Held, action allowed in part. (1) It was for the customs authorities of the member states to ensure that EU customs law was applied and to undertake appropriate customs controls in order to protect the EU’s financial interests. Those authorities had to work continuously, consistently and systematically, not limited to occasional participation in customs operations. In order to combat infringements liable to impede the collection of traditional own resources constituted by customs duties, the member states had to provide for adequate criminal penalties for serious fraud, as well as effective and dissuasive customs control measures which could not be determined in an abstract and static manner. In the present case the European Commission had established to the requisite legal standard that, from the start of the infringement period, the UK had sufficient knowledge of the undervaluation fraud in issue and of the measures which OLAF and the Commission recommended that it take to tackle that fraud effectively, namely, pre-clearance customs controls of consignments identified on the basis of the OLAF-JRC risk analysis tool. Accordingly, the system of customs controls put in place by the UK during the infringement period to combat that fraud, limited as it was to post-clearance action to recover duties, was not tailored to the characteristics of that fraud and manifestly failed to respect the principle of effectiveness laid down in article 325(1) of the FEU Treaty and showed that the UK had failed to fulfil its obligations under EU customs legislation. Further, any non-binding common measure that could be adopted in relation to the risk analysis and management criteria referred to in the EU customs legislation was part of the fight against fraud referred to in article 325. Therefore, the member states had to take due account of any such criteria which had been recommended by the EU, if they had not developed national criteria that were at least as effective as those recommended. Accordingly, by failing to carry out customs controls based on risk analysis before clearance of the goods concerned, the UK had failed to fulfil its obligations under the EU Customs Codes. Further, the UK authorities did not take appropriate customs control measures to verify the customs values declared in respect of relevant imports made throughout the infringement period in accordance with EU customs rules. Consequently, by calculating and entering customs duty in respect of those imports on the basis of incorrect values which were too low, the UK failed to fulfil its obligations under article 325(1) and EU customs law (paras 242, 257, 258, 279, 281, 292, 298, 319, 320, 322, 331–335, 601, 602, operative part).

(2) Having regard to the circumstances of the present case, and in view of the principles affirmed by previous Court of Justice authority, the UK failed to comply with the duty of sincere co-operation laid down in article 4(3) TEU, in so far as it did not provide in good time (i) full details of the calculations relating to the customs debts claimed in the original demand notes issued by the UK and then cancelled, which the Commission asked it to disclose and which were necessary for the purpose of calculating the amount of traditional own resources losses, and (ii) the reasons for the decisions cancelling the customs debts established by those original demand notes which the Commission also asked it to provide (paras 598–601, operative part).

(3) In relation to the alleged breach by the UK of its obligation to make available traditional own resources in general, since the management of the system of the EU’s own resources was entrusted to the member states alone, the obligations to collect, establish and place those resources on account with a view to making them available to the European Commission were imposed directly on the member states. Further, it was for the member states to protect the financial interests of the EU against fraud or any other illegal activities, and to adopt the measures necessary to guarantee the effective and comprehensive collection of customs duties and the corresponding resources. In the light of the characteristics of the system of the EU’s own resources, the UK did not establish or make available to the Commission all of the own resources relating to the relevant imports at the relevant time, contrary to EU legislation on own resources. Further, as a result of the inadequate controls of the customs values, the goods were accepted for importation into the EU when only a fraction of the customs duty due had been paid. Since, throughout the infringement period, massive quantities of the goods concerned were imported into the UK at an undervalue, the UK created an irreversible situation leading to considerable losses of own resources for the EU, for which the UK had to be held liable (paras 345–347, 365, 404, 601, 602, operative part).

(4) In relation to the alleged breach by the UK of its obligation to make available specific amounts of traditional own resources, the Commission could not be criticised for having used a statistical method, such as OLAF-JRC method, for the purpose of calculating the amounts of own-resource losses in the circumstances of the present case, since the relevant imports were made on a large scale and the goods concerned were released for free circulation and could not be recalled for checks to establish their true value. It followed that, in the absence of sufficient data in relation to the quality of the goods already released, it was no longer possible to determine the value of those goods on the basis of one of the evaluation methods provided for in the EU Customs Code and only a statistical method could be used. Accordingly, the Commission was entitled to apply the OLAF-JRC method to estimate the amount of traditional own resources losses for the second period of the infringement, since that method proved to be sufficiently precise and reliable, and did not lead to an overestimate of the amount of those losses. However, by relying on the OLAF-JRC method, the Commission failed to establish the amounts of own resources to the requisite legal standard in relation to the first period within the infringement period. Accordingly, the claim would be rejected in so far as it related to the amounts of resources listed for the first period, amounting to over €1,001m (paras 442–443, 447, 449, 450, 462, 463, 505, 522, 523, 533, 601, 602, operative part).

(5) A customs value that was declared below its true value necessarily meant that the taxable amount for VAT purposes was also determined incorrectly, so that the full amount of VAT could not be collected, in breach of articles 2(1)(d) and 85–87 of the VAT Directive. Accordingly, the UK failed to fulfil its obligations under articles 2(1)(d) and 85–87, in relation to imports made pursuant to customs procedure 40 under which both customs duties and VAT were required to be collected in the UK. However, the Commission did not demonstrate that that failure on the part of the UK customs authorities actually gave rise to losses of own resources accruing from VAT. Even if, in the case of imports made under customs procedure 40, the importers did not pay the VAT in full because the taxable amount of those imports was too low, that did not necessarily mean that the net VAT revenue was affected. Importers, like others operating downstream in the sale of the goods before they were invoiced to the final consumer, could recover the VAT which they paid. The question whether net VAT revenue was affected by the undervaluation that took place when those imports were made depended therefore on the price invoiced to the final consumer. In relation to imports made during the infringement period under customs procedure 42, under which, according to the exemption mechanism provided for by articles 138 and 143 of the VAT Directive, only customs duties were paid in the UK and VAT had to be paid in the member state of destination of the goods, it was for the authorities of the member states of destination, not for those of the UK as member state of importation, to ensure that the taxable amount for the purposes of VAT was correctly determined. Consequently, the UK had not failed to fulfil its obligations in relation to imports made during the infringement period under customs procedure 42 (paras 547–553, 561, 572–576. 577, 601, 602, operative part).