EU launches €2bn claim against UK over China customs fraud

Brussels has launched a process to recover nearly €2bn from the UK for failing to crackdown on customs fraud by Chinese clothing importers. The European Commission sent London a formal notice on Thursday that the UK must pay customs duties lost on undervalued Chinese textiles and clothing brought into the bloc through Britain between November 2011- December 2017. [Despite having been informed of the risks of fraud relating to the importation of textiles and footwear originating in the People's Republic of China since 2007, and despite having been asked to take appropriate risk control measures, the United Kingdom failed to take action to prevent the fraud," said the commission in a statement on Thursday. EU officials calculated that the UK`s failure to act resulted in EU budget losses of €2.7bn, or nearly €2bn after collection costs. A three-year long investigation by OLAF, the EU`s anti-fraud office, accused the UK of failing to act on repeated warnings since 2007 that some Chinese importers were escaping customs duties on the textile imports by using fictitious and false invoices and declaring the items to be worth a fraction of their true value. OLAF passed their findings to the Commission one year ago and formally recommended that the EU recover the lost duties that it estimated at almost €2bn. Britain has two months to respond with its arguments, after which EU officials will take a decision. If London fails to comply with that decision, the commission can refer the matter to the European Court of Justice.