WIREDGOV

The EC has decided to send a letter of formal notice to the United Kingdom because it refuses to make customs duties available to the EU budget, as required by EU law.

A 2017 OLAF report found that importers in the UK evaded a large amount of customs duties by using fictitious and false invoices and incorrect customs value declarations at importation.  Further EC inspections brought to light a dramatic increase of the scale of that undervaluation fraud scheme operating through the hub in the United Kingdom between 2011 and 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 UK failed to take action to prevent the fraud.

The EC calculates that the infringement of EU legislation by the UK resulted in losses to the EU budget amounting to €2.7bn (minus collection costs) during the period November 2011 until December 2017. In addition, the UK also infringed EU Value Added Tax legislation, leading to potential losses to the EU budget. The UK is liable for the financial consequences of its infringements of EU legislation.