The European Court of Justice has imposed a substantial charge of two billion euros (£1.7 billion), after it ruled that the UK allowed criminal gangs to flood European markets with cheap Chinese-made clothes and shoes.
According to The Guardian newspaper, the EU’s highest court ruled that the UK had been negligent, and upheld a claim from the European Commission that the UK should pay the money it failed to collect due to import fraud.
Under the withdrawal agreement, the UK remains subject to ECJ jurisdiction for any breaches of EU law during its time as a member state. The European Commission has been seeking since 2018 to force the UK to pay more than €2bn (£1.7bn) in compensation to the EU budget.
The complaint emerged in 2017, when the EU’s anti-fraud office said British authorities had allowed criminals to evade customs duties by making false claims about clothes and shoes imported from China. It found that more than half of all textiles and footwear imported into the UK from China were below “the lowest acceptable prices”.
No right of appeal
The EU executive estimated that the EU budget lost 2.7 billion euros from 2011 to 2017 and there were additional potential losses of value-added tax. All EU members were liable for such financial consequences, it said.
The Guardian story added that the UK cannot appeal against this final verdict but has the right to challenge the commission over how much money it should pay into the EU budget, once a revised bill is published. The Government has also been ordered to pay four-fifths of the commission’s legal costs.
A UK Government spokesperson said they would consider the judgment and respond in full in due course, adding: “Throughout, we’ve made the case that we took reasonable and proportionate steps to tackle fraud in question and that the Commission vastly overstated the size and severity of the alleged fraud.
“The UK has always and continues to take customs fraud very seriously and evolves its response as new threats emerge.”
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