Security Oracle News Archive

£5m Penalties For Tobacco Manufacturers Who Aid Smuggling

Thu, October 05, 2006

Source: Government News Network

Tobacco manufacturers who fail to take sufficient steps to prevent their products being smuggled into the United Kingdom face fines of up to £5 million under new laws that came into force on Sunday 1 October.

Tobacco manufacturers who fail to take sufficient steps to prevent their products being smuggled into the United Kingdom face fines of up to £5 million under new laws that came into force on Sunday 1 October.

Legislation was introduced in the Finance Act 2006 making it a legal duty for tobacco manufacturers not to facilitate smuggling and to avoid supplying cigarettes or hand-rolling tobacco to those likely to smuggle them into the UK. Those manufacturers who don't properly control their supply chains may be issued with civil penalties.

Financial Secretary to the Treasury John Healey MP said:

"Tobacco smuggling is not a victimless crime: it is run by organised criminal gangs with no regard to the harm they cause to our communities. Smugglers undermine law-abiding businesses, use the proceeds to fund other types of organised crime and provide an unregulated supply of tobacco which undermines Government health objectives and cheats the public purse of tax that is due.

"Our innovative, strategic approach to tackling tobacco smuggling has reduced the illicit cigarette market by 25% since 2000, but we continue to strengthen our efforts to counter this criminal attack.

"Existing agreements with tobacco manufacturers have been crucial in restricting the availability of genuine cigarettes to smugglers. The new legislation builds on this joint working, by obliging manufacturers to take responsibility for control of their supply chains, or face fines of up to £5 million. We are confident that we can continue to work together with the industry to develop further practical, risk-based solutions which will support our wider operational response."

The measures build on existing voluntary codes agreed with several tobacco manufacturers who have already signed Memoranda of Understanding (MOUs) agreeing controls which restrict the availability of genuine cigarettes and hand-rolling tobacco in the illicit market. The legislation creates a level playing field, by making all manufacturers equally responsible for product control.

If, having previously been given formal warning by HMRC, they still do not take the necessary steps to control their supply chain adequately; a penalty of up to £5m may be imposed.

Government News Network