Italian police yesterday seized €556,000 in fake euro coins minted in China from a ship container in the port city of Naples, investigators said.

Palermo prosecutor Calogero Ferrara, who led the so-called “Shanghai Money” investigation, told reporters that this was the largest such seizure in the history of Europe’s common currency, which began circulating in 2002.

Carabinieri paramilitary police arrested 12 people, including four Chinese nationals, for conspiracy to produce and distribute counterfeit money, investigators said.

“They were high-quality fakes produced at a clandestine Chinese mint and ready to be put on the Italian market just before the Christmas spending rush,” read the arrest warrant seen by Reuters.

The 306,000 coins were in one- and two-euro denominations, according to Ferrara.

The two-euro coins are “a perfect product” that cannot be distinguished from an authentic coin with the naked eye, Ferrara said. The two-euro coins would even have worked in vending machines, he said, adding that the investigation is continuing.

Italy, and especially the area around Naples, is a hotbed for euro counterfeiting, but this is the first time that authorities said they had discovered fake euros made in China and shipped to the eurozone.

Italy’s top counterfeit investigator in Naples, Gerardo Marinelli, said in September that half of all fake bills in the 18-country eurozone come from the Naples area, according to estimates based on previously sequestered banknotes.

But counterfeits remain only a small fraction of currency circulating in the eurozone, the European Central Bank says.

In September, Italian finance police arrested a man who concealed a haul of forged €50 banknotes equivalent to €17 million in a van outside a shopping centre near Naples.