"Carousel" Fraud - Ovidiu Ioan Santa

Organized crime groups receive significant revenues from illicit activities, such as illicit trafficking in narcotics, weapons, ammunition and explosives, trafficking in human beings, fraudulent bankruptcy crimes and, last but not least, substantial incomes from economic and financial macro-crime, banking and ending with the huge profits generated by the “CAROUSEL” fraud.

All this income from illicit activities is “stored” in the accounts of the underground economy, and some of it will then take the path to financing terrorist acts. Nevertheless, reality demonstrates that, at present, the "CAROUSEL" fraud, a component of tax fraud, is far from being properly and completely perceived as a "financier" of terrorism, so that the mechanisms designed to prevent, discovery and combat it are somewhat inadequate.

If, at the beginning, the "CAROUSEL" fraud focused on "community trade" with tangible goods (mainly high-value products such as mobile phones, computer processors and precious metals), it has recently migrated to intangible goods (i. e. CO2 certificates, natural gas and electricity), making it "faster" and more and more difficult to discover. The circumvention of taxpayers with the "help" of the "CAROUSEL" fraud from paying VAT, as well as obtaining without right sums of money as reimbursements, can endanger the financial security of the rule of law, adversely affecting both the national budget and the EU budget through the “domino effect”.

Through such a complex mechanism, not only a part of the necessary funds for the terrorist groups to accomplish their bloody attacks is obtained, but at the same time, the power 2 One of the most renowned tax theorists. Source: Alan Anderson Tait, quoted by Alan Schenk and Oliver Oldman in Value Added Tax: A Comparative Approach, Cambridge University Press, p. 1. of the economy that "supports/finances" the actions of the institutions responsible for the prevention, discovery and fight against both organized crime and terrorism is diminished. In the content of this research, I will try to show that the "CAROUSEL" fraud is not just a "terrorist financier" with which some of the financial resources needed for terrorist groups are "generated" to organize, plan and complete terrorist attacks, but also a potential invisible "terrorist" that could endanger the safe operation of the electricity transport network, part of the national critical infrastructure.