A structured group of smugglers in Albania forges papers, clears and registers luxury cars and then sells them at market value with the help of notaries. The financial damage caused to the state is estimated at about 206 million ALL (1.8 million $) during the years 2015-2019. The identities of hundreds of innocent citizens have been used for clearing the cars through customs. They turn out to be debtors with staggering sums, while seeking “justice” from the courts as the state demands money for the vehicles that have been cleared without their knowledge.
Ergys Doda, 35 years old, has been wandering the doors of the courts of Durrës and Tirana for three years. He was part of the Police structures for seven years, six of which he served as a Traffic Police officer. Currently, although he is the head of the family, he is unemployed.
“I am blocked from starting work,” says Doda, while explaining that the bailiff froze his accounts in the second level banks in order to collect the fine the Customs imposed on him.
The 35-year-old is accused of forging customs papers for a luxury car 2017 BMW X4 with a market value at the time that ranged from 47-58 thousand $. Ergys has been fined 26.300 $, of which 9000 $ are evasion of customs duty for changing the model of the vehicle, while another 17.300 $ are penalties.
“I cannot deal with such a car. Only when I was called for interrogation did I learn that it was a BMW model X4”, – says Doda.
But even though he denies having anything to do with the smuggled vehicle, a claim that is also confirmed in an investigation by the Tirana Prosecutor’s Office, Ergys cannot appeal the penalty. Under customs law, he must first pay the fine and then claim his right.
“I do not know who benefited from this!” – he says.
Ergys claims that he does not know where they could have taken his ID card, as he always had it with him. But investigations shed a little more light on this fact.
“Copies of the identity card that were used for forgery must have been taken from the customs clearance files of his vehicles,” claims a source from the judicial police, emphasizing that “Doda had cleared his vehicle at the Durrës customs a few months before the BMW was cleared with fake documents.”
We requested official information on the investigation process conducted by the Tirana Prosecutor’s Office, which had sent the case to court, where Ergys Doda as well as another citizen named Roland Hoxha had fallen prey to forgery of signatures for customs clearance, sale and resale of the vehicle BMW X4. This fact was confirmed by an act of graphic expertise on which the request of the Prosecution is based (no. 105, dated 07.01.2019).
“To carry out this expertise, about 200 signatures were taken from 35-year-old Doda during the investigation stage,” – says another source from the prosecution in Tirana.
The source adds: “His signatures were compared to those found in the file of the luxury car at The Regional Directorate of Road Transport Services, and the sales contract of the vehicle compiled by the notary Perian Bodinaku.”
The completion of the investigation of the Tirana Prosecutor’s Office revealed that Ergys Doda and Roland Hoxha had fallen prey to a double forgery initially at the moment of customs clearance at Durrës Customs, a file which was submitted and registered at The Regional Directorate of Road Transport Services in Tirana by the specialist Arber Kamberi, and then in the sales contract of the vehicle before the notary Bodinaku (No. 5539 Rep., No.2058 Kol, dated 21.08.2017). Both, Kamberi and Bodinaku, have been considered as defendants by the Tirana Prosecutor’s Office on charges of “abuse of office”. The perpetrators and the main financial beneficiaries of car smuggling have not been identified.
But the story of Ergys Doda and Roland Hoxha – whose ID cards and signatures were obtained, counterfeited and used for the customs clearance of luxury vehicles – is not an isolated case. There are more than 200 people who have fallen prey to this scheme.
The General Directorate of Customs through an official response confirms that in five years (2015-2019) the employees of the customs investigation have managed to discover 225 cases, all reported to the Prosecutor’s Office. According to them, the total financial damage caused to the state is estimated at 1.8 million $. “Evasion of customs duties from car smuggling during this period is 206 million ALL”, – the Customs letter claims.
There are three most problematic customs at national level, where Durrës Customs leads with 101 smuggled cars followed by Përmet Customs with 53 cases and that of Tirana with 52 vehicles. Dozens of cases have also been reported in Gjirokastra, Saranda and Dibra.
“The cases we have identified in these cities are all luxury cars produced in the recent years, such as Range Rover Sport, Porsche Cayenne, BMW X6, BMW X4, Mercedes Benz GL, Audi A7” – says an officer at the customs investigation directorate. He adds that “all these cases of smuggled vehicles in many cities have one thing in common: they have gone through the same mechanism, underreporting of manufacture year, vehicle model, or engine power.”
The same source confirms that “the vast majority of sales contracts, and the registration of vehicles with The Regional Directorate of Road Transport Services have been carried out in Tirana, raising suspicions that the structured group of smugglers operates in the capital.”
The smuggling scheme: how luxury cars are cleared, registered and sold!
The criminal group of smugglers uses a sophisticated scheme for the customs clearance of luxury vehicles. This mechanism causes a financial damage to the state – due to evasion of customs tax through the falsification of manufacture year and engine power – and also affects the citizens. The identities of the latter are used, signatures are falsified, and they become bearers of massive fines, as in the case of former police officer Doda.
In the first part of this scheme, we will show the “weak points” of the system that create space for this evasion, starting from the smuggler to the customs agent and the specialist of the Regional Directorate of Road Transport Services:
On February 14, 2017, a customs declaration was uploaded in the customs system Assycuda World of the Saranda branch for the vehicle “Range Rover Sport” of manufacture year 2004 and engine power 2993 CC. In addition to this declaration, the vehicle ownership certification was also submitted, including a copy of the ID of a Greek citizen, a Greek license, and other documents of the vehicle.
This file was uploaded by customs agent I.I. in Saranda, who also dealt with the notarization and translation of all the documents submitted to customs. The customs system has automatically classified the file in yellow, which means that, only the verification of the documentation would be performed for this car, not its physical control. 85.7 thousand ALL (752 $) were paid for the customs clearance of this vehicle.
The registration of the Range Rover was carried out ten days later in the Regional Directorate of Road Transport Services in Tirana by specialist Indrit Tafalla, an employee convicted several times by the court during the following years for “abuse of office”. This vehicle is registered in the name of the citizen D.P., but now not with the manipulated documents submitted to the Saranda customs but with the authentic documents of the car.
Document with authentic data (left), Customs declaration with manipulated data(right)
[click on them]
The procedure was identified as suspicious by the anti-smuggling unit. Based on its investigation, the documents of which we possess, it is concluded that the car “Range Rover Sport” was not registered with the forged 2004 manufacture year as it was cleared at the Saranda customs, but with the original manufacture year of 2015 and the exact name of the Greek owner. Investigations confirmed that the smugglers had also forged a letter from the vehicle’s chassis from “F” to “E”.
According to the report of the Customs Investigation, “the evasion of customs duty for the vehicle “Range Rover Sport” declared for customs clearance with customs practice Imp.4, no. R 34, dated 14.02.2017 by the citizens Ch.M. and D.P. is in the amount of 1.19 million ALL (10.400 $)”.
The same customs agent cleared another vehicle “Range Rover Sport” at the Saranda Customs the next day, using the identity of the same Greek citizen again, but with manufacture year of 2006 and engine power 2993 CC.
A week later, it was the specialist of the Regional Directorate of Road Transport Services Indrit Tafalla again who registered the vehicle “Range Rover Sport”. The car was not registered with the fake documents with which it was cleared, but with the original ones (2011 manufacture year and 3593 CC engine power). The new owner of the vehicle was A. K., detained by the police in 2018 on charges of “vehicle smuggling in collaboration”. “The evasion of customs duty is estimated at 500.000 ALL (4400 $)”, – it is stated in the file of the Customs Investigation Directorate.
When asked during the investigation process, the customs agent who dealt with the customs clearance of the two Range Rovers in Saranda said that the documents uploaded to the system were drafted by him based on the documents submitted to him for the vehicle, the license, and the car ownership.
“I am not aware that the car has been registered in the Regional Directorate of Road Transport Services with a different manufacture year and engine power from the one I declared for customs clearance”, – he concludes.
Although the “Customs Code of the Republic of Albania” in Article 23 states that “the filing of a customs declaration makes that person responsible for the accuracy and completeness of the information provided in it, as well as its authenticity”, we addressed the expert of Customs Law, Antoneta Sevdari, for a more accurate interpretation.
“In cases when the documents are presented with manipulated data from the importer of the goods and the customs agent is not aware of this fact, he/she cannot be held responsible”, – emphasizes Sevdari, but she adds- “being well-acquainted with procedures, customs agents unfortunately serve as a mechanism to falsify documents and carry out smuggling in many cases”.
Sevdari points out that if they turn from legal intermediaries into accomplices in the commission of the criminal offense of Smuggling, and these facts are revealed by the investigation, they must be held responsible for the criminal offense “Smuggling by employees related to customs operations”.
“There have been cases of investigations in practice, but they are sporadic and not in accordance with the frequency of the smuggling phenomenon” – she concludes.
“A good part of customs operations are carried out through agencies or, as they are called, authorized economic operators and they should be supervised as strictly as possible because they may be the first breach”, – says the expert on tax and fiscal policy, Eduard Gjokutaj. He adds that “the second breach may be within the customs and tax administration, and here it depends on the level of corruption”.
But this corruption, according to Mrs. Sevdari, could easily be avoided if “customs control, customs investigation and other structures responsible for combating smuggling would work”. She adds that in the conditions of this malfunction, the use of technology could be one of the solutions:
“It’s a pity that in Albania there is no computer system to coordinate tax data with customs data, or with the data of the Regional Directorate of Road Transport Services.”
After the smuggling of the vehicle and the registration, the second part of the scheme is related to the finalization of the sale of the customs cleared vehicle, and to perform such an act a notary office is needed.
Such is the case of the citizen Adem B., whose documents were used in October 2016 for the purchase of the car 2015 “Land Rover” from an Italian citizen. This contract was signed with the notary Gj. K in Tirana.
Two months later, this vehicle was cleared at the “Tre Ura” Customs as a car with a manufacture year of 2005, reporting it as ten years older in order to avoid its classification as a “luxury car”. After six months, in June 2017, the off-road vehicle “Land Rover” was registered with the original manufacture year of 2015 in the Regional Directorate of Road Transport Services, and a few days later it was sold again at the same notary office in Tirana.
Sources from the judicial police claim that, after performing the graphic expertise of Adem’s signatures, they have come to the conclusion that “the writing and the signature in the sales contract and the registration file of the vehicle are not his”. Investigations are still ongoing.
From this case of forged documents for the vehicle “Land Rover”, the Albanian state suffered a financial damage estimated at 990.000 ALL (8700 $), an amount that, as in the case of Ergys Doda, weighs on Adem in the form of a fine, which together with the penalties amounts to about 3 million ALL (26.300 $).
The above scheme of smuggling expensive vehicles – with a total financial damage of 1.54 million $, money that could have been used by the Albanian state to purchase 84 respiratory apparatus in this pandemic situation – did not emerge by chance. This corrupt mechanism has functioned in the chain of customs clearance and registration since the imposition and collection of luxury car tax by the Albanian government.
Luxury car tax, in 2017 financial damage from smuggling increased twice as much as tax receipts
A year later, the Ministry of Finance published the report “On the implementation of the annual budget 2017”, which identified an increase in the inflow of luxury cars by 1541 more compared to 2016. According to the Ministry, this inflow exceeded all expectations, bringing an increase in tax receipts, as well. Officially asked through a request for information, the Ministry of Finance confirms that “the revenue collected for the initial registration tax of luxury vehicles for 2017 is 426 million ALL (374.000 $)”.
But, as shown by data from the customs and the prosecution, the peak of “success” of this fiscal policy on luxury car tax also marks the peak of smuggling of these vehicles. Only in 2017, some 56% of the total cars entering the Albanian market during the last 5 years were smuggled.
The General Directorate of Customs informs that in 2017, the financial damage caused to the state by 126 smuggled vehicles seized reaches up to about 1 billion ALL (877 thousand $) of unpaid liabilities. This amount is twice as high as tax receipts from legal customs clearance.
We addressed the Ministry of Finance again for a comment on this fact, but officials at this institution have not responded to our request, making a tactic approval of this significant loss that has been caused to the state.
According to the fiscal policy expert, Eduard Gjokutaj, the time has come for the Ministry to weigh the advantages and disadvantages of this tax: “Every new tax that is imposed, it takes time to be introduced, it creates distortions in the market, not only in terms of evasion, but also of application or misclassification. This requires an analysis by the Ministry of Finance of its pros and cons for these years, as it is a new policy. The sole purpose is to minimize smuggling”, he said, adding that a tendency to evade this tax has been noticed over the years.
While the expert Sevdari states: “Based on these simple statistics alone, the responsible authorities should be put on alert to reform the customs control system by its roots as, in my opinion, there are serious operational problems.”
In the last five years, the articles on luxury car taxes have been amended four times. The definition of “luxury vehicle” was added in the first amendment to law no. 141/2015, which included 4 + 1 cars that had a cylinder capacity equal to or exceeding 3000 cm3 and a price value equal to or higher than 7 million ALL (61.000 $). A year later, the government increased the annual tax on these cars by lowering the price limit from 7 to 5 million ALL (61.000 – 44.000 $), and in November 2017, 6 + 1 vehicles were also added to this category. Since January 2020, the government has reduced the level of taxation for luxury cars by 10% for each year of vehicle depreciation.
The increase in luxury car tax increased their imports – as the government pointed out – but it also had a boomerang effect bringing about an increase of smuggling, corruption and other illegal forms throughout the chain, from customs clearance to registration and sale of the vehicle.
But the financial damage of millions of dollars that smugglers, who roam freely, cause to the state is still being paid through fines by victim of contraband. These people, whose names have been used unfairly, remain trapped in this luxury car traffic scheme.