OLAF proposes a €2bn fine on the U.K for failing to prosecute Chinese garment mafia

MICHAEL REYNOLDS

A file photograph dated 26 April 2007, shows workers producing clothing at a factory of Youngor Group Co. Ltd., in Ningbo, China. Youngor is the leading manufacturer of suits and shirts in China, exporting 900 million USD (660 million euros) of clothing in 2006. Chinese textile and clothing companies have seen tremendous growth since China joined the World Trade Organization (WTO) in 2001, followed by several trade disputes with the EU and USA. China has been the world's leading producer of textiles and garments since 1994, accounting for about 20 percent of the global market. Garment exports alone are valued at one-eighth of the nation's foreign trade.

OLAF proposes a €2bn fine on the U.K for failing to prosecute Chinese garment mafia


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The EU’s Office de Lutte Anti-Fraud (OLAF) is recommending a €2bn fine for the failure of U.K Customs to crack down on criminal gangs importing clothes from China to the Single Market via the EU.

The final decision on the matter rests with the European Commission.

OLAF believes the U.K has systematically failed to charge duties on garments from China, allowing fraudsters to get away with false invoices from 2013 to 2016. OLAF estimates that 79.2% of the estimated €817.2m lost in customs duties came through the UK, which has become a “significant hub” for undervaluation fraud.

According to the EU agency, HM Revenue & Customs (HMRC) continues to ignore EU authorities and fail to impose duties. “These losses to the EU budget are still on-going,” OLAF’s statement reads.

Customs duties are one of the key sources of revenue for the EU budget.

Speaking to Sky News, Her Majesty’s Revenue and Customs said that the agency “has a very strong track record for tackling fraud and rule breaking of all kinds, securing more than £26.6bn last year alone and no one should be in any doubt that we are responding to the threat of fraud.”

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