Urgent action required on tobacco smuggling strategy

16 Jun 2014 01:00 PM

The Home Affairs Committee publishes its report on tobacco smuggling on 15 June 2014. 

• Report: Tobacco smuggling
• Report: Tobacco smuggling (PDF)
• Inquiry: Tobacco smuggling 
• Home Affairs Committee

Report

The House of Commons Home Affairs Committee has highlighted the urgent need for improvements to the Government’s ‘Tackling tobacco smuggling’ strategy. The Committee found:

Penalty regime

• HM Revenue and Customs (HMRC) has not fined any UK tobacco manufacturer for over-supplying products or failing to control its supply-chain, and has issued only one statutory warning letter threatening a fine.
• HMRC should publish a clear set of criteria setting out the circumstances in which it would impose a fine and that an immediate review be taken of all historic and ongoing cases against this criteria.

Reduction in arrests, prosecutions and convictions

• Over the last three years the numbers of arrests, prosecutions and convictions for organised crime cases involving tobacco have all fallen. Civil penalties were also substantially below target in both 2011–12 and 2012–13
• The Government and its appropriate agencies, should combat this problem at source. Members of HMRC and Border Force should set up firm relationships with their counterparts in countries such as Malaysia to ensure that intelligence and best practice is shared.

Mandatory plain packaging

• The decision on standardised packaging should be driven by health reasons. There must be a more vigorous effort on enforcement.

Track and trace technology

• Any future legislation to introduce standardised packaging should include a requirement for appropriate security and tracking features, including a effective track and trace system.

 

Chair's comments

Rt. Hon Keith Vaz MP, Chairman of the Committee said:

“It is a matter of grave concern that, despite an increase in the resources over the last three years the numbers of arrests, prosecutions and convictions for organised crime cases involving tobacco have all fallen.  It is vital that there is no reduction in enforcement action.  The time of Jamaica Inn is over and our fight against tobacco smuggling must be a priority.

It is most surprising that no UK tobacco manufacturer has ever been fined for over-supply of products to high-risk overseas markets, and that only one statutory warning letter has been issued.  The penalties available are too weak and enforcement too rare. An immediate review should be taken against all historic and ongoing cases in order to ensure those who have committed an offence do not go unpunished.

The standardised packaging decision should be made on the basis of health. It is vital that consideration of the potential effects on smuggling is thorough and common sense steps are taken to ensure that criminal gangs do not profit from the Government’s decision.”