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ECJ Customs – C-213/19 (European Commission vs. UK and Nothern Ireland) – Judgment – UK undervalued imports from China between 2011 and 2017

On March 8, 2022, the ECJ issued its decision inthe case C-213/19 (European Commission vs. UK and Nothern Ireland).

Context: Failure of a Member State to fulfil obligations – Article 4(3) TEU – Article 310(6) and Article 325 TFEU – Own resources – Customs duties – Value added tax (VAT) – Protection of the financial interests of the European Union – Combating fraud – Principle of effectiveness – Obligation for Member States to make own resources available to the European Commission – Financial liability of Member States in the event of losses of own resources – Imports of textiles and footwear from China – Large-scale and systematic fraud – Organised crime – Missing importers – Customs value – Undervaluation – Taxable amount for VAT purposes – Lack of systematic customs controls based on risk analysis and carried out prior to the release of the goods concerned – No systematic provision of security – Method used to estimate the amount of traditional own resources losses in respect of imports presenting a significant risk of undervaluation – Statistical method based on the average price determined at EU level – Whether permissible


Decision

On those grounds, the Court (Grand Chamber) hereby:

1.      Declares that, by failing to enter in the accounts the correct amounts of customs duties and to make available the correct amount of traditional own resources in respect of certain imports of textiles and footwear from China, the United Kingdom of Great Britain and Northern Ireland has failed to fulfil its obligations under Articles 2 and 8 of Council Decision 2014/335/EU, Euratom of 26 May 2014 on the system of own resources of the European Union, Articles 2 and 8 of Council Decision 2007/436/EC, Euratom of 7 June 2007 on the system of the European Communities’ own resources, Articles 2, 6, 9, 10, 12 and 13 of Council Regulation (EU, Euratom) No 609/2014 of 26 May 2014 on the methods and procedure for making available the traditional, VAT and GNI-based own resources and on the measures to meet cash requirements, as amended by Council Regulation (EU, Euratom) 2016/804 of 17 May 2016, Articles 2, 6, 9, 10, 11 and 17 of Council Regulation (EC, Euratom) No 1150/2000 of 22 May 2000 implementing Decision 94/728/EC, Euratom on the system of the Communities’ own resources, as well as Article 105(3) of Regulation (EU) No 952/2013 of the European Parliament and of the Council of 9 October 2013 laying down the Union Customs Code, and Article 220(1) of Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code, as amended by Regulation (EC) No 648/2005 of the European Parliament and of the Council of 13 April 2005, as a consequence of its failure to fulfil its obligations under Article 325 TFEU, Article 46 of Regulation No 952/2013, Article 13 of Regulation No 2913/92, as amended by Regulation No 648/2005, Article 248(1) of Commission Regulation (EEC) No 2454/93 of 2 July 1993 laying down provisions for the implementation of Regulation No 2913/92, as amended by Commission Regulation (EC) No 3254/1994 of 19 December 1994, Article 244 of Commission Implementing Regulation (EU) 2015/2447 of 24 November 2015 laying down detailed rules for implementing certain provisions of Regulation No 952/2013, and Article 2(1)(d) and Articles 85 to 87 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, as amended by Council Directive 2009/69/EC of 25 June 2009;

and by failing to provide the European Commission with all the information necessary to determine the amount of traditional own resources losses, and by not providing as requested the reasons for the decisions cancelling the customs debts established, the United Kingdom of Great Britain and Northern Ireland has failed to fulfil its obligations under Article 4(3) TEU;

2.      Dismisses the action as to the remainder;

3.      Orders the United Kingdom of Great Britain and Northern Ireland to bear its own costs and to pay four fifths of the costs incurred by the European Commission;

4.      Orders the European Commission to bear one fifth of its own costs;

5.      Orders the Kingdom of Belgium, the Republic of Estonia, the Hellenic Republic, the Republic of Latvia, the Portuguese Republic and the Slovak Republic to bear their own costs.

 

Source

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