19/10/2025
ASOS Tailored for Trouble Over Underpaid Customs Allegations
This week’s key terms/concepts:
• Customs Duties: Taxes imposed by a government on goods imported into a country.
• Liability: A company’s legal or financial responsibility for something, such as debts or obligations that they may be accountable for.
• Fast-fashion: A sector of the clothing industry focused on the rapid production of inexpensive, trend-driven clothing designed to keep pace with changing consumer demands.
This week, UK fast-fashion company ASOS entered talks with German tax authorities over allegations of underpaid customs duties, with reports claiming that the company’s German subsidiary has potentially misclassified important goods which may lead to millions of euros in unpaid tariffs. ASOS have acknowledged the ongoing discussions, but disputed the size of the assessments, after an internal review of its customs declarations estimated additional liability to be approximately €500,000.
Why is this important?
This development marks the latest in a string of hardships for ASOS, which has faced declining sales and lower revenue forecasts, supply chain pressures, and increasing competition from Chinese fast-fashion giants such as SHEIN and Temu. These platforms have seen growing traction across Europe by leveraging rapid trend cycles and duty-free import thresholds – factors commonly cited as contributing to the online retailer’s subdued demand. Beyond reputational risk, ASOS’ customs dispute could have financial and regulatory implications that exceed their estimations, possibly leading to fines or higher tax liabilities.
What could this mean for law firms?
The inquiry follows a broader EU-wide effort to tighten oversight of e-commerce and cross-border trade, particularly in relation to fast-fashion. As of late, law firms with expertise in EU trade law, digital commerce, and regulatory investigations are likely to see rising demand from fashion retailers, online marketplaces, and logistics providers navigating similar compliance risks. As EU authorities move towards closing loopholes that allow non-EU companies to ship low-value goods into the single market without paying full import duties, businesses operating across borders are under increasing pressure to review and strengthen their customs practices.
ASOS’s share price fell over 3% amid the report of this dispute on Friday, with the company’s shares down 46% in the calendar year to date.
Lex Weekly 