// EU Court of Justice finds that the UK “failed to fulfil” its obligations under EU law to combat fraud and collect the correct amount of customs duties and VAT
// The failures date from 2011 to 2017, when the UK was a member of the European Union
The UK faces a hefty fine from Brussels after it was ruled that it was negligent in allowing EU markets to be flooded with cheap Chinese-made clothes and shoes.
The European Court of Justice ruled that the UK “failed to fulfil” its obligations under EU law to combat fraud and collect the correct amount of customs duties and VAT relating to undervalued imports of textiles and footwear from China.
The court ruled on Tuesday that the UK had “failed to fulfil its obligation under EU legislation on control and supervision in relation to the recovery of own resources under EU legislation on customs duty and VAT”.
The failures date from 2011 to 2017, when the UK was a member of the European Union.
The ruling stems from a complaint made by the European Anti-Fraud Office (OLAF) which said the UK did not follow recommendations to reduce the amount of undervalued footwear and textile imported from China to be sold on the European market.
In 2007, 2009 and 2015, the European Anti-Fraud Office (OLAF) asked member states to monitor imports, carry out customs checks and “take adequate safeguarding measures” relating to textile and footwear goods sold from China by shell companies – companies that exist only on paper and have not offices or employees to help reduce the amount of footwear and textile items sold which were not subject to the appropriate customs controls.
However, it said the UK released products for sale without conducting appropriate customs controls.
As a result, a “substantial proportion” of the customs duties due were not collected or made available to the European Commission.
The court also ruled that the UK government had not provided EU officials with the necessary information to calculate the amount of money owed.
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