BRUSSELS -The European Union’s top court ruled against Britain on Tuesday, upholding a claim from the European Commission that the former EU member should pay the billions of euros it failed to collect due to import fraud.
The Commission complained that importers into Britain evaded a large number of customs duties with false invoices and artificially low value declarations for Chinese textiles and footwear.
The EU executive estimated the EU budget lost 2.7 billion euros ($2.9 billion) 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 Court of Justice of the European Union said Britain had failed to adopt measures necessary to combat fraud and so had not fulfilled its custom collection obligations. It had also failed to provide the Commission with the necessary information to calculate the amount due.
The court did say the Commission would need to recalculate the losses to the EU budget. Its calculations were reliable for part of the period covered, but it had not established the full amount to the requisite legal standard.
The Commission argued that, despite warnings about the risk of fraud, Britain failed to put in place necessary controls to prevent undervalued goods from entering the EU single market.
While other EU countries heeded the warnings, the Commission argued, Britain did not and so attracted more undervalued trade, therefore incurring “exceptionally high losses.”
Britain, which left the EU at the end of January 2020, said it had made the case that it took reasonable and proportionate steps to tackle the fraud in question and that the Commission vastly overstated its size and severity.
“The UK has always and continues to take customs fraud very seriously and evolves it’s response as new threats emerge,” a government spokesperson said.
($1 = 0.9170 euros)