Wrong Customs Qualification Applied By UK Authorities Led to Less Contribution To EU Budget And More Payments Other Member States To Make EU Budget
Brussels, 21 June 2012 – The European Commission is taking the UK to the EU Court of Justice over its refusal to compensate for duties its customs authorities failed to collect in the past – £15 million should have been paid to the EU budget.
The origins of the case date back to 2005/2006, when the UK customs authorities allowed imports of fresh garlic from the People’s Republic of China erroneously stating that it was frozen garlic, subject to significantly lower import duties than fresh garlic. The Commission considers that in failing to collect the correct amount, the UK authorities did not act with all due care. The UK authorities, however, have refused to compensate for the missing amount by claiming that the customs took all necessary actions justified by the case.
The European Commission is taking this legal action in order to protect the common EU interest. Fair treatment of all Member States must be ensured. If one Member State fails to deliver on its obligation to collect the common resources of the EU budget, the other Member States are forced to pay more as a result.
The case was revealed during an inspection by the European Anti-Fraud Office (OLAF) in July 2006. The UK authorities were invited to justify why they had issued authorizing documents for frozen garlic. The Commission subsequently concluded that the UK Customs did not act with due care. It then established the amount of compensation due for the uncollected EU budget resources and requested the UK to pay in January 2008. The continued failure to pay the amount due resulted in an infringement procedure being launched in 2010. Despite the Letter of Formal Notice and the Reasoned Opinion sent under Article 258 TFEU, the UK has upheld its refusal to pay the amount at stake.
Customs duties, which are charged on imports of goods from non-EU states to the common market, are collected by all Member States on behalf of the EU. 75% of the amount collected is paid to the common EU budget. This traditional own resource makes up approximately 15% of the income of the EU budget. Member States retain 25% of the amounts collected to cover collection costs.