Memorandum submitted by HM Customs and
Excise
INTRODUCTION
1. Customs welcome the chance to update
our memorandum of April 2000 and to give oral evidence to the
Select Committee. This submission follows the outline of our earlier
memorandum and aims to address the topics raised by the clerk
to the Committee.
THE ROLE
OF CUSTOMS
2. Customs are responsible for the enforcement
of controls on the export of cultural goods from the UK. National
prohibitions on the export of cultural goods are set out in the
Export of Goods (Control) Order 1992, made under the Import, Export
and Customs Powers (Defence) Act 1939. The Export of Objects of
Cultural Interest Order, which is expected to come into force
on 1 May 2004, will replace the 1992 Order, but without changing
any of Customs' powers.
3. EU controls on the export of cultural
goods are principally derived from Council Regulation (EEC) No
3911/92 of 9 December 1992.
4. The only import restriction currently
in force specifically related to cultural goods is United Nations
Security Council Resolution No 1483 (dated 22 May 2003), which
prohibits the import and export of Iraqi cultural objects and
which is given effect in the UK by The Iraq (UN Sanctions) Order
SI 1519. This Order came into effect on 14 June 2003.
5. Customs will have an enforcement role
in relation to the Dealing in Cultural Goods (Offences) Act 2003,
which comes into force on 30 December 2003.
GENERAL CUSTOMS
PROVISIONS
6. General Customs requirements in relation
to imports and exports are common throughout the EU and set out
in Council Regulation (EEC) No. 2913/92 of 12 October 1992 establishing
the Community Customs Code. Customs enforcement powers are mainly
derived from the Customs and Excise Management Act 1979 ("CEMA").
This also sets out the principal offences and sanctions in the
event of an illegal import or export.
7. Supplies of art and antiques and other
cultural objects are liable to VAT at the standard rate, with
a special scheme in place for dealers.
CUSTOMS POWERS
TO PREVENT
ILLEGAL EXPORTS
8. The main UK legislation enabling the
Commissioners of Customs and Excise to enforce controls on goods
subject to export prohibitions and restrictions is Section 68
of CEMA. This provides that
". . . if any goods are exported or shipped
as stores; or brought to any place in the United Kingdom for the
purpose of being exported or shipped as stores . . ."
and the exportation is or would be contrary to
any prohibition or restriction in force, then the goods will be
liable to forfeiture and any person concerned guilty of an offence.
CUSTOMS POWERS
IN RELATION
TO IMPORTS
9. Similar provisions relate to imports.
Section 49 of CEMA makes the import of prohibited goods liable
to forfeiture. Section 170 establishes offences in relation to
the import of prohibited goods. There is no EU import licensing
regime in relation to cultural objects, nor any national import
licensing restrictions.
10. In relation to both imports and exports,
Section 139 of CEMA gives Customs powers to detain or seize goods
liable to forfeiture. Customs also have powers to restore seized
goods on appropriate terms, determined by the Commissioners.
DEALING IN
CULTURAL GOODS
(OFFENCES) ACT
2003
11. The new Act creates an offence of dishonestly
dealing in a cultural object, knowing or believing the object
to be tainted. Dealing includes importing and exporting. There
is no specific prohibition or restriction in the Act that will
allow Customs to use powers of search and forfeiture in CEMA.
Customs' power to search for suspected tainted goods will be confined
to cases where cultural objects are controlled for other purposes
(eg firearms) or we are engaged on a lawful search under another
power. We expect that many cases will involve other Customs offences
such as evasion of revenue or false declaration, and therefore
we will be able to use CEMA powers. If not, Customs will rely
on Section 19 of the Police and Criminal Evidence Act 1984 ("PACE")
for seizure where there is an offence as described in the Act.
12. The Act gives Customs powers to investigate
and prosecute offences where there is any dealing with tainted
cultural objects by way of importation or exportation. However,
such investigations may not be straightforward and it is likely
that they will be confined to the most serious and clear-cut cases.
Establishing an offence will require sufficient evidence that
firstly, the person knew or believed the goods to be tainted and
secondly, the goods were removed or excavated after the date of
commencement of the Act.
13. In practical terms, these issues will
have less impact when dealing with exports, where there could
be an export licensing offence that would fall within Section
68 of CEMA. However, enforcement of imports of cultural objects
will not be as effective as a regime based on import licensing.
Our interpretation is that we will act against attempts to import
cultural objects from third countries where we receive information
that the goods are tainted or where we detect them in the course
of our multi-functional activities at the frontier.
MOVEMENTS WITHIN
THE EU
14. Goods destined for an EU country may
require a UK licence issued by DCMS. Although there is no regulatory
role for Customs (ie no Customs declaration is required), there
is a requirement that the UK licence accompany the goods and be
produced to Customs if we so request—for example, in circumstances
where we are responding to intelligence.
15. Council Directive 93/7/EEC of 15 March
1993 sets out the procedures on the return of cultural objects
unlawfully removed from the territory of a Member State. To date
there have been no requests from Member States under the directive.
EXPORTS TO
COUNTRIES OUTSIDE
THE EU
16. Cultural goods being exported to countries
outside the EU may be controlled under UK licences issued by the
DCMS or under EU harmonised licences. The latter are issued by
DCMS or the recognised authority of another Member State. Customs
enforcement powers are essentially the same in both cases.
VAT IN RELATION
TO CULTURAL
GOODS
17. Works of art, antiques and collector's
items are not liable to any import duty but are entitled to a
reduced VAT rate of 5% at the time of import provided that they
had not been exported from the UK in the previous 12 months.
STOLEN GOODS
18. The import and export of stolen property
are not assigned matters for Customs and we are not able to use
CEMA provisions to stop and examine consignments for such purposes.
However, Section 19 of PACE provides statutory power for Customs
to detain goods identified during checks made for Customs' purposes
where the officer suspects that the goods are the subject of a
criminal offence.
19. Where there is suspicion that cultural
objects were stolen in the UK and are being exported, Customs
can use CEMA powers in those cases where there are grounds to
suspect an export licensing offence that would fall within Section
68 of CEMA. On importation, where we suspected the goods might
be stolen we rely on Section 19 of PACE to hold them whilst we
inform the police. Thereafter we would release the goods if the
police did not follow this up.
CUSTOMS PROCEDURES
Regulatory checks
20. Cultural goods that are being exported
outside the EU with an export licence must be declared to Customs
on an export declaration. The declaration, the export licence
and the goods must be presented to Customs before shipment. Customs
may inspect the official and commercial documentation and may
also examine the goods. Customs will ensure that the export of
the goods is endorsed on individual licences. Exhausted licences
are returned to DCMS.
Preventing illegal exports
21. Under Section 53 of CEMA, which gives
powers to control the movement of goods intended for export, Customs
may prevent the shipment of cultural objects until any query on
their licensability is resolved by DCMS. Customs operate an electronic
profile system to identify possible illegal exports. Our profiling
looks at four elements: the exporter (and other parties involved),
the nature of the goods, the destination and the documentation.
Our detailed guidance to staff sets out the particular risks and
type of response in each case. This is reinforced by quarterly
awareness-raising seminars to front line staff on export controls
during which we cover cultural goods. Every month the Metropolitan
Police Art and Antiques Unit provide colour images of UK cultural
objects that are missing or have been stolen. These are circulated
to front line Customs staff at ports and airports. Customs have
had some involvement in the development of the national cultural
objects database and would obviously benefit once it is established.
INVESTIGATIONS
22. Customs are responsible for the investigation
of alleged breaches of export control requirements. Customs have
conducted several investigations into possible breaches of the
export controls on cultural goods but none have resulted in a
criminal investigation. Some recent examples are summarised at
paragraph 25. Regulatory breaches (such as failure to produce
a licence, or incorrect Customs declarations) have been dealt
with by local customs staff.
PENALTIES
23. Offences for breaches of controls fall
into two categories. These are:
— strict liability offences, which
apply when a breach is committed regardless of the knowledge or
intent of the exporter; and
— offences relating to deliberate evasion
of the controls.
The maximum penalties are:
— for strict liability offences, on
summary conviction a penalty of three times the value of the goods
or £1,000, whichever is the greater; and
— for deliberate offences, on summary
conviction a penalty of £5,000 or three times the value of
the goods whichever is the greater or to imprisonment for a term
of up to six months. On conviction on indictment a penalty of
any amount, or imprisonment for a term of up to seven years, or
both.
Customs have powers to compound offences, ie
accept a monetary amount in lieu of pursuing criminal proceedings.
CUSTOMS ACTIVITY
Dealing with suspected breaches of export controls
24. Customs follow up suspected breaches
with appropriate enquiries, often conducted by intelligence or
investigation staff. In many cases, the results of those enquiries
will mean that the goods are released. Customs seizures over the
last four years are:
| 1999-2000 | : 10 consignments totalling 90 objects worth £0.82 million
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| 2000-01 | : 6 consignments totalling 6 objects worth £0.38 million
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| 2001-02 | : 10 consignments totalling 31 items worth £1.2 million
|
| 2002-03 | : 1 consignment totalling 1 item worth £0.56 million
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These are a mix of imports and exports.
Some recent cases
25. The following are example of cases in 2002 and 2003
that were investigated by Customs where for various reasons, ultimately
no seizure was made.
The Old Times Coach
An export licence was granted by DCMS for the export of a
horse drawn coach. DCMS received information that this coach was
back in the UK and was actually the unique "Old Times Coach".
DCMS referred the matter to Customs as a possible offence. A photograph
supplied with the licence application had been doctored to disguise
the coach. Customs got to the point where, in order to progress
the investigation, investigators needed an expert witness statement
to prove that the coach was of Waverley standard[1].
We were unable to obtain such a statement and so could take no
further action.
The King's Warrant for a Patent for Hooke's Watch with Springs
Its US owner had had two previous export licence requests
refused for this manuscript as it was considered to be of Waverley
standard and the owner had turned down a matching offer from the
Clockmakers' Museum. DCMS contacted Customs, as they were aware
that the owner was selling the manuscript and feared it had been
illegally exported. After some investigation Customs discovered
the manuscript in a safety deposit box of a London bank. The manuscript
had never left the UK.
Lewis Carroll Glass Negative
Its owner applied for an export licence but the glass negative
was exported in error by a shipping agent whilst the application
was being considered. Customs accepted that this was not deliberate
evasion. The negative was considered to be of Waverley standard.
Customs contacted US Customs to see whether we could assist DCMS'
efforts to negotiate its return but without success. The negative
is still in the USA and its owner has been told that the negative
is liable to forfeiture if it returns to the UK.
Blake Painting
The painting "God Blessing the Seventh Day" was
bought by a US national for £650,000. During discussions
between the owner and the Tate Gallery he withdrew his application
for an export licence. The painting was subsequently sold to another
US national for £1.3 million. As no similar offer was received
in the UK and there was no evidence to refute the value an export
licence was granted and the painting exported to the US. At DCMS'
request Customs examined the paperwork attached to the export
declaration but found no grounds to prevent the export. Customs
also conducted enquires with US Customs but concluded that this
was a bona fidae sale.
Bulgarian Jewellery and Coins
Customs are currently in the process of returning a recent
seizure of Roman coins and other precious metal objects illegally
exported from Bulgaria. In this case Customs seized the goods
at importation because they had not been declared and were of
significant value, thereby avoiding revenue due on such goods.
LOOTING OF
IRAQI ANTIQUITIES
AND CUSTOMS
ROLE IN
ENFORCING THE
IRAQ (UN SANCTIONS)
ORDER 2003
26. After the Secretary of State for Culture Media and
Sport wrote to the Economic Secretary in April 2003, Customs alerted
all front line staff to look out for looted Iraqi antiquities.
We backed this up with a similar message through our suspect information
system, which is relayed to all detection staff. We circulated
the emergency Red List of Iraqi Antiquities along with the DCMS
statement "Safeguarding Iraq's Cultural Heritage".
27. Customs attended a meeting organised by a British
Museum/UNESCO on 29 April 2003. We also attended a briefing at
the US Embassy which highlighted the goods that were missing.
We relayed details of these items to our front line staff.
28. For commercial imports, Customs also set a profile
(a "flagging" mechanism) on CHIEF, our electronic freight
control system to identify any possible illegal imports of cultural
objects from Iraq and its surrounding countries. Where profiles
are activated Customs officers are directed to a hyperlink to
the Interpol / International Council of Museums Iraq Red List.
We have had further contact with the Art and Antiques Unit to
share intelligence and ensure our profiling is up-to-date.
29. To date Customs have not detected anything that we
believe to be looted Iraq antiquities and we have not received
any intelligence of trafficking in such goods into the UK. However,
we have been involved in the following two importations that attracted
media interest.
Statue of Saddam Hussein—In early June there were press
reports of a statue of Saddam on display at a Marines barracks.
DCMS identified it as a cultural object under UN Security Council
Resolution 1483 and Customs were asked why we had allowed it to
be imported. The statue had been cleared by Customs on arrival
on 30 May 2003. At that time, the original Iraq UNSCR (No 661)
had been lifted and, although UNSCR 1483 had been passed, the
enabling Order was not in place. The statue had been declared
to Customs and had no significant commercial value. Customs therefore
had no powers to act.
Iraqi Display Weapons—On 17 April 2003, whilst UNSCR
661 was still in force, Customs staff at Heathrow seized a consignment
of five firearms and a number of swords and daggers being smuggled
from Kuwait to the USA. Two of the firearms were gold plated.
This incident was reported in the UK press shortly after publicity
that US forces operating in Baghdad had discovered such weapons,
said to belong to Uday Hussein. Customs cooperated with US Customs
in a "controlled delivery" to their destination in a
successful operation to identify who was behind the smuggling
attempt.
CUSTOMS RESOURCES
30. Customs are responsible for the enforcement of a
wide range of prohibitions and restrictions on the movement of
goods. In deploying their resources against these responsibilities
Customs must take account of both the Government's key priorities
and how the resources they deploy can make as effective a contribution
as possible to the overall enforcement effort. Customs are changing
emphasis from static based detection staff to flexibly deployed
teams that are fully mobile. Deployment is on the basis of risk
assessment, driven by intelligence.
31. Some officers, such as members of the Heathrow Export
Enforcement Team focus on freight exports. Much of their effort
is directed against strategic exports such as arms, dual use goods
and UN sanctions, but they may also deal with exports of cultural
goods. Customs' Detection staff, as part of their multi-functional
responsibilities, undertake anti-smuggling controls at import
and export. With the exception of new Detection teams targeting
illegal imports of meat and other products of animal origin, Customs
do not assign dedicated roles to officers but they are deployed
flexibly on a mobile basis and are responsible for detection of
the full range of import and export prohibitions and restrictions
and revenue evasion.
32. It is our policy that when an officer detects what
they suspect to be cultural objects, they seek advice from DCMS
Export Licensing Unit on whether the goods are licensable. If
there is an issue of expert identification of the item, our normal
practice is to seek expert advice from bodies such as the British
Museum. We do not believe that there is a sufficiently strong
case to justify employing such experts "in-house". We
believe it is more effective to focus front line staff on detection
techniques, awareness of their wide range of responsibilities
and awareness of, and responsiveness to particularly topical issues
such as Iraqi antiquities.
LINKS WITH
ORGANISED CRIME
33. The National Criminal Intelligence Service ("NCIS")
are the lead enforcement authority on intelligence related to
organised crime. Customs will investigate any quality intelligence
relating to the international trafficking in cultural objects
by organised criminals. Customs share NCIS' assessment that serious
and organised criminals may be attracted to the global cultural
property market and are alive to the potential use of cultural
goods as a relatively safe means of payment or moving assets.
Under the Proceeds of Crime Act 2002 Customs carry out controls
at export for cash associated with criminal activity. However,
neither Customs nor NCIS have any specific intelligence of links
between cultural goods and money laundering, drug or arms trafficking.
UNESCO CONVENTION
34. The two articles in the UNESCO Convention of particular
relevance for Customs are Article 6 on exports and Article 7 on
imports. In considering these provisions, Customs' major concern
is that the definitions in the Convention are not sufficiently
clear to provide a sound basis for enforcement.
35. The UK already has an export control system that
goes much of the way to meeting Article 6 on exports. This is,
however, based on EU and national definitions rather than the
Convention definitions. Should the Government decide to implement
an import licensing system based on by UNESCO articles, Customs
would regard as essential elements the existence of clear and
unambiguous obligations upon the parties, definitions of which
goods would require a licence and a technical specification unit
to give definitive rulings in specific cases.
36. Customs have had one case which might typify the
sort of case envisaged under Article 7. In 2002 at the request
of the Australian Federal Police, Customs returned a traction
engine that had been illegally exported from Australia. Although
there was no UK Customs offence, Customs co-operated under powers
provided in international assistance cases by the Criminal Justice
and International Cooperation Act 1990.
HM Customs and Excise
10 November 2003
1
The "Waverley criteria" form the test for nationally
significant cultural objects. Back
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