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Government Targeted by Fraudsters and Counterfeiters During First COVID-19 Wave, Insider Claims

HMRC is investigating cases of fraud by health equipment importers, a procurement insider suggests

Prime Minister Boris Johnson in Stormont, Northern Ireland. Photo: Number 10 Downing Street

Government Targeted byFraudsters and CounterfeitersDuring First COVID-19 Wave, Claims Insider

HMRC is investigating cases of fraud by health equipment importers, a procurement insider suggests

The Government is investigating multiple cases of fraud, associated with the supply of personal protective equipment (PPE) during the first wave of the Coronavirus pandemic, a procurement insider has told Byline Times.

Under HMRC’s Net Importer Relief Unit (NIRU) scheme, companies that import goods for use by the public sector don’t have to pay import duties. However, according to an individual with knowledge of the process, some firms used this scheme fraudulently to import goods cheaply, before selling them commercially.

The insider claims that HMRC’s fraud unit has launched an audit to uncover those who exploited the system. HMRC refused to confirm or deny to Byline Times that an investigation is taking place.

This wasn’t the only form of fraud faced by the Government, according to the insider.

The UK opted out of the EU’s large-scale PPE procurement scheme early in 2020 and had to buy all of its supplies on the global market. The Government was therefore more exposed to producers selling counterfeit goods, who saw an opportunity to exploit the UK’s inexperience and haste, according to the insider.

The Government also apparently lacked the specialist procurement teams to purchase such a high volume of goods on the international market – with the insider claiming that the British Embassy in Beijing had to step in and procure supplies alongside the Department of Health and Social Care, with numerous firms acting as intermediaries.

The counterfeiters allegedly took advantage of this confusion and passed themselves off as agents working for genuine healthcare suppliers, acquiring PDF certificates and product information, and sending these around to potential customers.

According to the insider, factories eventually had to put landing pages on their websites, warning customers about the external firms attempting to counterfeit their goods. The Chinese Government was apparently forced to pass two new laws listing the factories that were permitted to export PPE, specified by product.

History Poised to Repeat?

The UK’s PPE procurement pandemonium was the subject of a British Medical Journal article by Professor Martin McKee in July.

He noted that “hard-pressed procurement staff failed to do the most basic due diligence procedures, such as checking whether the company had filed accounts, had assets, or had any experience in what it claimed it could do”.

Indeed, Byline Times has revealed multiple contracts that fit this pattern, including those awarded to a 44 day-old firm, a dormant company, and a small luxury packaging supplier. That is on top of the £364 million worth of deals given to companies with links to the Conservative Party.

The vast majority of these deals were awarded without normal EU competition requirements, due to the urgency of the pandemic. As Professor McKee notes, Downing Street chief advisor Dominic Cummings wants to be free from such EU regulations after the UK flies the figurative nest of the EU transition period. Can we expect a similar PPE shambles to continue for years to come?

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