The European Commission, headed by Mr Juncker, has been urged to fine the UK nearly £2billion
An investigation by the EU's anti-fraud office, OLAF, and French authorities in the first half of last year claimed British customs officials ignored repeated warnings to prevent Chinese clothing and footwear from flooding into the EU at a minuscule fraction of their production costs from 2014 to 2016, with some evidence from 2013.
They add this resulted in a "significant loss" of revenue from the collection of duties and taxes of other member states which the goods were then distributed to, with Spain, France and Italy taking the main brunt of losses and Poland and the Czech Republic making more marginal losses.
EU officers found false invoices valued the goods at five to 10 times lower than they should have been.
Significant value frauds were committed during customs clearance in the United Kingdom and were prolonged by non-payment of VAT in the countries of destination
Due to UK customs' alleged "continuous negligence", the EU was deprived of £1.72bn in lost duty revenue, according to website Politico.
A total of £2.8bn in VAT was also denied to other EU countries because of the UK, OLAF found.
The OLAF and French investigation found the UK was not taxing products enough
To get back some of the funds, OLAF has recommended the British Government should be forced to pay the £1.72bn directly into the EU budget by the European Commission's Directorate-General for Budget.
Anti-fraud investigators told Politico: "These losses to the EU budget are still ongoing since this fraud has not been stopped to date.
"Despite repeated efforts deployed by OLAF, and in contrast to the actions taken by several other member states to fight against these fraudsters, the fraud hub in the UK has continued to grow."
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They said the UK had not yet opened any criminal investigation into the fraud scheme.
An investigation report, stated: "OCTOPUS therefore determined that significant value frauds were committed during customs clearance in the United Kingdom and were prolonged by non-payment of VAT in the countries of destination.
"Above all, the operation revealed that these large-scale frauds were the result of very organised organised circuits, extremely reactive and having an excellent knowledge of the faults of controls, logistic circuits, false invoice systems and clandestine financial flows."
As part of the operation French authorities found undervalued Chinese imports
Both Dover, pictured here, and Felixstowe were the focus of the operation
A spokesman for HMRC said the UK has an "excellent record in tackling fraud and rule breaking of all kinds, securing more than £26.6bn last year alone".
He added they are "considering" OLAF's findings and recommendations.
Operation OCTOPUS last year focused on the Kent port of Dover and Felixstowe on the Suffolk coast which are the two main entry points for Chinese textiles into Europe.
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Using women's trousers as an example, OLAF said they were declared with a value of 78p per kilogram, making the average price for a pair costing £24.30.
The market price of cotton is much higher at £1.25 a kilo.
"Phoenix" companies – which disappear and then pop up elsewhere – were set up by fraudsters to take delivery of the goods after they were trafficked to fellow members of the crime network across Europe.
This meant they could avoid paying VAT as EU law allows importers to pay VAT in the country they intend to sell in, instead of the port of entry.
Bruno Collin, in charge of the operation from the French National Directorate of Intelligence and Customs Investigations, said Britain's nonchalance was because other countries were losing VAT revenue, not the UK.
He told Politico: "UK authorities are not interested at all in cooperating in this field, probably because the phenomenon does not directly affect them."
He added British authorities largely ignored French requests to help trace goods and when they did they offered only "extremely vague explanations, they don't make an effort".