Amazon faces Italy trial risk over alleged import VAT, customs breaches

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Amazon Italy VAT, customs case

Highlights

Prosecutors have served Amazon EU S.à r.l. and two managers with notice concluding an investigation into unpaid import VAT exceeding 3.52 million euros in Italy.
Authorities allege over 1.5 million non-EU products were sold via Amazon's network without proper import VAT and customs duties, with total evaded duties still being assessed.
Amazon warns that unpredictable regulation and legal action in Italy impact investment attractiveness, as the case forms part of wider e-commerce scrutiny throughout Europe.

Investigation advances after notice to suspects

As first reported by Reuters, Milan prosecutors have served a notice concluding their investigation on Luxembourg-based Amazon EU S.à r.l. under Italy's corporate liability law, as well as two managers, a procedural step that usually comes before a request for trial.

Prosecutors allege that more than 1.5 million products from outside the European Union were sold through Amazon's marketplace and fulfilment network in Italy without proper payment of import VAT and customs duties. They have so far quantified unpaid import VAT at more than 3.52 million euros, while customs authorities are still assessing the total duties allegedly evaded, meaning the overall claim may increase.

According to the document seen by Reuters, prosecutors argue that Amazon fails to put in place organisational measures capable of preventing customs offences and allows non-EU goods to circulate through its logistics network despite alleged irregularities in customs compliance. They also allege Amazon knows, or should reasonably know, that about 80% of the goods handled through its Italian logistics system originate in China, but does not carry out adequate checks on sellers, customs documentation and warehouse movements.

The notice, served on 70 suspects, further alleges that Amazon relies on automated logistics systems that do not have direct access in Italy to key seller identification data, which prosecutors say is held abroad. Prosecutors say the goods are stored in Amazon warehouses and sold through the company's marketplace and fulfilment network.

Broader e-commerce scrutiny and investment implications

Amazon says it is committed to complying with all applicable laws and regulations in every country where it operates and requires sellers on its marketplace to do the same. The company says it will vigorously defend its position in what it calls an ungrounded proceeding.

Amazon also says it is one of the largest foreign investors in Italy, with more than 19,000 permanent employees, and warns that unpredictable regulatory environments, disproportionate penalties and lengthy legal proceedings are increasingly affecting Italy's attractiveness as an investment destination.

The case forms part of a broader effort by Milan prosecutors and Italy's financial police to investigate alleged tax and customs violations linked to e-commerce imports from Asia. In November last year, police raided Amazon's Italian headquarters in Milan and a logistics hub near Bergamo, and prosecutors at the time said the suspected scheme could involve hundreds of thousands of products and potentially extend beyond Italy.

Judicial authorities from several European countries are later briefed on the inquiry through Eurojust, the European Union Agency for Criminal Justice Cooperation. Under Italian law, recipients of a notice concluding an investigation have the right to submit arguments, documents and evidence before prosecutors decide whether to seek a trial.

We have previously noted Malaysia’s push for tighter oversight of foreign product entry through a new inter-ministerial enforcement review.

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