Customs’ faces inquiry after alcohol tax bungle

Link: New Customs program to combat tax evasion

The review into ‘current practices and procedures’ follows the decision by the prosecution not to proceed with one of a series of cases involving the diversion of untaxed alcohol due for export on to the home market instead.

Altogether £680m was lost when investigation teams allowed diversion to take place in a bid to catch the perpetrators and failed to secure the missing revenue.

Now they have lost the cases as well.

The events have already been subject to one independent inquiry leading to the Rocques Report, which found no corruption but made a series of recommendations which were accepted by Customs.

The Liverpool pre-trial hearings concerned proceedings relating to London City Bond in which the defence alleged witnesses lied in court about material facts.

A Customs spokesman said: ‘It became clear that our people had not been as diligent as they should have been in record keeping.’

The prosecution accepted it would not be able to re-build defence assertions and that the defendants would not be able to have a fair trial, and the action was dropped on the advice of Counsel.

Economic secretary David Healey and the attorney general Lord Goldsmith jointly announced the review into the circumstances that lead to the collapse to ‘review the practices of HM Customs and Excise in the recording, retention, revelation and disclosure of material which may be relevant to the prosecution of its criminal cases’.

In particular the High Court judge, yet to be named, will ‘review current compliance with best practice in the use of investigation techniques (e.g. the classification and handling of individuals providing information) and the management and control of cases to the extent these are relevant to the discharge of the prosecution’s obligations in any subsequent criminal proceedings’.

Customs said he or she will look at ‘the parts that should be played by officers solicitors and counsel in the preparation for and presentation of cases for court and the disclosure process’ and report by next June.

A summary of the report and recommendations are to be laid before Parliament.

Customs chairman Richard Broadbent said he welcomed ‘an authoritative and independent audit of the situation’ and said: ‘It is important for Customs and Excise, and indeed the criminal system as a whole that the disclosure and other issues arising from complex investigations into serious crime are examined.’

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