The European Court of Justice (ECJ) has fined Britain €32 million over a failure to stop private pleasure boats using marked fuel, in a ruling that sets a precedent for large fines if European Union law is breached in Northern Ireland in the future.
The case concerned leisure craft using dyed fuel, which is coloured to identify gas that has been taxed at a lower rate, as allowed for commercial boats but not for pleasure craft under EU law.
A ruling in 2018 found Britain had breached EU law on the issue, but the judgment was not complied with, leading the European Commission to ask the ECJ to impose fines on Britain for noncompliance.
The court ruled on Thursday that there had been a period of noncompliance by Britain in 2020 while it was in its Brexit “transition period”, at a time it had left the EU but its law continued to apply in all of the UK.
From January 1st, 2021, there was a period of noncompliance when Northern Ireland alone was subject to the EU law, under post-Brexit agreements that kept it in line with the single market to avoid a hard border while the rest of the UK diverged.
The court rejected arguments by Britain’s lawyers that fines should be reduced to below €250,000 because the UK had left the EU.
The ruling is significant because it may set a precedent for large fines for Britain if there are breaches of the EU laws that continue to be in force in Northern Ireland under post-Brexit arrangements.
The ECJ rejected an argument put forward by lawyers for the British state that the fine should be set in proportion with the size of Northern Ireland’s economy alone, and not Britain’s overall GDP.
A fine that only took into account the GDP of Northern Ireland “would not be sufficiently dissuasive and therefore would not make it possible to achieve the aim of effectively preventing the repetition of similar infringements of EU law in the future”, the court ruled, according to an ECJ statement.
In addition, the court noted that it “is the United Kingdom’s authorities and not those of Northern Ireland which are responsible for the proper application of EU law in Northern Ireland”.
“It is therefore appropriate to take into account the GDP of the United Kingdom as a whole for the entire period of the infringement for the purpose of determining its ability to pay,” the court found.
The ECJ’s advocate general Anthony Collins, whose role is to give an influential but non-binding opinion to the court on the cases it considers, had previously recommended that the court disregard the arguments given by Britain that the fine should be in proportion to the size of Northern Ireland’s economy alone.
He had also argued that contrary to Britain’s argument that the fine should be lower because it had left the EU, a greater lump sum fine would now be needed “in order to achieve a sufficient deterrent effect”.
Mr Collins had recommended a fine of €17 million, but the court ultimately chose to impose a larger amount of €32 million.