to those Member States whose anti-fraud
systems lack sophistication. The UK already has systems in place
that can identify missing and defaulting traders far more quickly
than through the Eurocanet process, eg through pre-registration
checks and, where a missing trader escapes those checks, by analysing
domestic supply chains and tracing suspect deals elsewhere in
the chains back to the tax loss caused by the missing trader.
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