Italy Seizes $49 Million from DHL Unit in Labour Supply Probe

The Italian authorities have seized $49 million from DHL Express Italy, a subsidiary of the German logistics giant Deutsche Post, as part of an ongoing investigation into suspected VAT fraud and worker exploitation. The Milan Prosecutor's Office ordered the urgent preventive seizure of the funds, alleging that the company had used non-existent invoices related to labor supply contracts between 2019 and 2023 to circumvent tax and labor laws.

The investigation, led by prosecutors Paolo Storari and Valentina Mondovì, uncovered a complex scheme involving intermediaries acting as filters to create a front for cheap labor. This business model, which is common in Italy, facilitates the exploitation of workers and results in unfair competition. The Milan Prosecutor's Office has accused DHL Express Italy of using this mechanism to make false tax declarations, leading to significant losses for the state and situations of labor exploitation for the sole benefit of the client company.



This is not the first time that DHL has faced such allegations in Italy. In 2021, DHL Supply Chain Italy, another subsidiary of the group, was targeted in a probe with a seizure of over $20 million, confirmed by the Court of Cassation. Since then, several multimillion-dollar seizures have been carried out against logistics companies, large retailers, private security firms, and food industry companies like GLS, Schenker, Esselunga, BRT, Geodis, UPS, Bennet, GS, and others, totaling nearly $600 million.

DHL's management has confirmed that its Italian subsidiary is subject to checks by the authorities and that they are cooperating fully with the investigation. The company has stated that its service to customers is not affected by the seizure. However, the ongoing investigation and potential long-term implications for DHL's operations in Italy and its global reputation remain a concern for investors and stakeholders.

The seizure and investigation of DHL Express Italy have the potential to impact DHL's operations in Italy and its global reputation in the long term. The company will need to address these challenges effectively to mitigate the potential negative consequences and maintain its competitive position. Investors should closely monitor the situation and assess the potential impact on DHL's financial performance and stock price.