The EU’s German budget chief Gunther Oettinger, on Monday, announced the Commission’s decision to send a ‘Reasoned Opinion’ to the UK as part of a formal infringement procedure in order to protect the bloc’s finances.
Britain now has two months to respond to the notice, which suggests an “infringement by the United Kingdom resulted in losses to the EU budget amounting to €2.7 billion (plus interest and minus collection costs) during the period between November 2011 and October 2017”.
A UK Government spokesman confirmed Britain does not accept liability for the alleged losses of funds after investigators found Britain had allowed a Chinese fraud network to evade paying the correct level of customs duties.
Anti-fraud body OLAF found British importers “evaded a large amount of customs duties by using fictitious and false invoices and incorrect value declarations at importation”.
The statement adds: “Further Commission inspections confirmed the very large scale of this undervaluation fraud scheme operating through British ports between 2011 and 2017.
“Despite having been informed of the risks of fraud relating to the imports of textiles and footwear originating from 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 effective action to prevent the fraud.”
In June, Westminster told Brussels that OLAF had overestimated the amount missing from its coffers because its figures were based on EU average prices and doesn’t take into account the large number of low value clothes entering the UK’s market.
On Monday, a Government spokesman responded: “The U.K. does not accept liability for the alleged losses or recognise the estimate of alleged duty evaded.
“We take customs fraud very seriously and we continue to evolve our response as new threats emerge.
“HMRC has a very strong track record for tackling evasion and rule breaking of all kinds, generating a record £30.3 billion in 2017-18 alone in revenue that would otherwise have gone unpaid.
“We will continue to work closely with the Commission and OLAF on customs fraud.”
The European Commission decided last week to send the warning, but postponed the announcement to avoid interfering with Brexit discussions at an EU summit in Austria on Wednesday and Thursday
OLAF’s investigation, which took place between 2014 and 2016, focused on the English ports of Dover and Felixstowe, which provide the main port of entry for Chinese footwear and textiles entering Europe.