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“Operation Calypso” and the Power of the European Public Prosecutor’s Office (EPPO)

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The headlines are dramatic: 2,435 seized containers, €800 million in tax damages, arrests in four countries. With Operation Calypso, the European Public Prosecutor’s Office (EPPO) has dealt one of the biggest blows to organized customs and tax fraud in EU history. At its core is a system allegedly run by Chinese networks that has been evading duties and VAT on an industrial scale for years.

But behind the staggering numbers and images of confiscated e-bikes and textiles lie complex legal questions—especially for businesses, freight forwarders, and importers suddenly in the crosshairs of investigators. As a criminal defense lawyer specializing in tax law and a commentator on the work of the European Public Prosecutor’s Office, I see this case not only as an example of effective law enforcement but also as a warning for everyone involved in international trade. Above all, the forfeiture of assets—a tool often wielded rigorously in such cases—poses significant risks but also offers potential for defense.

A Sophisticated Scheme: How Chinese Networks Defrauded the EU of Hundreds of Millions

The Port of Piraeus, one of Europe’s largest, was the epicenter of a criminal business model that had been operating for at least eight years. The method was simple yet effective: Goods like e-bikes, shoes, and textiles were imported from China into the EU, but only a fraction of their actual value was declared to customs. Instead of reporting 100 e-bikes in a container, perpetrators often listed just 10 or 15. This not only allowed them to evade anti-dumping duties imposed by the EU on cheap Chinese goods but also saved them millions in VAT. But that was just the beginning. The goods were funneled through a network of shell companies across various EU countries before ending up on the black market. The profits were laundered back to China through opaque channels, leaving European tax authorities empty-handed.

The scale of the fraud is staggering: The EPPO estimates total damages of at least €800 million, with €250 million from evaded duties and €450 million from unpaid VAT. Raids not only resulted in the seizure of containers but also €5.8 million in cash, luxury goods, and real estate. Particularly alarming: Among those arrested were two Greek customs officers alleged to have issued forged documents. This reveals the depth of complicity in the case—and how systematically the perpetrators operated.

But what initially appears to be a clear-cut case of organized crime raises existential questions for many of those involved who were not directly part of the mastermind operation. What happens to freight forwarders, warehouse operators, or traders who unknowingly became entangled in these structures? What does the seizure of goods and accounts mean for their businesses? And how can they fight back?

Asset Forfeiture: A Double-Edged Sword with Legal Gray Areas

A key tool for investigators in such cases is the forfeiture of assets. On the surface, this makes sense: What was obtained through crime should be taken back from the criminal. In practice, however, the distinction is often far from clear. German law differentiates between proceeds of crime (directly obtained from the offense), instrumentalities (items used to commit the crime), and objects of the offense (the goods themselves). In theory, only the proceeds of crime should be subject to unrestricted forfeiture. But in practice, authorities often take a blanket approach—endangering legitimate assets in the process.

This is where significant potential for defense lies. Courts often struggle to cleanly separate these categories. A freight forwarder who transported a container without knowing about the misdeclaration might suddenly face the forfeiture of their entire fleet. A warehouse operator who stored goods could lose their entire business because the prosecutor’s office classifies the goods as “objects of the offense.” Yet not everything connected to a crime can be forfeited. Defense attorneys frequently succeed in challenging such measures—for example, by proving that the client had no knowledge of the crime or that the forfeiture would be disproportionate.

The situation becomes even more critical when the European Public Prosecutor’s Office (EPPO) is involved. It has far-reaching powers and can freeze assets across borders. But even here, fundamental rights and procedural safeguards apply: The presumption of innocence must be upheld, and forfeiture must be proportionate. Those who take early legal action can often achieve partial successes—such as the release of accounts or goods not directly linked to the offense. In my commentaries on the EPPO’s work, I repeatedly emphasize how crucial it is to act immediately in such cases. Once assets are seized, getting them back is often an uphill battle.

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A Wake-Up Call for International Trade

Operation Calypso is a wake-up call. It demonstrates how determined the EU is to combat customs and tax fraud—and how quickly even uninvolved businesses can be caught in the crossfire. But it also presents an opportunity: Those who get their processes in order now and vigorously defend their rights when necessary can prevent the worst.

As a german defense attorney, I always advise my clients: Don’t wait until the prosecutor’s office is at your door. Preventive legal counsel can help minimize risks. And if you’re already under investigation, act immediately—before goods, accounts, or even your entire business are lost. The EPPO will continue to strike. But those who know the legal leeway don’t have to stand by helplessly. Balancing effective law enforcement with fair asset forfeiture remains one of the great challenges of the coming years. It is up to us as defense attorneys to ensure that the rule of law and proportionality are not lost in the process.

What Businesses and Importers Should Do Now

Operation Calypso is not an isolated case. The EPPO has signaled that it will pursue similar structures in other ports—such as Rotterdam or Hamburg. For businesses engaged in international trade, this means: The risks have increased. Those dealing with imports from China should urgently review their compliance processes. Are goods being declared correctly? Are there plausible records for the supply chain? Are customs brokers and freight forwarders being properly vetted? If not, they risk not only back taxes but also criminal investigations.

Even those already under investigation have options:

  • Request access to the case files to scrutinize the allegations.
  • Use the “third-party effect” argument: “I was just a service provider, not a perpetrator!”
  • Seek negotiated solutions, such as a voluntary disclosure in tax criminal law, to mitigate penalties.
  • Take legal action against excessive seizures.

Above all, anti-money laundering compliance will become even stricter. Companies should meticulously document transactions with China and avoid unusual payment flows. Those who cut corners here risk not only fines but also the loss of their entire assets.

German Lawyer Jens Ferner (Criminal Defense & IT-Law)
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