The EU’s top court has ruled the UK must repay Brussels for allowing fraudsters to flood the bloc with dumped imports of clothes and shoes from China and avoid paying 2 .7 billion euros in rights.
The European Court of Justice ruled on Tuesday that, while still a member state, the UK failed to fulfill its obligations under EU law to “apply effective or to enter in the accounts the correct amounts of customs duties” on imported Chinese goods.
The long-running case brought by the European Commission concerns imports between 2011 and 2017, which it says cost the EU €2.7 billion in lost customs duties and value added tax because that the UK has failed to prevent dumped goods from entering the single market.
But as part of its decision, the court ordered the commission to recalculate its claim of 2.7 billion euros in losses before awarding compensation. The court said the UK would be able to challenge the recalculation of losses.
Despite no longer being a member of the EU, the Brexit Withdrawal Agreement signed by Prime Minister Boris Johnson means the UK is still subject to the jurisdiction of the ECJ for any breaches of the law when he was part of the bloc.
The UK government has said it will review the judgment in full and respond in due course. “Throughout we have argued that we have taken reasonable and proportionate steps to tackle the fraud in question and that the commission grossly overestimated the scale and seriousness of the alleged fraud. The UK has always and continues to take customs fraud very seriously and is evolving its response as new threats emerge,” he said.
In its findings, the CJEU said the European Anti-Fraud Office had sent several messages to member states about the risk of “extreme undervaluation of imports of textiles and footwear from China by front companies registered in the sole purpose of giving the appearance of fraudulent transactions”. of legitimacy”.
Accordingly, he called on all States to monitor imports of these products, to carry out appropriate customs controls and to take adequate safeguard measures in the event of suspicion of artificially low prices. The office developed a risk assessment tool based on EU-wide data that produced a ‘lowest acceptable price’ to detect fraudulent assessments.
The commission claimed that Britain did not use this method, which meant that fraudulent imports had increased significantly given the “inadequacy of the controls carried out by the UK customs authorities”.
This encouraged the transfer of fraudulent operations from other Member States to the UK and led to Britain releasing the products for free circulation in the internal market and depriving the EU of a substantial part of the rights customs and VAT.