EPPO Slovakia: Operation Pantastic Uncovers CP42 Customs Fraud

• The European Public Prosecutor's Office in Slovakia is investigating a customs fraud scheme, code-named 'Pantastic', involving textiles and footwear from China.
• The scheme, active from 2016 to 2019, exploited Customs Procedure 42 (CP42) through false documents and undervaluation to evade VAT and customs duties.
• An estimated €44.3 million in customs duties and over €190 million in VAT were evaded, with €12 million in bribes paid to public officials.
• At least 50 suspects, including five questioned customs officers, are under investigation in connection with the organized criminal group.
• The investigation, initiated by an OLAF report, highlights the EPPO's role in prosecuting crimes against EU financial interests.

The total sum of bribes paid to these public officials is estimated to be €12 million, highlighting a deep-seated compromise of public trust and regulatory oversight.

The European Public Prosecutor's Office (EPPO) in Bratislava, Slovakia, recently initiated significant investigative actions, including searches, as part of a probe into an extensive customs fraud scheme. Codenamed 'Pantastic', this operation targets the illicit importation of textiles and footwear originating from China, allegedly facilitated by a network involving public officials. These measures were executed on Tuesday and Wednesday of October 2026 across various locations in Slovakia.

Premises belonging to import companies, customs representatives, and transport firms were subjected to searches and inspections. As a direct result of these ongoing investigations, five customs officers have been questioned. The scope of the inquiry is substantial, with at least 50 individuals currently under investigation for their suspected involvement in this complex criminal enterprise.

The investigation centers on an organized criminal group comprising multiple importing companies, carriers, and customs representatives. This group is accused of establishing and operating a sophisticated fraudulent scheme between January 2016 and December 2019. Their method involved the large-scale smuggling of goods from China into the European Union by exploiting Customs Procedure 42 (CP42). This specific procedure is designed to streamline cross-border trade by exempting importers from paying Value Added Tax (VAT) in the initial country of importation, provided the goods are subsequently transported to another EU Member State, where the tax is then due upon their final release.

To execute their illicit activities, the companies and customs representatives implicated in the scheme allegedly issued a minimum of 3,681 false Single Administrative Documents (SADs). These falsified documents were instrumental in facilitating the entry of Chinese textiles and footwear into the EU through various entry points, including major ports in Germany and Slovenia. Following their initial entry, the goods were then transported by truck to customs offices located in Nitra and Trnava, Slovakia, where they were declared for customs clearance and subsequently released for free circulation within the EU. The suspects deliberately made false declarations, asserting that the ultimate destination for these goods was Czechia, Poland, and the United Kingdom. This misrepresentation allowed them to benefit from the VAT exemption during transit. However, it has been uncovered that the perpetrators knew in advance that the goods would not reach the recipients specified in the documentation. Instead, they were diverted to other operators in different EU Member States, effectively circumventing VAT payment in the actual destination country. Furthermore, the scheme also incorporated the systematic undervaluation of imported goods, a tactic employed to reduce the amount of customs duties owed.

The financial repercussions of this elaborate fraud are staggering. It is estimated that the scheme resulted in the evasion of at least €44.3 million in customs duties. The amount of unpaid VAT is even more substantial, exceeding €190 million. Beyond these significant figures, the investigation has also uncovered a layer of corruption involving public officials.

Individuals employed within customs offices, members of the financial administration, and law enforcement officers are alleged to have breached their official duties by accepting bribes from members of the criminal group. In exchange for these illicit payments, these officials reportedly facilitated the release of significantly undervalued goods under the CP42 VAT exemption procedure, relying on the falsified documents provided by the fraudsters. The total sum of bribes paid to these public officials is estimated to be €12 million, highlighting a deep-seated compromise of public trust and regulatory oversight.

The European Public Prosecutor's Office (EPPO) is the independent public prosecution office of the European Union, tasked with investigating, prosecuting, and bringing to judgment crimes that affect the financial interests of the EU. This particular investigation, known as Operation Pantastic, was initiated following a detailed report from the European Anti-Fraud Office (OLAF), underscoring the collaborative effort in combating cross-border financial crime.

The Slovak Financial Administration Criminal Office (Kriminálny úrad finančnej správy) is providing crucial support to the EPPO in this ongoing inquiry. It is important to note that, in accordance with legal principles, all individuals involved in this investigation are presumed innocent until their guilt is proven in the competent Slovak courts of law. This case highlights the significant criminal enforcement risk from the EPPO for companies and individuals involved in EU cross-border trade, especially those utilizing Customs Procedure 42.

This investigation highlights the significant criminal enforcement risk from the EPPO for companies and individuals involved in EU cross-border trade, especially those utilizing Customs Procedure 42. Lawyers should advise clients to review their import documentation, supply chain, and internal compliance protocols to mitigate exposure to similar fraud schemes involving undervaluation or public official corruption.

Source: Original reporting via European Public Prosecutor's Office