Revenue powers: the Keith Committee

In 1984 the Keith Committee looked in detail at the investigation and prosecution work of Customs and Excise and concluded that no substantive change was needed. However, recent questions over the conduct of Customs investigations, and litigation relating to the seizure of assets, following incorporation of the European Convention on Human Rights into UK law, suggest that its findings may not stand. Gavin McFarlane of Dechert and London Guildhall University reports.

Recent articles have concentrated on the increasing problems that Customs and Excise face when combating fraud. The work lies in the field of drugs importation and also across a wide range of commercial activities which have been subject to an increasing number of fraud allegations. The introduction of Value Added Tax in 1973, has given rise to a growth industry in its fraudulent evasion. However, more recently phenomenal increases in excise duty fraud have been observed, and billions are being lost to the national exchequer as bootleg alcohol, and especially tobacco products, find their way into the UK retail market. It has been suggested that there is a correlation between the decline in the number of armed robberies on banks and similar institutions and an increased criminal focus on the fraud opportunities presented by indirect taxation. The rewards can be high and the risk of physical injury is all but removed. As we have reported previously, the whole question of whether Customs and Excise should continue to conduct their own prosecutions is currently being considered at the request of the Attorney General, to whom a number of cases were referred by senior judges following their rejection of prosecution evidence.