EU completes sugar exports fraud investigation

Shame Makoshori



THE European Union (EU) has concluded investigations into foreign companies that fraudulently exported sugar to the EU market under a local company’s

quota.


Businessdigest reported last week that sugar producer Hippo Valley Estates had piled up pressure on the EU to wind up a three-year investigation into the fraudulent imports of sugar into its market.


The companies, believed to be domiciled outside Zimbabwe, were falsifying certificates of origin and taking up Hippo’s quota under the African Caribbean and Pacific (ACP) arrangement.


The fraudulent exports are believed to be part of a well-orchestrated scandal that has seen several other African companies being robbed of their quotas by dubious firms generating fake certificates of origins.


Businessdigest could not immediately establish the identity of the companies involved in the scam, believed to have taken place over a long period of time.


Responding to businessdigest’s questions on the issue, an EU spokesman said the organisation’s anti-fraud unit had handed over the document containing its findings on the issue to its headquarters in Brussels.


Staff at the head office were now studying the document before acting on it.


It is expected that the companies involved in the illegal exports were likely to get a hearing first before any punitive measures were taken against them


“The investigation has been closed by the EC (European Commission)’s anti fraud office and the findings have been handed over to the proper offices that deal with the sugar quota in EC headquarters,” a spokesman for the EU delegation in Zimbabwe, Josiah Kusena, told businessdigest.


“Some final information has now been requested from Zimbabwe and the concerned exporting-importing companies,” said Kusena, adding: “Zimbabwe is presently working with the EU Delegation in Zimbabwe, the specific EU offices in Brussels and the embassies of the concerned member states to get the problem sorted out.”


He indicated that once it was established that Hippo had lost its quota through illicit trade by the accused companies, the quota would be restored.


Businessdigest understands that the sugar had been exported via a United Kingdom company.


Under normal circumstances, the United Kingdom sugar importing company that holds the EU-Zimbabwe sugar import licences can only import sugar through a board known as the Zimbabwe Sugar Sales. The Zimbabwe Sugar Sales oversees all sugar exports to the EU.


The EU in a recent market update admitted that there were sporadic violations of export and import policies.


The EU said in the market update that it anticipated increases in sugar output from Africa, particularly from Zimbabwe and Swaziland, to boost its import requirements.


Sugar output in the two countries was recently revised upwards from 478 000 tonnes to 625 000 tonnes.


Hippo has indicated that it is ready to supply all preferential quota export markets to the EU, the United States of America and other bilateral regional export markets during the current marketing season.


The fraudulent exports were direct results of Hippo’s failure to meet its export quota to that region after A2 farmers invaded part of its estates resulting in a slide in production.


Hippo is, however, not the only African company that has been affected by the fraudulent transactions.


In Mauritius, commodity companies are also facing similar problems while in the South American timber markets, companies regularly lose potential export revenue through the practice.

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