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Within the EU 18 million T1 documents are issued annually. Each has an average duty and tax liability of Euro 24, 000. Each year Euro 432 billion of taxes and duties are channelled through the T1 system. An incidence of fraud of 0.2% has been calculated by the TIR system, meaning freight forwarders are liable for more than Euro 864 million each year.

The European Commission reckons that the financial impact of organised crime on each member state from 1994 to 1998 was in excess of Euro 75 billion.

The CT regime was designed in the 1960s for six countries with internal borders. Today, transit is organised by freight forwarders acting as intermediaries to a transaction in countries with no internal borders. In addition, customs budgets have been reduced in relative terms and customs authorities have not been able to keep pace with an increasing workload. All this points to the fact that the proliferation of fraud is directly related to the implementation of a frontier free EU.

The present system places the burden of preventing fraud onto the freight forwarders. The prevention of fraud takes expertise and time. Those freight forwarders acting unilaterally to stop the fraud have found that their ability to process the T1 form transactions has slowed down dramatically and the resulting costs, which they pass on to their customers, have increased dramatically too. This has resulted in customers shifting business to freight forwarders who are more trusting and less punctilious.

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