London Daily

Focus on the big picture.
Thursday, Jul 31, 2025

UK faces large EU bill over Chinese imports fraud

UK faces large EU bill over Chinese imports fraud

Court rules government failed to fulfil obligation to collect correct amount of customs duties and VAT
The British government faces paying a hefty charge to the EU after the European court of justice ruled it had been negligent in allowing criminal gangs to flood European markets with cheap Chinese-made clothes and shoes.

Publishing its final ruling on Tuesday, the court concluded that the UK as member state had “failed to fulfil its obligations” under EU law to combat fraud and collect the correct amount of customs duties and VAT on imported Chinese goods. The failures by HMRC date from 2011 to 2017.

Under the withdrawal agreement signed by Boris Johnson, the UK remains subject to ECJ jurisdiction for any breaches of EU law during its time as a member state. The European Commission has been seeking since 2018 to force the UK to pay more than €2bn (£1.7bn) in compensation to the EU budget.

The complaint emerged in 2017, when the EU’s anti-fraud office said British authorities had allowed criminals to evade customs duties by making false claims about clothes and shoes imported from China. It found that more than half of all textiles and footwear imported into the UK from China were below “the lowest acceptable prices”.

In a blow to the government, the EU’s highest court upheld the complaint, finding “that the United Kingdom has failed to fulfil its obligations under EU law by failing to apply effective customs control measures or to enter in the accounts the correct amounts of customs duties”.

It also said the British government had failed to provide EU officials with all the necessary information to calculate the amount of money owed.

But it was not a complete victory for the commission, which had claimed a €2.7bn payment from the UK government to cover the EU’s losses. The court said the commission’s calculations had not met the “requisite legal standard” and instructed EU officials to recalculate the losses based on recommendations in the judgment.

The UK cannot appeal against this final verdict but has the right to challenge the commission over how much money it should pay into the EU budget, once a revised bill is published. The British government has also been ordered to pay four-fifths of the commission’s legal costs.

The case emerged after a 2005 decision championed by the then EU trade commissioner, Peter Mandelson, to abolish quotas on textiles and clothing from all World Trade Organization countries, including China. In subsequent years, EU fraud officials became concerned that shell companies were using fake invoices that undervalued Chinese-made clothes and shoes. In 2014, the EU’s anti-fraud office launched Operation Snake to check import declarations, which included a method to calculate undervalued goods.

British customs officials declined to use the EU method, arguing it was counterproductive and disproportionate. In court, the UK defence team said its customs officers had done everything required to combat fraud, contending that EU law did not mandate any method to calculate undervalued goods. The government was supported by six member states: Belgium, Estonia, Greece, Latvia, Portugal and Slovakia.

The court, however, sided with EU officials, suggesting the UK should have used EU-wide method set out by the bloc’s anti-fraud office, Olaf.

In a statement, the court said: “According to Olaf, fraudulent imports were increasing significantly in the United Kingdom on account of the inadequate nature of the checks carried out by the United Kingdom customs authorities, encouraging the shift of fraudulent operations from other member states to the United Kingdom.”

A UK government spokesperson said they would consider the judgment and respond in full in due course, adding: “Throughout, we’ve made the case that we took reasonable and proportionate steps to tackle fraud in question and that the Commission vastly overstated the size and severity of the alleged fraud.

The UK has always and continues to take customs fraud very seriously and evolves its response as new threats emerge.”
Newsletter

Related Articles

0:00
0:00
Close
Former Judge Charged After Drunk Driving Crash Kills Comedian in Brazil
Jeff Bezos hasn’t paid a dollar in taxes for decades. He makes billions and pays $0 in taxes, LEGALLY
China Increases Use of Exit Bans Amid Rising U.S. Tensions
IMF Upgrades Global Growth Forecast as Weaker Dollar Supports Outlook
Procter & Gamble to Raise U.S. Prices to Offset One‑Billion‑Dollar Tariff Cost
House Republicans Move to Defund OECD Over Global Tax Dispute
Botswana Seeks Controlling Stake in De Beers as Anglo American Prepares Exit
Trump Administration Proposes Repeal of Obama‑Era Endangerment Finding, Dismantling Regulatory Basis for CO₂ Emissions Limits
France Opens Criminal Investigation into X Over Algorithm Manipulation Allegations
A family has been arrested in the UK for displaying the British flag
Mel Gibson refuses to work with Robert De Niro, saying, "Keep that woke clown away from me."
Trump Steamrolls EU in Landmark Trade Win: US–EU Trade Deal Imposes 15% Tariff on European Imports
ChatGPT CEO Sam Altman says people share personal info with ChatGPT but don’t know chats can be used as court evidence in legal cases.
The British propaganda channel BBC News lies again.
Deputy attorney general's second day of meeting with Ghislaine Maxwell has concluded
Controversial March in Switzerland Features Men Dressed in Nazi Uniforms
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
Thai Civilian Death Toll Rises to 12 in Cambodian Cross-Border Attacks
TSUNAMI: Trump Just Crossed the Rubicon—And There’s No Turning Back
Over 120 Criminal Cases Dismissed in Boston Amid Public Defender Shortage
UN's Top Court Declares Environmental Protection a Legal Obligation Under International Law
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
The Podcaster Who Accidentally Revealed He Earns Over $10 Million a Year
Trump Announces $550 Billion Japanese Investment and New Trade Agreements with Indonesia and the Philippines
US Treasury Secretary Calls for Institutional Review of Federal Reserve Amid AI‑Driven Growth Expectations
UK Government Considers Dropping Demand for Apple Encryption Backdoor
Severe Flooding in South Korea Claims Lives Amid Ongoing Rescue Operations
Japanese Man Discovers Family Connection Through DNA Testing After Decades of Separation
Russia Signals Openness to Ukraine Peace Talks Amid Escalating Drone Warfare
Switzerland Implements Ban on Mammography Screening
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
Pogacar Extends Dominance with Stage Fifteen Triumph at Tour de France
CEO Resigns Amid Controversy Over Relationship with HR Executive
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
NVIDIA Achieves $4 Trillion Valuation Amid AI Demand
US Revokes Visas of Brazilian Corrupted Judges Amid Fake Bolsonaro Investigation
U.S. Congress Approves Rescissions Act Cutting Federal Funding for NPR and PBS
North Korea Restricts Foreign Tourist Access to New Seaside Resort
Brazil's Supreme Court Imposes Radical Restrictions on Former President Bolsonaro
Centrist Criticism of von der Leyen Resurfaces as she Survives EU Confidence Vote
Judge Criticizes DOJ Over Secrecy in Dropping Charges Against Gang Leader
Apple Closes $16.5 Billion Tax Dispute With Ireland
Von der Leyen Faces Setback Over €2 Trillion EU Budget Proposal
UK and Germany Collaborate on Global Military Equipment Sales
Trump Plans Over 10% Tariffs on African and Caribbean Nations
Flying Taxi CEO Reclaims Billionaire Status After Stock Surge
Epstein Files Deepen Republican Party Divide
Zuckerberg Faces $8 Billion Privacy Lawsuit From Meta Shareholders
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
SpaceX Nears $400 Billion Valuation With New Share Sale
×