Yesterday we and our 6-year-old daughter visited the Carnaval parade in our hometown. Our daughter was flabbergasted by a simple magic trick with a piece of rope that one of the participants of the parade conducted. At home I told my daughter that the trick was quite straightforward, and that there are more difficult tricks that one can understand how the performer can pull them off. And that once there was one trick in particular that still intrigues me although years have gone by since I saw it on TV for the first time. This is David Copperfield’s trick in which he makes an airplane disappear. Funny enough a day later I read the following press release that the Austrian Ministry of Finance issued on February 23, 2017.
“Austrian Ministry of Finance/Customs: Aircraft smuggling uncovered
Offshore aircraft registration aimed at tax evasion – customs duty paid following seizure
In the summer of 2016, customs investigators from the Eisenstadt Customs Office at Vienna Airport uncovered an unusual case of smuggling.
A business jet of the type "Falcon 7X" was moved by a pilot to various destinations, including Vienna, where the attention of customs investigators at Vienna Airport was drawn to the plane. During a check by customs investigators immediately after landing in Vienna, doubts arose as to whether the aircraft had been imported legally. As a result, investigations were commenced, and these confirmed the initial suspicion that the aircraft was being used in the European Union without duty being paid.
Customs investigators discovered that the aircraft, having a value of approximately EUR 39 million, was initially exported from its country of manufacture, France, as a so-called tax-exempt consignment to Switzerland – as a third country. Subsequently, the aircraft was brought back into the EU via Tallin Airport in Estonia; there, however it was not registered for payment of customs duty.
Since the aircraft was first imported into the EU in Estonia, and due to the amount of the customs debt thereby arising, Estonia is responsible for collecting the duty owed. This totals approximately EUR 1 million. The commodity itself is liable for duties owed, and as a result, the aircraft had to be immediately confiscated. Although EUR 1 million in customs duty is no small amount, the measure taken had nothing to do with the amount of duty owed, but was in line with prescribed customs procedures.
Only after about a month, following discussions with the relevant public prosecutor, was the jet released and thus had its operating licence restored. This was possible because, in response to pressure from the Austrian customs administration, duty was paid on the aircraft in Estonia and documentary evidence showing payment of the duty owed was provided. In terms of criminal law, however, this matter is far from being settled. The further investigations of the customs authorities under the auspices of the public prosecutor's office have not yet been concluded.
The aircraft owner, a company with registered office in Belize (Central America), registered the aircraft in the Isle of Man. The Isle of Man lies in the Irish Sea between Ireland and Great Britain and is under the direct control of the British Crown. As a Crown dependency, it is neither part of the United Kingdom nor a British overseas territory, and neither is it a member of the European Union. However, it is part of EU customs territory, although it is considered a so-called tax haven used for purposes of tax avoidance.
Even though, in the debate surrounding tax avoidance and evasion, the registration of aircraft in so-called offshore territories does not take precedence, due to the high value of the commodities involved it appears to be an attractive context for fraudulent activities. Aircraft smuggling costs the EU States several million euro annually. For this reason, here too, it is necessary to ensure that customs duties are consistently collected.”
David Copperfield’s trick was more classy and certainly more impressive than the one described in the press release above. I hope we can all agree on that!
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