A €35 million VAT fraud case tied to essential food products has escalated as authorities in Cabo Verde execute sweeping asset seizures and interrogations linked to the criminal network’s money laundering operations. The action, requested by the European Public Prosecutor’s Office (EPPO) in Lisbon, brings the reach of European AML enforcement to West Africa, marking a significant moment in the battle against cross-border financial crime.

The investigation, code-named “Ambrosia,” follows a wave of indictments in Portugal targeting a syndicate accused of orchestrating complex VAT fraud through trading staple commodities, such as olive oil, cooking oil, and sugar. The case has now expanded into an international operation, with the EPPO collaborating with Cabo Verdean authorities to freeze suspected criminal assets and advance money laundering prosecutions.

The Focus Keyword: Money Laundering in International VAT Fraud Cases

European and African law enforcement agencies have increasingly focused on the money laundering dimension of VAT fraud, as criminal networks exploit international trade and regulatory gaps to move illicit proceeds. The “Ambrosia” case offers a prime example of how VAT carousel schemes can generate vast amounts of illicit funds, which are then laundered through property, front companies, and financial institutions in multiple jurisdictions.

In this instance, the proceeds of the VAT fraud—estimated at €35 million—were traced from Portugal to Cabo Verde, prompting coordinated searches and seizures. One of the most notable outcomes of the operation was the confiscation of a building on Sal island, valued at approximately €2.7 million, containing 21 apartments and two shops, along with another property. These assets were allegedly acquired with the illicit proceeds, reflecting the typical layering and integration stages of money laundering.

The criminal structure reportedly relied on manipulating supply chains of widely consumed goods, enabling the syndicate to claim false VAT refunds and launder proceeds through real estate investments. Such schemes, known as “carousel fraud,” exploit the differences in VAT treatment within the European Union, and criminals often look for safe havens outside the EU to move and conceal profits.

Combating this form of financial crime requires international cooperation, as demonstrated by the legal instruments invoked in this operation: the 2003 Portugal–Cabo Verde Judicial Cooperation Agreement, the United Nations Convention against Transnational Organized Crime, and the CPLP’s Convention on Mutual Legal Assistance in Criminal Matters. These frameworks enable authorities to pursue assets and suspects beyond national borders, disrupting money laundering networks and supporting asset recovery.

How EPPO and Cabo Verdean Authorities Coordinated the Enforcement Action

The operation in Cabo Verde was spearheaded by a prosecutor from the local Public Prosecutor’s Office, with tactical support from the Sal branch of the Judiciary Police and logistical assistance from the EPPO. This collaboration enabled real-time intelligence sharing and swift action, ensuring that suspected assets could be frozen before they could be dissipated or transferred to further jurisdictions.

Legal cooperation was grounded in established bilateral and multilateral agreements, which provided the necessary channels for mutual legal assistance and cross-border investigations. The presence of an EPPO case support officer ensured that the investigation aligned with EU evidentiary standards and protected the admissibility of seized evidence in potential future trials.

This operation illustrates the growing capacity of the EPPO to extend its reach beyond the European Union, particularly when dealing with countries linked by judicial cooperation agreements. It also highlights the increasing willingness of African jurisdictions, such as Cabo Verde, to engage with European counterparts in fighting transnational money laundering schemes. This cross-continental synergy is essential to countering sophisticated networks that exploit both EU and non-EU financial systems.

The presence of the EPPO in this context underscores the strategic role of supranational prosecution bodies in coordinating AML enforcement. By bridging gaps between national legal systems, the EPPO can ensure that key evidence is collected, suspects are prosecuted, and criminal proceeds are recovered, even when assets have been relocated abroad.

The Legal Context: AML, Asset Recovery, and International Judicial Cooperation

A case of this scale could not be pursued effectively without a robust legal architecture for AML enforcement and asset recovery. The main instruments enabling the Ambrosia investigation were:

• The United Nations Convention against Transnational Organized Crime (UNTOC), which sets standards for international cooperation in investigating, prosecuting, and punishing organized criminal activities, including money laundering.
• The Convention on Mutual Legal Assistance in Criminal Matters by the CPLP, which provides a legal foundation for sharing information, executing search warrants, and freezing assets across Portuguese-speaking countries.
• The bilateral Portugal–Cabo Verde Agreement on Legal and Judicial Cooperation, supporting direct operational collaboration, extradition, and evidence sharing.
• EU AML directives, particularly Directive (EU) 2018/1673 on combating money laundering by criminal law, which strengthens cross-border coordination and defines minimum standards for predicate offenses, including VAT fraud.

These legal instruments are critical not only for arresting suspects but also for tracing, freezing, and eventually confiscating assets obtained through criminal activity. By leveraging these frameworks, authorities in Portugal and Cabo Verde can jointly dismantle money laundering channels and deter future financial crime.

The investigation also spotlights the need for comprehensive AML frameworks in jurisdictions often considered outside the main focus of EU regulators. Cabo Verde’s active participation highlights both the risks faced by smaller jurisdictions—often targeted for their strategic location and perceived regulatory gaps—and their growing capabilities in AML enforcement.

Lessons Learned: Risk Factors and Compliance Implications for Financial Institutions

Financial institutions and compliance teams monitoring clients and transactions related to international trade, especially in the food commodities sector, should consider the risk factors underscored by the Ambrosia case. VAT fraud, when combined with cross-border trade, creates fertile ground for complex laundering schemes that can be difficult to detect without advanced monitoring.

Key risk indicators for such schemes include:

• Unusual trading patterns involving staple goods with high volumes and low margins.
• Frequent asset acquisitions in offshore or high-risk jurisdictions.
• Connections between clients and countries with limited regulatory oversight or recent history of money laundering concerns.
• Sudden influxes of capital into real estate or businesses unrelated to the client’s stated business activities.
• Layered transactions, where proceeds are routed through multiple companies or bank accounts in different countries before integration into the financial system.

For compliance officers, robust due diligence, transaction monitoring, and enhanced scrutiny of property purchases—particularly in countries connected to major trading partners—are essential. The involvement of a supranational body like the EPPO further emphasizes the growing trend toward international collaboration and intelligence sharing in the AML field.

The Ambrosia case also signals to the private sector the heightened expectations of both European and African authorities when it comes to proactive reporting and cooperation in suspected financial crime cases. Financial institutions operating in or with links to Cabo Verde, Portugal, or other CPLP countries should review their AML policies in light of recent developments and ensure full alignment with both EU and local legal requirements.

Key Takeaways for the Future of International AML Enforcement

Global law enforcement’s response to the Ambrosia VAT fraud network illustrates a decisive and coordinated approach to money laundering that transcends borders and traditional legal barriers. Authorities leveraged mutual legal assistance treaties, supranational prosecutorial resources, and cross-jurisdictional expertise to unravel a complex web of financial crime.

The ongoing evolution of money laundering techniques means that international cooperation, supported by a strong and traceable legal framework, remains indispensable. The Ambrosia case highlights how VAT fraud and trade-based laundering can undermine the integrity of financial markets, while also providing a blueprint for robust enforcement and asset recovery.

For compliance professionals and financial institutions, this investigation offers valuable lessons in identifying high-risk behaviors, understanding the global reach of modern AML enforcement, and preparing for the ever-increasing expectation of international collaboration in the fight against financial crime.

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Related Links

• European Public Prosecutor’s Office (EPPO) Official Site
• United Nations Convention against Transnational Organized Crime (UNTOC)
• CPLP Convention on Mutual Legal Assistance in Criminal Matters (in Portuguese)
• Portugal–Cabo Verde Judicial Cooperation Agreement (Official Government Portal)
• EU Directive 2018/1673 on combating money laundering by criminal law

Other FinCrime Central Articles About EPPO’s Actions Against VAT Fraud and Money Laundering

• 23 Convicted in €2.9B VAT Fraud as Part of EPPO’s Operation Admiral
• How OLAF and EPPO Uncovered a EUR 9.5 Million Fraud and Money Laundering Scheme
• Money Laundering Network Exposed in €520 Million Moby Dick VAT Fraud Scheme

Source: EPPO

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