EU starts proceedings against Britain over customs fraud

The European Commission demanded on Thursday that Britain pay 2.7 billion euros ($3.35 billion) of customs duties that should have been collected on Chinese imports of Chinese footwear and textiles but were not due to fraud.

The request, one of a number of European Union “infringement procedures” against EU countries announced on Thursday, said Britain had failed to address the scam between 2011 and 2017, even though it had been warned of the risks of fraud in 2007.

The letter of formal notice sent to Britain is the first in a series of steps that can result in countries being taken to the European Court of Justice.

“Importers in the United Kingdom evaded a large amount of customs duties by using fictitious and false invoices and incorrect customs value declarations at importation,” the Commission said in a statement.
The British government said in a statement it did not recognize the commission’s estimate of alleged duty loss.

“We will carefully examine the formal notice from the commission and respond in due course,” a government spokesman said.

The dispute over duties comes on top of already difficult talks with the EU over Britain’s decision to leave the bloc following its 2016 referendum.

Under EU rules, Brussels can claim a share of taxes on imported goods raised by EU countries. The proceeds go directly into the EU budget.

EU anti-fraud office OLAF had said last year that Britain should pay because it allowed the scam to go ahead.