By Emilio Parodi
MILAN, Nov 10 (Reuters) - Italian prosecutors have told Amazon's European unit and two senior managers they could face trial over the sale of Chinese goods without proper payment of import value-added tax and customs duties, according to a document seen by Reuters.
The notice concluding the Italian investigation, a procedural step that usually precedes a request for trial, was served on Luxembourg-based Amazon EU S.à.r.l. under Italy's corporate liability law, as well as the two managers.
Milan prosecutors allege that more than 1.5 million products from outside the European Union were sold through Amazon's marketplace and logistics network in Italy without the proper payment of import VAT and customs duties.
Prosecutors have so far quantified unpaid import VAT at more than €3.52 million ($3.95 million), while customs authorities are still calculating the total amount of duties allegedly evaded, meaning the overall claim could increase once that assessment is completed.
Amazon said it was "committed to complying with all applicable laws and regulations in every country where we operate and we require all sellers on our marketplace to do the same."
"We will vigorously defend our position in this ungrounded proceeding," the US company said.
It added that it was one of the largest foreign investors in Italy with more than 19,000 permanent employees and that "unpredictable regulatory environments, disproportionate penalties, and protracted legal proceedings are increasingly affecting Italy's attractiveness as an investment destination."
SEVENTY SUSPECTS NOTIFIED
The notice was served on 70 suspects, including Amazon, the two Amazon managers and scores of operators of online stores accused of importing mainly Chinese-made goods while bypassing customs declarations and import taxes.
The development is the latest step in an investigation first reported by Reuters in November last year, when police raided Amazon's Italian headquarters in Milan and a logistics hub near the city of Bergamo as part of a probe into suspected customs and tax fraud linked to Chinese imports.
At the time, prosecutors suspected Amazon had acted as a "Trojan horse" allowing Chinese goods to enter Italy without payment of customs duties and sales taxes.
According to the document, prosecutors argue that Amazon failed to implement organisational measures capable of preventing customs offences and allowed non-EU goods to circulate through its logistics network despite alleged irregularities in customs compliance.
Prosecutors allege that Amazon knew, or should reasonably have known, that around 80% of the goods handled through its Italian logistics system originated in China, but failed to carry out adequate checks on sellers, customs documentation and the movement of goods through its warehouses.
The notice alleges that Amazon relied on automated logistics systems that did not have direct access in Italy to key seller identification data, which prosecutors say was held abroad.
Prosecutors say the goods were stored in Amazon warehouses and sold through the company's marketplace and fulfilment network.
The case stems from a wider effort by Milan prosecutors and Italy's financial police to investigate alleged tax and customs violations linked to e-commerce imports from Asia.
Prosecutors in November last year estimated the scheme could involve hundreds of thousands of products and potentially extend beyond Italy.
Judicial authorities from several European countries were 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.($1 = 0.8908 euros)
(Reporting by Emilio Parodi, editing by Keith Weir)
