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Industrial Policy

Top EU court slams UK in Chinese fraud case but rejects Brussels’ bill

LONDON — European judges sided with the EU over a claim that the U.K. allowed Chinese clothes to be dumped in the single market — but ordered Brussels to recalculate its bill for damages.

The Court of Justice of the European Union said Britain had “failed to fulfil its obligations under EU law” between 2011 and 2014, while it was still an EU member.

Brussels had taken action to protect against Chinese clothing and footwear which was being imported to the bloc at cut-down prices and undercutting domestic producers.

But Britain failed to conduct the relevant customs checks to counteract the practice and had not implemented a minimum price for imported items. The case, first reported by POLITICO in 2017, has helped to poison Brexit negotiations.

The EU slapped the U.K. with a €2.7 billion bill to make up for calculated losses, which London has refused to stump up.

In a ruling Tuesday, the CJEU agreed with the European Commission that the U.K. should have done more to counter the Chinese goods imports and collect the right duties in a bid to control the trade.

But it said the EU had not calculated the resulting losses using the correct method, so ordered Brussels to re-do its calculation.

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