Italian police carried out raids and seizures at two Amazon sites in Italy on Monday, November 24 as part of an investigation into suspected smuggling of Chinese goods. The Milan prosecutor accused the e-commerce giant of acting as a “Trojan horse,” allowing a large quantity of Chinese goods to bypass customs duties and sales taxes, illegally entering the European Union and Italian markets.
According to reports from media outlets including Reuters, dozens of financial police and customs officials participated in the operation. At the Amazon logistics center in Cividate al Piano, located in the northern province of Bergamo, authorities seized around 5,000 Chinese products, including toys, phone cases, air fryers, ink pens, and small scissors.
Simultaneously, at Amazon’s Italian headquarters in the center of Milan, police confiscated IT equipment and identified one of the individuals accused of involvement in the new smuggling case – the manager responsible for Amazon’s domestic transportation of goods in Italy, whose identity has not been disclosed.
The smuggling investigation stemmed from a suspected €1.2 billion (approximately $1.29 billion) tax fraud case. The prosecutor likened Amazon to a “Trojan horse,” facilitating the secret entry of a large quantity of untaxed Chinese goods into the Italian market through a “backdoor.”
The new case is jointly led by the Milan prosecutor and the financial police station in Monza, charging dozens of Italian companies (many believed to be shell companies of Chinese entities) and the manager in charge of Amazon’s goods transportation with smuggling offenses. Investigators suspect that these goods were brought into the EU from China through undisclosed channels, then entered Italy, evading the required sales tax or customs duties. The products were subsequently transferred and sold through the Amazon platform. The Milan prosecutor is investigating both the implicated companies and manager for smuggling, as well as Amazon’s platform for alleged violations of EU customs laws.
In the previous €1.2 billion tax evasion case, prosecutors investigated Amazon’s European division in Luxembourg for suspected tax fraud between 2019 and 2021. The investigation revealed that Amazon’s algorithm allowed them to sell goods from non-EU sources (mainly China) in Italy without disclosing the sellers’ identities, aiding them in evading payment of Italian sales tax. According to Italian law, intermediary organizations providing sales platforms for non-EU sellers are jointly responsible for unpaid sales tax.
Due to the complexity of managing the flow of goods in e-commerce logistics centers, sources told Reuters that authorities anticipate the total number of involved products could reach up to 500,000, potentially expanding this investigation across the entire EU.
In July, the Milan prosecutor was summoned to the headquarters of the European Judicial Cooperation Agency (Eurojust), presenting their investigation scope to counterparts in several EU countries including Germany, France, the Netherlands, Poland, Spain, Belgium, Sweden, and Ireland.
Amazon’s tax situation has also drawn attention from the European Public Prosecutor’s Office (EPPO). Following new EU regulations, EPPO has commenced a review of Amazon’s accounts from 2021 to 2024.
Amazon stated in a previous announcement to Reuters that the company is “committed to complying with all applicable tax laws.”
Regarding the €1.2 billion tax evasion case, the Italian tax authorities have submitted a settlement proposal, with Amazon required to make a decision by December.