Bajwa & Ors, R v

For the criminal-lifestyle test in section 75(2)(c) of the Proceeds of Crime Act 2002, the relevant defendant must have committed the offence for at least six months. It is insufficient that a wider conspiracy lasted that long.

A conspirator obtains a pecuniary advantage from evaded tobacco duty only if he was liable for the duty. A person who caused tobacco to reach the excise-duty point is liable only if he retained a connection with the goods at that point. The Crown bears the burden of proving those matters on the balance of probabilities. Where it cannot do so, no benefit based on the duty arises and a confiscation order founded on that benefit cannot stand.

Five appellants had been convicted of conspiracy fraudulently to evade duty on a container of counterfeit cigarettes imported by sea. The Crown Court at Manchester treated each as having a criminal lifestyle and made confiscation orders after finding that the conspiracy had lasted more than six months and that each had obtained a pecuniary advantage equivalent to the evaded duty.

The appellants challenged those conclusions. The appeals concerned whether section 75(2)(c) of the Proceeds of Crime Act 2002 required each defendant personally to have participated in the conspiracy for at least six months, and whether any appellant was liable for excise duty when the vessel entered Felixstowe and therefore obtained a pecuniary advantage by evading it.

1. Appeals allowed. The confiscation orders were set aside. The Crown Court had been wrong to treat the appellants’ benefits as arising from general criminal conduct and to include the supposed evasion of duty as a benefit from particular criminal conduct.
2. Section 75(2)(c) of the Proceeds of Crime Act 2002 is defendant-focused. The words concerning an offence committed over at least six months concern the particular defendant’s participation in the offence. That construction accords with the purpose of identifying defendants who have a criminal lifestyle and avoids the anomaly that a person with a very short role in a long conspiracy would automatically be so treated. The Crown had to prove the defendant’s qualifying participation on the balance of probabilities.
3. On the available findings, the Crown had not proved that Bajwa or Sohi participated for six months. Sahnan was conceded not to have done so. Midgley was bound by counsel’s factual concession that his involvement satisfied that period; Mallinson accepted that point. Arrest, interview and seizure of the bill of lading supported the inference that Bajwa and Sohi knew the plan had failed and no longer participated after 14 September 2004.
4. For imported tobacco, the court applied the liability regime under the Tobacco Products Regulations 2001. An appellant was liable only if he held the cigarettes at the excise-duty point, or both caused them to reach that point and retained a connection with them then. None held or controlled the cigarettes when the vessel entered Felixstowe. Although the sentencing findings could support a conclusion that all had caused the importation, the Crown could not prove that any retained the required connection after the arrests and seizure of the bill of lading.
5. Consequently, none was liable for the duty, none could evade it, and none obtained a pecuniary advantage under section 76(5) of the Proceeds of Crime Act 2002. The court also indicated that, had liability existed, fraudulent evasion would ordinarily occur at importation where the person dishonestly intended not to pay the duty.
6. The court declined to entertain the Crown’s late request for a deprivation order concerning £15,000 seized from Mallinson. The necessary factual findings had not been made below and this court could not make them for the first time.

• Court of Appeal (Criminal Division): Allowed the appeals and set aside the confiscation orders.
• Crown Court at Manchester: HHJ Atherton held that the appellants had criminal lifestyles and made final confiscation orders on 31 July 2009.