Luxury Cars for the Price of a Bicycle: Cyprus Uncovers Multimillion-Euro Scheme Involving Vehicles from the UK

Thousands of cars, fictitious documents, millions in lost tax revenue and an investigation involving the European Public Prosecutor’s Office. Cyprus Customs believes the used-car market operated under a grey scheme for years.

Millions of euros bypassed the state budget

Cyprus is investigating one of the largest schemes in the used-car market. The Customs Department is examining the import of vehicles from the United Kingdom via the Netherlands and Bulgaria, which, according to preliminary estimates, may have cost the state budget millions of euros.

More than a thousand vehicles are already under investigation. Investigators believe their customs values were systematically understated during clearance, allowing substantial savings on duties and taxes. Falsified or altered documents have been identified in dozens of cases, and possibly in more than a hundred.

The investigation became known on 4 August. It involves the customs services of the Netherlands and Bulgaria, the European Public Prosecutor’s Office and OLAF — the EU’s anti-fraud office.

How the scheme worked

After Brexit, vehicles from the United Kingdom are subject to duties as imports from a third country. However, according to investigators, the cars were first brought into the Netherlands, where they were cleared at artificially understated values. The vehicles were then sent to Bulgaria, issued with EU documentation and subsequently imported into Cyprus as EU goods.

This is why the investigation has proved so complex: duties cannot be charged again in Cyprus, while the alleged breach legally occurred in the first country of entry into the European Union. Moreover, the authorities in those countries said the clearance had been carried out in accordance with their procedures.

Even a bicycle costs more

According to senior customs inspector Georgios Constantinou, some of the amounts stated in the declarations appeared absurdly low.

«These are prices for which you couldn’t even buy a bicycle today», — he said.

According to Customs, executive sedans and SUVs were sometimes valued at just one-fifth, and in some cases even one-twentieth, of their actual value.

More than taxes under suspicion

Customs is also examining whether the scheme was used to circumvent Cyprus’s ban on importing used cars more than five years old from third countries.

After being registered in Bulgaria, such vehicles formally became cars from an EU country and could enter the Cypriot market without hindrance.

What it means for the market

According to Customs, evading duties allows vehicles to be sold significantly more cheaply than official importers can offer them, creating unfair competition.

The checks have already led to delays of two to three months in clearing vehicles. At the same time, the United Kingdom remains one of the main suppliers of used cars to Cyprus.

If the suspicions are confirmed, the investigation could become one of the largest customs fraud cases in the island’s history.