The European Commission has decided to charge the UK £2.4 billion while claiming that the British government are turning a blind eye to customs fraud in-and-out of ports.
Before starting negotiations for Brexit, Olaf (the EU’s anti-fraud sector) have demanded that the British government hand this money over to cover the expenses due to the increased amount of fraud committed in and out of customs without being caught.
They have accused the British government of giving Chinese criminal gangs the authority to undervalue goods that have been imported into the EU from either Dover or Felixstowe, costing the EU trade industry billions in VAT that is to be paid to Brussels.
The EU has stated that Britain was informed over 10 years ago but never took the necessary action to resolve the situation, causing the massive loss in revenue.
In any other case this would be solved by a hearing at the European Court of Justice, but if the UK has certainly left the EU before a case can be set in motion this would become impossible. Due to Brexit, Brussels are likely to make this fine an additional term of their agreement in negotiating with the UK on terms to depart the EU. The European Commission will also be keeping on record that the UK cannot handle any form of “soft” custom borders following Brexit in the hopes that it will lower their loss in revenue when trading with the UK.
UK officials have stated they do not agree or acknowledge any involvement with the data given by the commission and that any dispute or findings found could be merely an estimate and cannot warrant an additional term for Brexit without solid evidence.
“We do not recognise the European Commission’s estimate of alleged duty loss,” a spokesman said.
“Their estimate is based on EU average prices and fails to take account of the substantial growth in the low-value end of the UK clothing market. Legitimate UK imports will in many cases have a price per kilogram below the EU average price.”
Research by The Times found that crime gangs in Britain have not only doubled, but also that many of those gangs operate on an international scale shipping into Europe from ports such as Dover or Felixstowe. Many of these shipments include suspicious items such as clothing and footwear imported through the UK from China.
During the research investigators found that many gangs would choose to stay in the UK because imported goods are much easier declared for lower values. Olaf stated the average value declared for women’s cotton trousers came in at €0.91 per KG, compared to the EU’s average: €26.09. Duty was charged at 12% of the declared value, meaning gangs and fraudsters could make a hefty amount of money by working within the UK.
The Commission takes fraud very seriously, especially in this case, as many of these items are immediately re-exported to Europe. Within the data, it was also found that the amount of re-exported goods had increased nearly three times from 134 million kg in 2013 up to 353 million kg in 2016.
Chairwoman of the commons public accounts committee: Meg Hilier, stated that in 2017 she had questioned the National Adult Office demanding they investigate the issues of fraud within the UK and see that the regulations are being kept in check.
“HMRC needs to get on top of this because Britain is now seen by these crime gangs as the soft underbelly of Europe,” she said.