HMRC

Defendants Urged to Seek Legal Advice after Tobacco Smuggling Prosecution Blunder

Over £88 million of assets and cash that may have been taken by unlawful confiscation from people convicted of tobacco smuggling or counterfeiting tobacco brands could be returned with costs and compensation, after it has been announced that out-of-date legislation was used to secure many prosecutions. Local tax specialists at Richard Nelson Solicitors in Cardiff are urging anyone who has been issued with a confiscation order relating to the illicit trade of cigarettes by the Revenue and Customs Prosecutions Office (RCPO), on or after 1 June 2001, to seek specialist legal advice.

Her Majesty’s Revenue and Customs (HMRC) has confirmed it is conducting an urgent confiscation order review of 4,000 defendants convicted of tobacco smuggling. People have been forced into bankruptcy, to sell their family homes, and have lost their businesses to fulfil the confiscation demands. Many have served prison sentences.

The mistake came to light during an appeal made by William Chambers who was caught in Kent with 600Kg of contraband tobacco. The Court of Appeal overturned the £66,000 confiscation order when one of HMRC’s lawyers realised that that legislation order against Mr Chambers was issued under the 1992 excise duty regulations, which had been updated in 2001. Instead of everyone involved in the crime being required to pay tax, regardless of whether smuggling tobacco, transporting it or selling it, the revisions meant only the masterminds and those who brought it into the UK would have to pay the duty. This dramatically limits the number of people who can be targeted for these smuggling charges. Mr Chambers admitted knowing it was smuggled but denied bringing it into Britain from Belgium.

Several other people have since successfully appealed against confiscation orders, and it is not yet known how many of the other orders will be overturned.

Every case should be examined individually, so the team at Richard Nelson Solicitors is advising anyone affected to seek specialist legal assistance to check the validity and accuracy of the order made against them. If there are grounds to challenge an order, the team will be able to offer clear advice about how to proceed with any appeal.

If an individual has already heard from the RCPO after a review of their case and has been told that the confiscation order was not flawed, they should ensure that the decision is still examined closely, particularly as the RCPO misinterpreted the legislation incorrectly originally.

In some cases, where the assets were frozen before trial, there have been complaints that this has hampered the defendant in mounting their defence. For example, they have been unable to hire expert witnesses or appoint a specialist solicitor to defend them.

The issue has also highlighted two key legal concerns over confiscation proceedings. Firstly, confiscation orders can punish people twice for the same offence: they can be jailed for the smuggling charges and face a confiscation order, but threatened with further imprisonment if they do not pay up.

Secondly, the Home Office has set the criminal justice system a target for the annual seizure of £250 million of criminal assets by 2010 and wants the figure to rise to £1 billion per year. The Home Office, police forces, other law enforcement agencies, prosecutors, and the courts all stand to benefit financially from successful convictions which lead to confiscation orders. The RCPO has revealed that last year senior prosecution officials received up to £44,000 in personal bonuses for seizing assets and hitting confiscation targets under an incentive scheme. Many leading tax solicitors fear that financial incentives linked to targets could lead to serious miscarriages of justice.

The HMRC prosecutions office said:

“To date we have reviewed 711 defendants’ cases. Of these, we have written to 35 defendants as part of the second stage of the review (those cases where the law has been wrongly applied). A further 13 convicted defendants have contacted us on learning of the review and we are corresponding with them. By a process of extrapolation from the number of tobacco cases recorded, we project there are a further 3,300 individual defendants’ cases to be reviewed.”

“Whilst the error is deeply regrettable we were not alone in making it: the same error has been made in academic texts and by practitioners at all levels.”

If you have been affected by a confiscation order relating to tobacco smuggling call Richard Nelson Solicitors on 0115 986 3636 for specialist, professional and prompt advice. You can also visit the Richard Nelson Solicitors website, or email help@richardnelsonllp.co.uk.

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