HM Customs press release rejecting Commission complaints about tobacco smuggling strategy



Tuesday 18 December 2001

HM Customs & Excise News release

 

PR 68 / 01     DATE:   18 December 2001
 GOVERNMENT DETERMINED TO TACKLE SMUGGLING

 

The Government today spelt out its determination to continue cracking down on tobacco smuggling at the Channel ports, insisting that its fair and balanced approach was not aimed at the genuine shopper.

 

In a letter sent today to the European Commission, the Government has strongly defended Customs’ efforts to tackle those engaged in alcohol and tobacco smuggling, and repeated a long-standing invitation for the Commission to come and see the reality of the smuggling problem at the UK’s Channel ports.

 

In the letter, the Government explains that:

·           it fully upholds the rights of UK citizens to bring back unlimited amounts of alcohol and tobacco from cross-Channel shopping trips, so long as they are for their own use;

·           but it is determined to crack down on the smugglers who bring back alcohol and tobacco to be illegally re-sold within the UK;

·           and it makes clear that Customs’ policies for distinguishing between ordinary shoppers and possible smugglers are based on the European Commission’s own guidelines.

 

The Government also set out clear evidence that Customs’ efforts are solely targeted on tackling smuggling, revealing that:

·           of the 14 million people who entered the UK via the Channel ports last year, more than 99.8 per cent passed through Customs’ controls without a problem;

·           of the minority who were stopped and asked questions by Customs, the majority were able to explain that the goods they were carrying were for their own use and were allowed to travel on freely;

·           the average quantity of goods seized from cross-Channel smugglers was around 20 kilograms of hand-rolling tobacco, enough to make 34,000 cigarettes;

·           smugglers are masquerading as genuine shoppers to try and evade Customs’ controls, using prams and toddlers’ rucksacks to try and smuggle tobacco, and even strapping tobacco to babies’ bodies;

·           official estimates show that one in five organised crime gangs involved in smuggling Class A drugs into the UK are also engaged in tobacco smuggling;

·           and these gangs have been targeting Customs officers and buildings with physical violence, intimidation, vandalism and arson attacks.

Paul Boateng, Financial Secretary to the Treasury and the Minister responsible for Customs, said:

 

“Millions of honest shoppers cross the Channel each year. They can bring back as much alcohol and tobacco as they like for their own use, and we will always uphold that as a fundamental right of UK citizens within the Single Market. But smuggling is something totally different, and anyone who has visited the Channel ports knows the reality and the importance of our efforts to tackle it. The criminal gangs engaged in smuggling rob our public services of revenue, undermine honest shopkeepers and use the proceeds to fund other forms of organised crime.

 

“We make no apologies for cracking down on smugglers, and it is clear that our strategies for doing so are proving a real success. Yet again, I would urge Commissioner Bolkestein to visit the Channel ports and see the situation for himself. Once he does that and reads our response, I am confident he will see that we are only interested in tackling smuggling and will welcome our efforts to do so.”

 

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Detail

 

The Single Market

 

1. At the introduction of the Single Market, EU citizens gained the right to bring back unlimited quantities of excise goods purchased in other Member States provided they were for their own use. However, EC legislation also required all Member States to distinguish between excise goods purchased for people’s own use and goods bought for a commercial purpose (i.e. to be illegally re-sold).

 

2. To this end, EC legislation laid down “indicative levels” which Member States could use to help distinguish goods intended for a commercial purpose from those intended for people’s own use.

 

3. Like many other Member States, the UK therefore incorporated these indicative levels into its domestic legislation. However, they are only used as a guide. To reach a decision on whether the goods are in fact being brought back for a commercial purpose, Customs must assess a range of other factors, and give the individual an opportunity to demonstrate that the goods are for their own use. These factors include:

·        practical evidence that the goods are intended for the individual’s own use (e.g. daily consumption habits or details of a planned party or wedding);

·        whether the goods are in open view or have been concealed; and

·        explanation of where the individual got the money to buy the goods (e.g. where very large cash sums are involved).

4. In April 2001, the Lord Chief Justice stated that placing of the onus on the traveller to satisfy the Customs Officer that the goods were for their own use was proportionate and justifiable, saying: “The individual concerned is in the best possible position to give an explanation…for the reason why the quantity was imported.  The burden placed upon a member of the public is not, in my judgement, excessive or unreasonable.”

 

Customs’ controls

 

5. In October, European Commissioner Frits Bolkestein wrote to the UK Government seeking information on how the UK applied its controls on excise duties. The Government has today replied to the Commission making a number of points.

 

6. On the issue of UK citizens exercising their Single Market cross-Channel shopping rights, the Government has pointed out that:

 

·        it fully accepts that people have a right to bring back to the UK as much alcohol and tobacco as they wish for their own use: there can be no quantitative allowances in the Single Market and the UK does not impose such limits;

 

·        Customs issue leaflets to travellers which make clear that “You can bring in as much alcohol and tobacco as you like for your own personal use”, and more than 99.8 per cent of the 14 million travellers who enter the UK each year on the cross-Channel routes do so freely with no loss of their goods;

 

·        Customs do stop and ask questions of some travellers carrying quantities of goods in excess of the EC’s indicative levels. However, the majority of these travellers are able to demonstrate to Customs that the goods are for their own use and are free to proceed;

 

·        whereas the Government has no interest in honest cross-border shoppers, it is committed to tackling tobacco smuggling, a massive and highly organised criminal activity costing the Exchequer billions of pounds and undermining legitimate UK shopkeepers.

7. On the issue of Customs targeting their controls on the smugglers, the Government has pointed out that:

·        the average Customs seizure from passengers entering the UK Channel ports is 20 kilograms of Hand Rolling Tobacco (equivalent to about 34,000 cigarettes), which would provide more than 4 years supply for an average smoker (even though the shelf life of hand-rolling tobacco is only 6-12 months);

·        the UK’s National Criminal Intelligence Service estimates that 20% of all UK organised crime groups are involved in tobacco smuggling and 20% of those who smuggle Class A drugs also smuggle tobacco. These groups operate both through bulk consignments of illicit goods concealed in freight containers, and through the use of smuggling ‘runners’ operating on the cross Channel routes;

·        Customs officers at the Channel ports face daily verbal threats and physical violence from the gangs involved in smuggling, and have also had their vehicles and buildings attacked through vandalism and arson;

 

·        the reality of the smuggling problem at Channel ports is far removed from the notion of ordinary people trying to save a little money. Recent examples include:

o             smuggled tobacco being hidden in a toddlers rucksack, strapped to a baby’s body underneath its clothing, and stuffed into the bottom of babies’ prams;

o             a 14 year-old girl found smuggling 10,000 cigarettes; and

o             a ‘booze cruise’ coach seized with over 1 tonne of hand rolling tobacco on board, enough for each of the 26 passengers to make 50,000 rolled cigarettes (over six years’ supply for someone smoking 20 cigarettes a day).

8. On the issue of its tough vehicle seizure policy, the Government has pointed out that:

·        the policy has a real impact on the profitability of smuggling, making smugglers count the cost of using their vehicles to smuggle goods;

·        Customs staff have the discretion to restore vehicles where there are exceptional or humanitarian reasons for doing so, and anyone who has their vehicle seized has the right to an independent appeal;

·        but in many cases, the vehicles seized have been specifically designed or adapted to conceal large consignments of tobacco and other goods, including recent examples of:

o             a family saloon with over 50 kilograms of hand rolling tobacco concealed behind the door panels;

o             a camper van with a false floor, under which was found 250 kilograms of hand rolling tobacco;

o             a car where the petrol tanks had been emptied and used to store 50 kilograms of hand-rolling tobacco, while the actual petrol was hazardously stored in a plastic container elsewhere in the vehicle; and

o             a family saloon used to conceal 50,000 cigarettes and 200 kilograms of hand rolling tobacco – enough to last a couple of average smokers more than 30 years.

The Government has also explained to the Commission that there is an extensive system of appeals available to individuals who feel they have had goods or vehicles seized unfairly. However, latest figures show that only a small proportion of those from whom seizures are made choose to appeal, and only a tiny minority of these appeals are upheld. Of the 24,000 seizures of illicit excise goods made at ports in the South East in 2000-01, only 966 (less than 4%) were appealed, and of these:

 

·        667 were appeals to Customs’ internal review process, of which only 32 were upheld (4.8% of the appeals made); and

·        299 were appeals to the independent Magistrates’ Court, of which only one appeal was upheld (0.3% of the appeals made).

 

Tackling Smuggling and Fraud

 

In March 2000, the Government announced its Tackling Tobacco Smuggling strategy, which is designed to put tobacco smuggling into decline by 2003. The key target for 2000-01 was to slow the previously rapid rate of growth in the UK illicit cigarette market and hold its share of the total UK market to 21%.

 

The strategy provided £209 million for investment in almost 1,000 extra front-line staff and investigators and a national network of x-ray freight scanners designed to detect bulk consignments of smuggled tobacco. To make it easier to identify illicit goods, ‘UK duty-paid’ pack marks were also introduced on tobacco products, with associated offences for those found dealing in them.

 

In the Pre-Budget Report, the Government published the first-year results from the tobacco strategy, showing that Customs have met their key target to hold the illicit share of the UK market to 21%, with 2.8 billion cigarettes seized in 2000-01: 1.9 billion in the UK and 900 million seized en route to the UK as a result of joint operations with overseas agencies.

 

Customs have also achieved a 76% reduction in the amount of revenue lost from the cross-Channel smuggling of tobacco and alcohol, against a target of 10% for 2001. 170 additional officers have been deployed specifically to tackle this problem, and the results have been excellent, with revenue losses from smuggling of beer almost eliminated, revenue losses from smuggling of wine and spirits more than halved, and revenue losses from smuggling of hand-rolling tobacco cut by more than 80 per cent.

 

In addition, Customs investigators broke up 43 major organised crime gangs involved in the smuggling and supply of huge volumes of illicit cigarettes in 2000-01, and seized 10,219 vehicles from smugglers, almost double the number seized in 1999-2000. In their first six months of operation to the end of July 2001, the new network of x-ray scanners have also detected 79 million cigarettes and 4.5 tonnes of hand rolling tobacco, as well as 1.6 tonnes of cannabis and 46 kilograms of heroin.

In the Pre-Budget Report, the Government also published a paper entitled Tackling Indirect Tax Fraud, which explained why it is essential to tackle fraud to protect the revenue required for investment in essential public services, to defend legitimate businesses, to protect wider objectives on health and the environment, and to tackle organised crime. This paper also set out the Government’s strategic approach for tackling fraud, reviewed the first-year results of the tobacco strategy and outlined the steps being taken to tackle fraud in other areas.

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NOTES FOR EDITORS

 

Customs’ information for travellers, including the ‘indicative levels’ set out in EC legislation can be viewed on the Customs website (www.hmce.gov.uk).

Copies of Tackling Tobacco Smuggling (published March 22, 2000) and Tackling Indirect Tax Fraud(published November 27, 2001) are also available from the Customs website at the above address.

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 Issued by HM Customs & Excise Headquarters, London.
For further information please contact:

Nadine Smith – 020 7865 5715                                Robert Buxton – 020 7865 5010

Steve Hallworth – 020 7865 5095                            0ut of Hours – 020 7620 1313