Bakewell, R. v

For confiscation under Proceeds of Crime Act 2002, a person who imports contraband cigarettes and evades duty obtains a pecuniary advantage equal to the evaded duty. That benefit arises on importation. It does not depend on the later fate of the cigarettes, the importer’s anticipated share of sale proceeds, or the degree of control exercised over the transport operation.

An accepted basis of plea prevents a confiscation order founded on facts inconsistent with it. It does not prevent an order based on a pecuniary advantage which the basis of plea does not address and which follows from the offence admitted.

HMRC appealed against a confiscation order made at Leeds Crown Court following Mr Bakewell’s guilty plea to being knowingly concerned in the fraudulent evasion of duty on imported cigarettes. He had allowed his details to be used for the importation, arranged freight delivery and was to receive tyres valued at £10,000. The cigarettes, which belonged to another person, were seized before disposal.

The Crown Court treated the tyres as the whole of his benefit. It distinguished earlier cigarette-smuggling authorities by reference to Mr Bakewell’s limited role and his basis of plea. HMRC contended that he had also obtained a pecuniary advantage equal to the customs duty, excise duty and VAT evaded on importation.

1. Appeal allowed. The confiscation order was varied from £10,000 to £403,959.67, with two years’ imprisonment in default.

2. Under sections 6, 7 and 76 of the Proceeds of Crime Act 2002, where there is no criminal lifestyle, the Crown Court must determine whether the defendant benefited from his particular criminal conduct. A pecuniary advantage obtained through that conduct is treated as property worth its value. Mr Bakewell was liable, as importer, for the duties on the cigarettes. By fraudulently evading them, he obtained a pecuniary advantage equal to the duties.

3. The court followed R v Cadnam Smith [2001] UKHL 68. The advantage was obtained upon importation. It was immaterial that the cigarettes were seized, that Mr Bakewell would not own or sell them, or that his operational role was limited. The judge had therefore erred by seeking factual distinctions based on control of transport or an interest in disposal of the cigarettes.

4. The accepted basis of plea did not state that evasion of the duties conferred no pecuniary advantage. It instead limited Mr Bakewell’s intended reward from the wider operation to the tyres. That was consistent with his obtaining the separate advantage of avoiding duties for which he was liable. R v Lunnon [2004] EWCA Crim 1125 concerned an inconsistent Crown concession about prior drug trafficking and did not assist him. R v Ellingham [2004] EWCA Crim 3446 directly supported the result.

5. The agreed pecuniary advantage was £393,959.67. Adding the conceded £10,000 value of the tyres produced the recoverable amount of £403,959.67. HMRC stated that it would seek no separate recovery of the evaded duties.

• Court of Appeal (Criminal Division): HMRC’s appeal was allowed. The confiscation order was varied to £403,959.67.
• Leeds Crown Court: Judge Benson made a confiscation order of £10,000 following the respondent’s conviction for fraudulent evasion of duty.