Houareau, R. v

A person does not derive a pecuniary advantage merely because he has been knowingly concerned in an importation. Whether he has benefited is a question of fact. However, where a person plays an organisational part in a smuggling enterprise and provides no contrary evidence, the court may draw a robust inference that he has a beneficial interest in the goods.

Such an interest makes him an importer liable for unpaid duty. The evasion of that duty is then a pecuniary advantage within section 71(5) of the Criminal Justice Act 1988.

The appellant pleaded guilty at Worcester Crown Court to being knowingly concerned in the fraudulent evasion of Customs duty on cigarettes. He had arranged storage premises and acted as a contact between the lorry carrying the cigarettes and the premises where they were unloaded.

At Birmingham Crown Court, the judge made a confiscation order for £50,826. The judge inferred that the appellant had an interest in the cigarettes and therefore derived a pecuniary advantage from the duty evasion.

The appellant appealed, contending that he was merely an intermediary and had neither imported the goods nor obtained any benefit from them. The central issue was whether the evidence permitted an inference that he had derived a pecuniary advantage for the purposes of section 71 of the Criminal Justice Act 1988.

1. Appeal dismissed. The judge was entitled to find that the appellant had derived a pecuniary advantage and to make the confiscation order.

2. Whether a defendant has obtained property or derived a pecuniary advantage under section 71 is a question of fact. Being knowingly concerned in an importation does not, without more, establish an interest in the goods. It is nevertheless a relevant circumstance.

3. The appellant had played an organisational role, had arranged the storage location, maintained contact with those involved and had intended to travel to the area when the cigarettes arrived. He gave no evidence to rebut the inference that he was to share in the goods or their sale proceeds. It was therefore proper to infer that he had a beneficial interest in the cigarettes.

4. That interest brought him within the statutory concept of an importer under the Customs and Excise Management Act 1979 and made him liable for the unpaid duty. Applying Smith [2002] 1 WLR 54, the evasion of duty consequently constituted a pecuniary advantage under section 71(5) of the Criminal Justice Act 1988. The Crown's alternative analysis led to the same conclusion: a person with an interest in goods obtained without payment of duty obtains them at an artificially reduced value.

5. The Court agreed with Olubitan [2003] EWCA Crim 2940 that a confiscation court may draw robust inferences where defendants do not explain the financial arrangements between them. A distinct, evidenced reward might preclude an inference of an interest in the goods, but no such evidence existed here.

• Court of Appeal (Criminal Division): Dismissed the appellant’s appeal against the confiscation order.

• Crown Court at Birmingham: On 13 October 2004, made a confiscation order for £50,826, payable within six months, with 18 months’ imprisonment in default.

• Worcester Crown Court: On 23 March 2004, the appellant pleaded guilty to being knowingly concerned in the fraudulent evasion of duty under the Customs and Excise Management Act 1979. He received a two-year sentence, later reduced on appeal to 18 months.