The European Union is demanding £2.5bn in compensation from Britain for failing to apply customs rules to Chinese imports.
The Court of Justice of the European Union has ruled that the UK was “negligent” in applying EU customs and import rules between 2011 and 2017, which has led to lost revenues for the EU.
The bloc’s anti-fraud office, OLAF, argued that more than half of all shoes and clothes that were imported from China into the UK were undervalued. As a result, it demands the UK to cover the losses, according to a report in the Guardian.
The EU’s anti-fraud office, OLAF, claimed that more than half of the shoes and clothes exported from China to the UK during this period were undervalued and that the UK should now cover the losses.
The agency claimed that the method of calculating the value of the goods by British officials was “inadequate” and even led to a “shift of fraudulent operations other member states to the UK.”
The final number that will be demanded from the UK may differ slightly as the ECJ’s method to calculate the lost revenues was “incorrect,” according to Politico.
The Telegraph further reporter that the failure to fully apply the rules was a ‘sensitive’ issue because the bloc allowed the UK to police and enforce its own customs framework on the Irish Sea border as part oft he so-called Northern Ireland protocol.
Paul Woodward, a customs and trade specialist at the Institute of Export & International Trade, explained on his platform’s website that the ruling showed that “even countries can fall foul” of fraud in international trade and end up having to pay the cost.
He advised businesses to take note and ensure compliance with customs and VAT rules.
“The general rule is, if it is too good to be true, this is probably the case,” Woodward concluded.