The European Union’s top court ruled against Britain on Tuesday, over a failure to properly impose custom controls on undervalued clothes and shoes imported from China and to fight fraud.
Britain, “should have taken account of the risk profiles and the types of customs control recommended,’’ an official press release from the European Court of Justice (ECJ) said.
The loss of customs revenue and Value Added Tax (VAT) to the EU stood at €2.7 billion ($2.9 billion), according to the European Commission.
The case related to when Britain was a member of the EU.
The ECJ however rejected the figure in the ruling and said the amount was not calculated to the required legal standard, according to the statement.
A new calculation was needed, and Britain faced a new EU fine as a result.
Between 2007 and 2015, the European Anti-Fraud Office (OLAF) warned EU member states about shell companies used to purchase textile and footwear imports from China at artificially low prices.
The EU fraud watchdog asked member states to take action and identified Britain as a major risk.
In 2011 and 2014, Britain, OLAF and the commission completed exercises to introduce greater checks.
However, according to the EU fraud watchdog, Britain failed to introduce EU-wide measures and use the lowest acceptable value for Chinese imports.
OLAF said Britain allowed the products to circulate freely in the EU single market and as a result deprived the commission of revenue of customs duties and VAT.
