Islam, R v

An importer and consignee obtains property in illicit drugs in connection with their importation, even if Customs seize them before physical possession is taken. However, for calculating benefit under sections 79 and 80 of the Proceeds of Crime Act 2002, market value means value in a lawful market. Illegal drugs therefore have no direct market value for confiscation purposes.

A court may instead find an earlier benefit through the criminal-lifestyle assumptions and evidence of the price paid for drugs. It cannot equate wholesale value with purchase price without evidence, nor permit double counting.

The appellant pleaded guilty at Snaresbrook Crown Court to two offences of being knowingly concerned in the fraudulent evasion of the prohibition on importing goods, contrary to section 170(2) of the Customs and Excise Management Act 1979. The imported consignments contained heroin, but Customs seized both consignments before they reached him.

His Honour Judge Collender QC made a confiscation order for £404,604. In calculating benefit, the judge included £71,424 as the wholesale value of the heroin. The appellant appealed that element of the order.

The central issue was whether seized heroin, although obtained in connection with the importation, had a market value which could be included directly in the appellant's benefit under the Proceeds of Crime Act 2002.

1. Appeal allowed. The confiscation order was reduced by £71,424, the wholesale value attributed to the seized heroin.

2. The first ground failed. Under section 76(4) of the Proceeds of Crime Act 2002, a person benefits if he obtains property as a result of, or in connection with, criminal conduct. Applying R v May [2008] UKHL 28 and Jennings v CPS [2008] UKHL 29, the appellant obtained property in the heroin as its importer and consignee. Physical possession was unnecessary because the heroin was already his property when seized.

3. The second ground succeeded. Sections 79 and 80 required the court to value property obtained at the time it was obtained, since it was no longer held when the confiscation order was made. The Court was bound by Hussain [2006] EWCA Crim 621, directly in point, that market value in those provisions means value in a lawful market. Heroin cannot be lawfully sold and therefore has no direct market value for either benefit or available-amount purposes.

4. The Court explained that the observation in Dore [1997] 2 Cr App R(S) 152 concerned the realisable value of drugs in a hypothetical situation. It was not necessary to the decision in that case and did not itself resolve historical benefit.

5. An indirect route might have been available through the criminal-lifestyle assumptions: the court could have inferred expenditure on acquiring the drugs and attributed that expenditure to criminal conduct. But there was no evidence of the appellant's purchase price. Wholesale value could not properly be assumed to be the amount paid to overseas suppliers. The existing order could therefore not be upheld on that alternative basis.

• Court of Appeal (Criminal Division) — allowed the appeal and reduced the confiscation order by £71,424: [2008] EWCA Crim 1740.
• Snaresbrook Crown Court — His Honour Judge Collender QC made a confiscation order of £404,604 on 5 January 2007.