Milan claims Amazon smuggled Chinese goods into Italy, dodging tax duties

Italian police searched two Amazon locations on Monday, Nov. 24, as part of a major investigation into suspected tax and customs fraud. According to Reuters, authorities believe Amazon may have helped bring Chinese products into Italy without paying required taxes and duties. Officers seized about 5,000 items, including toys, phone covers, air fryers, and scissors, from a warehouse in Bergamo.

Police also visited Amazon's Milan headquarters, where they took computer equipment and identified the manager handling product movements. Amazon said it follows all tax laws and works with authorities, though it did not comment directly on the raids. Reuters reports that this investigation connects to a larger case involving 1.2 billion euros in suspected tax evasion.

Investigation could spread across Europe

Prosecutors think Chinese goods enter Europe and then move into Italy through hidden channels before being sold on Amazon's platform, which breaks EU customs rules. Sources tell Reuters that up to half a million products might be involved, with dozens of Italian companies participating in the scheme. Many of these companies may actually be fronts for Chinese businesses.

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The case is expected to expand beyond Italy to other European Union countries. In July, Milan prosecutors presented their findings to officials from Germany, France, the Netherlands, Poland, Spain, Belgium, Sweden, and Ireland at a meeting in The Hague.

Amazon stock rises despite legal troubles

Amazon's stock price increased nearly 2% on Monday morning, even with news of the police raids, Tipranks notes. Italian law requires sellers to pay import taxes on goods, and intermediaries like Amazon can be held responsible if sellers don't pay. Authorities have been investigating Amazon since 2021, according to Tipranks, and the total tax bill could reach 3 billion euros with penalties added. Analysts still rate Amazon stock as a "Strong Buy" with an average price target suggesting 34% growth potential.