Ellingham, R. v

For confiscation under section 71 of the Criminal Justice Act 1988, a person who participates in an importation which fraudulently avoids customs duty may obtain a pecuniary advantage equal to the whole duty avoided. The benefit is not confined to the fee or reward which that participant expected or received.

Where the participant was responsible for the importation and storage of the goods, the advantage is obtained at importation. A difference between the confiscation regime and the drug-trafficking regime follows from their different statutory wording. Applying section 71 in this way was not disproportionate or incompatible with the Convention right to peaceful enjoyment of possessions.

The appellant pleaded guilty to fraudulent evasion of duty arising from the importation of about six million cigarettes on which duty of £1,120,850 had not been paid. He arranged United Kingdom freight and initial storage. His basis of plea stated that he was neither organiser, financier nor end user, and that he received £5,000 of an expected £10,000 reward.

Following his conviction, Field J made a confiscation order under section 71 of the Criminal Justice Act 1988 for £129,756, the agreed value of the appellant’s realisable assets. The appellant appealed, contending that his benefit was limited to his £5,000 reward rather than the duty avoided.

1. Appeal dismissed. The appellant’s role in arranging the importation and storage of the cigarettes made him a person who derived the pecuniary advantage obtained by evading the duty. His benefit was therefore the full duty avoided, subject to the agreed amount of his realisable assets.

2. Under section 71(5) of the Criminal Justice Act 1988, avoidance of customs duty is a pecuniary advantage. By section 71(4), that advantage is treated as property obtained in connection with the offence. The relevant time was the importation, when the appellant’s criminal participation secured the avoidance of duty.

3. The court followed R v Smith [2002] 1 WLR 54. The statutory scheme focuses on the value of the advantage when obtained. It does not require the offender personally to retain or enjoy the proceeds. The appellant’s limited promised reward and lack of a beneficial interest in the wider enterprise therefore did not confine his benefit to £5,000.

4. The court also agreed with the broad construction of “obtains” in R v Gibbons [2003] 2 Cr App R(S) 33 and with the reasoning in R v Alagobola [2004] EWCA Crim 89. A participant may obtain property for confiscation purposes without personally enjoying the fruits of the criminal conduct.

5. Section 2(3) of the Drugs Trafficking Act 1994 used materially different language and did not justify narrowing section 71. Nor did the order breach Article 1 of the First Protocol to the European Convention. The court declined to certify the proposed point of law as one of general public importance.

• Court of Appeal (Criminal Division) — dismissed, with leave of the Single Judge, the appeal against the confiscation order. It also refused certification of the proposed point of law.
• Crown Court at St Albans — Field J made a confiscation order of £129,756 under section 71 of the Criminal Justice Act 1988, following the appellant’s conviction on indictment 196.