A court in Bruges sentenced a transport operator for running a letterbox company in Slovakia. The fine for the Belgian letterbox company amounts to €661,000.
According to the Belgian transport portal transportmedia.be, the head of DV Trans of Hooglede, David V., heard the verdict in the criminal court in Bruges. The Belgian entrepreneur set up a letterbox company in Bratislava in order to avoid having to pay social security contributions in Belgium.
The carrier was sentenced to 12 months’ suspended prison.
We came to the conclusion that it was a letterbox company. There were no employees in the offices at 12/A Hattalova Street, and the post was collected there by someone who ‘served’ several transport companies. The address where the company was previously registered in Bratislava was an empty office. This is an obvious case of social dumping!” says Frank Moreels, head of the Belgian union BTB Road Transport and Logistics for transportmedia.be.
The Belgian authorities have proved that, despite its headquarters in Bratislava, DV Trans was actually carrying out transport operations from Hooglede. In total, from March 2016 to June 2017, 29 drivers of the ‘Slovak’ company carried out transports in the Benelux countries and France. The carrier was sentenced to a fine of €522,000 and an additional penalty of €139,000, as well as 12 months of suspended imprisonment.
Belgian letterbox companies
It’s not the only case where an operator is convicted of this type of misconduct. The Research Institute for Labour and Society at the Catholic University of Leuven published a report entitled “Economic analysis of the road transport sector in Belgium against the EU. Employers and workers in survival mode” at the end of 2018. According to the study, the largest number of letterbox companies are set up by carriers from Italy, the Netherlands, Spain, the UK and Belgium. Registering a company in countries with lower labour costs allows companies to make profits with lower margins, which is particularly important in the price-sensitive transport industry. The authors of the report have located offices in the Slovak capital where several hundred companies from abroad (including transport companies) are registered.
The judgment of the Belgian court clearly shows that the source of so-called social dumping in Europe is not where Brussels sees it. The fair competition on the EU market is mainly hindered by entrepreneurs setting up fictitious companies abroad only to reduce the costs of operations conducted de facto in their country. It was primarily the action of such carriers that drew the attention of the European Commission and the industry to the alleged ‘Eastern European social dumping’. It is against them that the provisions of the Mobility Package should be directed, and not against honest carriers who are more competitive than Western European companies.