Having produced its own bureaucracy, its own tariffs and a plan for its own currency, Europe's Common Market was bound to inspire its own kind of crime. That has now appeared in the form of a neat type of smuggling that Eurocrats call agro-fraud. The illegal activity costs the European Economic Community some $10,000,000 a year.
Agro-fraud was conceived by sharpies intelligent enough to understand the Common Market's crazily complex and loophole-perforated farm regulations. The ploy involves one or both of two operations: illegally claiming the subsidies paid by the EEC on exports of farm products to countries outside the Six, and dodging the EEC's stiff tariffs on imports. The subsidies* and tariffs are intended to equalize Common Market commodity prices with world prices, which are generally lower. In agro-fraud, the trick is to move products across borders under the wrong label.
Name of the Grain. Exports of top quality European wheat flour, for example, receive a subsidy equal to 80% of the world market price. Taking advantage of that, one enterprising German trader was convicted of making several hundred thousand dollars by exporting certified "finest wheat flour" to Switzerland and pocketing the subsidy. When EEC officials finally inspected a shipment, they discovered that the flour actually was a nonsubsidized mixture of cattle feed. Conversely, "cattle feed" imported into the Common Market duty-free often turns out to be a mixture of two high-tariff commodities, wheat flour and sugar.
Really sophisticated agro-frauders make profits both coming and going. Their aim is not to sell their products at all, but to keep them moving around in a circle, changing labels at each border as subsidies and tariffs dictate. One Antwerp grain dealer set some kind of agro record by shipping the same boatload of wheat back and forth between Antwerp and Rotterdam for days. The cargo was never unloaded, but simply relabeled with the name of a different kind of grain at each port.
Miraculous Mayonnaise. In a similar case, a German merchant is being tried in Hamburg on charges of illegally pocketing $8,000,000 in subsidies. His 500-ton cargo ships would load up with maize flour (30% subsidy), and in mid-sea they would turn around and head for home. Their expensive cargoes were reimported as cattle feed (no tariff), and the journey would begin all over again. Other revolving traders, according to EEC tariff sheriffs, export melted butter (100% subsidy) that on the return trip miraculously becomes mayonnaise (no tariff). All that is needed for the transformation is a new set of export certificates, because inspectors often do not check the cargoes.