EU system to tackle customs fraud

It is estimated that this type of fraud costs EU governments a staggering euro 4bn a year in lost revenues.

The new computer system, operational by 2008 with running costs of euro 4m a year, will connect 80,000 companies and individuals.

It is meant to prevent criminals evading excise duties through selling export-bound alcohol and cigarettes, by providing customs authorities with real-time information on consignments of alcohol and tobacco, enabling them to plan inspections in advance.

In addition to running costs, the system will also cost each members state euro 12m to set up. But officials say the overall cost will be less than 5% of tax revenue currently lost by EU governments.