UK settles China import row, pays EU $2.8 billion

The United Kingdom government has made a payment of $2.8 billion to the European Union to settle the long-standing dispute over footwear and textiles imported into the UK from China.

This week, the final payment of $1.33 billion will be made by the government, bringing the case to a close.

Chief secretary to the Treasury John Glen, in a written statement to the Commons, confirmed the payment.

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“Whilst the UK has now left the European Union and this is a legacy matter from before our departure, the government is keen to resolve this long-running case once and for all and is committed to fulfilling its international obligations,” he said while addressing the MPs.

Glen added that the final bill represented the interest which is due on the “principal amounts paid” and would “draw a line” under the dispute.

The case started in 2017 when the anti-fraud office of the European Union said that criminals were allowed by the British authorities to evade customs duties after they made false claims about shoes and clothes imported from China.

It was also discovered that more than half of all footwear and textiles imported from China to the UK were below “the lowest acceptable prices”.

“The UK has argued throughout the case that it took appropriate steps to counter the fraud in question. However, since these infringement proceedings were raised, the UK has taken proportionate and increased steps to combat this fraud without impacting legitimate trade, including by liquidating suspect traders through enforcement action," Glen said.

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“The UK takes a comprehensive and dynamic approach to tackling customs fraud risk and evolves its responses as any new potential threats emerge," he added.

Speaking to the MPs, he said that “throughout this process the government has also been conscious of the risk of further protracted legal proceedings, which could open UK taxpayers to not only a larger principal bill but also continued substantial interest accrual”.

(With inputs from agencies)

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