Gottex sued for customs duty evasion

According to the indictment Gottex was fully aware that the fabric was not manufactured in Turkey, Romania and Bulgaria and therefore was not duty-exempt
 
Gottex Models Ltd. the internationally renowned swimwear manufacturer, its former VP and deputy chief executive Meir Guer and purchasing director Eti Levy began their trial last week for VAT and customs duty evasion.
 
The Israel Tax Authority filed with the Rishon LeZion Magistrates Court an indictment against the swimsuit maker and two of its officers for evading NIS 6.1 million in import duties, including NIS 3.3 million in customs tax and another NIS 2.8 million in VAT.
 
According to the indictment, from 2003 until 2006 the company imported fabric to Turkey, Romania and Bulgaria that was allegedly manufactured in a third country, and had it cut and sewn in those countries. This allegedly was done to take advantage of bilateral trade agreements Israel had, at the time relevant to the claim, with these countries. At the time relevant to the claim the duty on imported swimwear was 12%.
 
The defendants are accused of importing bathing suits which were not fully manufactured in the three countries but only assembled in the above countries. Further according to the indictment Gottex was fully aware that the fabric was not manufactured in Turkey, Romania and Bulgaria and therefore was not duty-exempt under the various trade agreements. According with the indictment the company received invoices from the manufacturers that contained false declarations regarding the fabric's country of origin.
 
The Tax Authority claims that Gottex obtained false declarations from the factories that the goods were produced in the exporting countries, and that the company filed these declarations with the Tax Authority.