UK: Failure to apply customs control measures, imports of textiles and footwear from China (CJEU judgment)
Failing to adopt the measures necessary to combat fraud
Imports of textiles and footwear from China (CJEU judgment)
The Court of Justice of the European Union (CJEU) today issued its judgment holding that the UK failed to fulfil its obligations in relation to customs control and the availability of “EU own resources” by failing to adopt the measures necessary to combat fraud with regards to undervalued imports of textiles and footwear from China.
The case is: Commission v. United Kingdom, C-213/19 (8 March 2022)
Summary
As explained in a CJEU release [PDF 159 KB], the European Union (EU) in 2005 abolished all quotas on imports of textiles and clothing including from China. EU Member States were asked:
- To monitor their imports of such products
- To carry out appropriate customs checks
- To take adequate safeguard measures if there was any suspicion of artificially low invoiced prices
According to the European Anti-Fraud Office, fraudulent imports were increasing significantly in the UK due to the “inadequate nature” of the checks carried out by the UK customs authorities, encouraging the shift of fraudulent operations from other EU Member States to the UK. The UK did not follow European Anti-Fraud Office’s recommendations, releasing the products concerned for free circulation in the internal market without conducting appropriate customs controls, with the result that a substantial proportion of the customs duties due were not collected or made available to the European Commission.
Therefore, the Commission brought an action for a declaration that the UK had failed to fulfil its obligations under EU legislation on control and supervision in relation to the recovery of EU own resources and under EU legislation on customs duty and on value added tax (VAT).
By its judgment, the CJEU upheld the Commission’s action in part, ruling, in essence, that the UK 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 and accordingly to make available to the Commission the correct amount of traditional own resources in respect of certain imports of textiles and footwear from China
- Failing to provide the Commission with all the information necessary to calculate the amounts of duty and own resources remaining due
For more information on this topic or to learn more about KPMG’s Trade & Customs Services, contact:
Doug Zuvich |
John L. McLoughlin |
Andy Siciliano |
Steve Brotherton |
Luis (Lou) Abad |
Irina Vaysfeld |
Amie Ahanchian |
Christopher Young |
Gisele Belotto |
George Zaharatos |
Andy Doornaert |
Jessica Libby Principal T: 612-305-5533 E: jlibby@kpmg.com |
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.