Revenue and Customs Prosecutions Office v M (Rev 1)

Where confiscation is confined to a particular offence, the prosecution must prove the benefit obtained from that offence. Suspicious or unexplained financial activity cannot substitute for proof of a greater role in the offence.

An offender who was not an importer or co-importer does not obtain imported tobacco for the purposes of section 76(4) of the Proceeds of Crime Act 2002. A pecuniary advantage under section 76(5), based on evaded excise duty, requires personal civil liability for that duty. Regulation 13(3)(e) of the Tobacco Products Regulations 2001 does not impose that liability on every person whose acts contributed to importation. It is directed to the person or body with real and immediate responsibility for causing the goods to reach the excise-duty point, ordinarily the consignor.

The respondent pleaded guilty at Maidstone Crown Court to knowingly being concerned in the fraudulent evasion of duty on imported tobacco, contrary to section 170(2) of the Customs and Excise Management Act 1979. In ensuing confiscation proceedings, the prosecution did not allege a criminal lifestyle. It alleged benefit consisting of the tobacco and the evaded excise duty.

The Recorder rejected a concession by the respondent’s former advisers that the statutory benefit was established. He found that the prosecution had not proved that the respondent was an importer or had a role greater than that of a paid loader, and made a confiscation order for £100 only.

The prosecution appealed under section 31 of the Proceeds of Crime Act 2002. The central issues were whether the Recorder should have found that the respondent was an importer, and whether a loader was personally liable for excise duty under regulation 13(3)(e) of the Tobacco Products Regulations 2001.

1. The prosecution appeal was dismissed. The Recorder was entitled to find that the prosecution had not proved that the respondent was an importer or co-importer. His rejection of the respondent’s evidence did not require him to infer a greater role from the circumstantial evidence or from unexplained cash movements. In a particular-crime case, the prosecution bears the burden of proving the benefit from that crime. The criminal-lifestyle provisions address the different situation in which wider assumptions may arise.

2. Applying the House of Lords’ guidance in May, Jennings and Green, the respondent could not be treated as having obtained the tobacco within section 76(4) of the Proceeds of Crime Act 2002 if he was not an importer or co-importer.

3. A claim that he obtained a pecuniary advantage through evading duty under section 76(5) also required proof that he was personally liable for that duty. The court approved the reasoning in R v Chambers [2008] EWCA Crim 2467 on that requirement.

4. Regulation 13(3)(e) of the Tobacco Products Regulations 2001 was not to be read as imposing civil liability on every driver, loader, or other person who made a material contribution to an importation. Read in the light of the implementing Directive, it concerns the person or body with real and immediate responsibility for bringing the goods to the excise-duty point, typically the consignor. The court deliberately declined to give an exhaustive definition, but held that the provision did not extend to the respondent’s established role as a loader.

5. The confiscation order of £100 therefore stood. The formal order was not to be effected until 14 days after receipt of the transcript.

• Court of Appeal (Criminal Division) — dismissed the prosecution’s appeal and upheld the £100 confiscation order: [2009] EWCA Crim 214.
• Maidstone Crown Court — the Recorder held that the prosecution had not proved a benefit beyond £100 from the particular offence and made a confiscation order in that sum.