Examination of Witnesses (Questions 260-267)
HM CUSTOMS &
EXCISE
11 NOVEMBER 2003
Q260 Ms Shipley: You have just said
that a flow of information both ways is what could be improved,
so tell me where the problem is at the moment with the flow of
information both ways.
Mr Fuchter: I am not sure there
is a problem because if there were a problem, it might manifest
itself, for example, with NCIS and we are strategic customers
of NCIS, we inform them also, but we draw on their annual UK threat
assessment. If there were to be sitting in NCIS, for example,
a number of intelligence logs that are going nowhere, there are
no operational units to adopt them or develop them, then that
would indicate that there is a problem. If there is no intelligence,
is it because no one is looking or because it is not happening
on the huge scale that anecdotally people suspect? That is probably
the challenge we are facing. We are not swamped with referrals
from, for example, the London market saying, "Hey, Customs,
this is another thing you missed". I know that sounds reactive,
but it is an indicator that we are not getting deluged, and hopefully
we would not wait until we are deluged, but there are no indicators
which suggest we are looking in the wrong direction or anything
like that.
Q261 Mr Doran: Hearing other witnesses
in this area, it seems to me that there are two clear problems.
One is the lack of a national strategy which I get the feeling
we are slowly groping towards, but we have still got some way
to go, and the other is the relatively low priority in some areas
which is given to the theft of or dealing in cultural objects.
When I look at your own submission, and this is not something
I blame Customs & Excise for because you are not responsible
for your own legislation, but it does strike me that there are
a number of gaps in the way the system is operating at the moment.
In your evidence in 2000 it was quite clear that you had no statutory
right to interfere unless there was some other taint, if you like,
to the objects, and an association with firearms I think is mentioned
in your paper. In the latest one, I see at paragraph 11 of your
submission you say, "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)". That seems
to me like a fairly significant hole in the dyke.
Mr Fuchter: There are several
things there. In terms of an overall strategy with DCMS, we would
welcome it if there is to be more of a "joined-upness".
We think we are very joined up in terms of what we do, and I gave
you some examples of that, but we would certainly welcome the
development of a strategy and perhaps, as you said earlier, there
is always room for improvement. On the specific point in paragraph
11, what we are trying to relay there is that normally Customs'
law, if you like, is built around, "Let's establish something
in relation to the goods" because it is all about goods.
If they are controlled either by means of a restriction or a prohibition
over which you can lay enforcement powers to do with prosecution,
or other action against the owner/importer/smuggler of those goods,
they are two separate things. The point there is that in the new
Act, it could have said, "Well, in section 1(1) let's create
a prohibition on the importation of tainted goods", but I
have to say that Customs fully accept the complexity had that
been the option that was taken, so I do not think it is a loophole
per se. It is probably a case of standing back and looking
at the options being an import licensing regime, a complete prohibition
or dealing with it, as is the option, in terms of tainted goods.
It looks to me, coming at this from a Customs officer's point
of view, that this was probably the only realistic starting point,
and that is my interpretation, in terms of putting into place
some import controls on cultural goods. At least we can now act
in terms of enforcement. I think there would be challenges as
to how tainted goods looks in practice and is definable in a court
of law. From our point of view, prohibition is easier, but we
fully accept the DCMS representations that to have everything
prohibited of this nature at Heathrow would cause the holding
up of passengers and goods in a way that would attract a lot of
criticism.
Q262 Mr Doran: It seems to me that
even if you have information that something is tainted—that
is my interpretation of your paragraph 11, that something is tainted—you
do not have the power to search for it.
Mr Fuchter: That is right.
Q263 Mr Doran: What is the point
of it and how does it work?
Mr Fuchter: To some extent we
need to wait and see, but our assessment is that in terms of exports,
there will very probably be suspicion in terms of an export licensing
matter which will enable us to activate our powers in relation
to exports, so I do not think there is a problem. With imports
there could be some isolated cases, but again our best assessment
at this stage is that there will be implications which will allow
us to use those powers, for example, a false declaration or valuation
of the goods. To use an example of one of the cases we have referred
to, the Bulgarian jewellery and Roman coins, although not of particularly
high value, under the future operation of this Act we would still
be able to act because there was a failure to declare and those
goods were liable to revenue, so there was a breach of the revenue
and that is why we acted. It probably sounds a bit belt and braces,
but against an import licensing regime, which our understanding
is no one is really ready for yet (there is a lot more work, I
suspect), and a prohibition, which would probably be impractical,
we think is a way forward.
Q264 Mr Doran: It does not sound
like belt and braces to me, but I can understand the DCMS situation,
and I am sure you do as well. London accounts for something like
25% of the international arts market which is a very substantial
proportion and nobody wants to see that damaged, but we do want
to see it cleaned up. My concern is that if we are going to clean
it up, we need to make sure that all the points in the system,
firstly, are working together and, secondly, that they understand
the importance of this trade because we heard some information
in private from the Metropolitan Police unit which deals with
this area and they are becoming more and more concerned that the
trade in illicit objects is becoming linked to the drugs trade.
It is another way of transferring money. Is that something you
are aware of?
Mr Higgins: Under the UK threat
assessment that NCIS have produced, certainly the potential for
that has been identified and we share that as a potential way
of money-laundering, as it were, through high-value goods. I have
to say, however, that we have found nothing which holds up that
contention at this stage. That is not to say that the opposition,
as I put them, will not get into that. I would venture to suggest
that if that was going on in any particularly big way, particularly
at export, we would have twigged that because we do run export
controls under the Proceeds of Crime Act on the export of currency
and other monetary instruments. We do actually make a lot of seizures
through those checks and I am sure we would have come across cultural
goods as part of that. But I do share that as a potential problem
area.
Q265 Mr Doran: One of the areas of
concern which seemed to come across from the police, it was not
explicit and it was not targeted at Customs & Excise, was
that generally there is a low level of knowledge about what actually
is a cultural object and they are involved with training with
other police forces. What do Customs and Excise do to make sure
their officers are fully aware and fully trained in this area?
Mr Fuchter: Really in terms of
circulating the nature of the goods that are at risk, the specific
goods that may have been stolen and are being sought, I have to
say I will probably take away from this that we need to look again
at that. We feel that it is better to train, as I said earlier,
our officers on techniques. We would be concerned if we tried
to empower them too much in terms of expertise in terms of cultural
goods, but I have to say most of our focus is on enforcement techniques
and detection techniques, relying on an understanding of what
goods are at risk, what goods may have been stolen and what goods
they should be looking out for.
Q266 Alan Keen: When you came before
us in 2000, there seemed to be a difference between Customs &
Excise and the police with regard to that assessment of whether
crime was linked to the import of cultural objects. Have you had
any meetings with the police since that time to find out what
the facts are on it?
Mr Fuchter: We have had meetings
fairly recently, not least to probe, "Are we missing any
intelligence? What is happening? What are the facts?", as
you say, and we are not being told there is a lot of information
that Customs could and should be acting upon. I do not want that
to sound complacent. We are very keen to hear about it and act
upon it and I think our record is pretty good in terms of this.
As I said right at the beginning, it tends to be that we get referrals
more through DCMS and some of those cases that we have summarised
where we have acted upon them, but we are not aware that there
is a pile of intelligence sitting, for example, in any police
force that is not being acted upon.
Q267 Alan Keen: If that is the case
then, should DCMS have a role in getting the facts sorted out?
You are saying one thing and the police seem to be saying another.
Either the police are exaggerating or theirs is just anecdotal
and you were correct in what you have just said, that somebody
needs to reconcile it, or do you think that what the police said
in 2000 was really just off the cuff and not serious?
Mr Fuchter: I would not dare say
that. I have to say intelligence positions do change fairly quickly.
I am talking about the current picture where, for example, we
look at the UK threat assessment and the very real points that
that points up about the potential involvement of organised and
serious criminals, but then we look underneath and see that this
is part of our role to say what should Customs in the round be
doing about this. Well, the first thing we have to do is evaluate
what the "this" is and when we ask for some feel of
quantity, what is at risk, what is going wide, we are not getting
told there is anything underneath the threat assessment, for example,
which certainly talks about the potential, but we are not saying
that people are saying to us that there is nothing underneath
that. It may be it is anecdotal evidence, but equally maybe the
police intelligence relates to matters Customs cannot act upon.
Chairman: Gentlemen, thank you very much
indeed and I am very sorry I missed the earlier part of your evidence.
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