European Commission takes UK and Poland to task

Poland at centre of legal case over judges, while €2.7bn in duties demanded from UK

The European Court of Justice in Luxembourg. Photograph: Julien Warnand/EPA

The European Court of Justice in Luxembourg. Photograph: Julien Warnand/EPA

 

Poland and the UK were the targets over the weekend of two legal cases initiated by the European Commission, the timing of which will cause some political embarrassment in their respective capitals.

The Luxembourg-based European Court of Justice has been asked to rule on the legality of the early retirement of Polish judges and to order their temporary reappointment pending a decision of the court.

And London was sent a “reasoned opinion”, a preliminary to the lodging of a case in the court, demanding the payment to the EU budget of some €2.7 billion in allegedly evaded customs duties on clothes and footwear fraudulently imported from China. Member states are liable for the financial consequences of their infringements of EU law.

The UK is currently making the case that after Brexit it should be trusted to continue to collect customs duties for the EU on goods imported through it to the EU. The EU’s chief negotiator in the Brexit talks, Michel Barnier, insists that the EU cannot allow the subcontracting of its tax-raising operations to third parties.

The reference of the Polish case to the court for violations of the rule of law, specifically judicial independence, has been coming for some time. It echoes the disciplinary action initiated in parallel in the Council of Ministers under the Article 78 procedure of the EU treaties, which could result in the suspension of Poland’s voting rights – in that case, however, ultimately, Hungary has promised to back Warsaw and veto such action.

Judicial independence

In moving to next stage of the infringement process, the commission argues that the new Polish law lowering the retirement age of judges could force out as many as 27 of 72 supreme court judges, and is “at risk of creating serious and irreparable damage to judicial independence”.

The commission has also asked the court to order “interim measures” restoring the supreme court to its situation pre-April and has asked it to “expedite” hearing of the case.

The customs case involved an investigation by the EU’s anti-fraud unit, Olaf, of the importation through British ports of clothes and footwear from China between 2011 and 2017 using fictitious invoices and incorrect customs value declarations. This led, the commission says, to a “massive undervaluation” of imports.

The commission estimated losses to the EU tax authorities of €2.7 billion plus interest with additional losses, it says, to the VAT regime. The UK has two months to respond to the opinion before the case is lodged with the court.

A British government spokesperson said that “the UK does not accept liability for the alleged losses or recognise the estimate of alleged duty evaded. We take customs fraud very seriously and we continue to evolve our response as new threats emerge. HMRC [Revenue and Customs] has a very strong track record for tackling evasion and rule breaking of all kinds, generating a record £30.3 billion in 2017-18 alone in revenue that would otherwise have gone unpaid”.

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