Examination of Witnesses (Question 380-399)
MR KEVIN
FRANKLIN, MR
MARK FUCHTER,
MR DAVID
GREEN QC, MR
DAVID RICHARDSON
AND MS
HELEN WOLKIND
25 MAY 2006
Q380 Linda Gilroy: You have mentioned
that the whole question of prosecution in these cases brings together
all the difficulties that challenge court cases and at paragraph
48 of the memorandum you explain that before initiating prosecution
the prosecutor has to take into account the public interest in
bringing charges and in explaining the factors you take into account
you state that the courts have not imposed particularly severe
sentences even in relation to goods intended for WMD programmes
and that a cocaine smuggler would get far harsher treatment. Why,
in your view, are the courts taking such a lenient approach, given
the severity of what will flow from the sort of situation that
we have just been discussing?
Mr Green: I think I could answer
that question this way that obviously you referred to drug importation,
obviously it is one of the Government's priorities to reduce the
harm from smuggled drugs and also, of course,—
Q381 Linda Gilroy: Are you suggesting
it is not a priority to try and control exports to countries like
Iran?
Mr Green: I very much hope it
is, but obviously with drugs one is thinking of a parcel of powder
or parcel of pills which people can readily recognise and understand,
but it may be perhaps difficult to give a clear picture of the
threat posed by particular goods to a court and one is dealing
with often a trade where there is often a legitimate trade in
particular goods and they may be standard industrial products,
it is difficult for a court to put it in context and you have
made the point there are relatively few prosecutions under these
heads for reasons I have indicated and it may be that the courts
have a great deal more experience of, for instance, smuggled drugs
than they do of this sort of offence.
Q382 Linda Gilroy: One of the other
areas that this Committee is very interested in is at the other
end of the scale on small arms. I note that one of the criteria
you weigh up is the general availability of the goods on the worldwide
market, so on that basis would someone exporting small arms without
an export licence not be prosecuted because small arms are freely
available in the United States?
Mr Green: To my knowledge the
problem here is not export of small arms, certainly our experience
of what one hears of is import of firearms and in those cases
they are taken extremely seriously.
Q383 Mike Gapes: The Serious Organised
Crime Agency has just come in. Given that some of us would think
that exporting military equipment to Iran would be a serious crime,
has that given you any extra powers in terms of confiscation of
assets or other measures that you might be able to use in the
future?
Mr Green: We do have some extra
powers under the Serious Organised Crime and Police Act
power to compel answering questions, power to produce documents
for instance and others relating to people giving evidence who
have been involved in crime, giving evidence for the prosecution
and we intend to make full use of those powers.
Q384 Mike Gapes: What about confiscation
of assets?
Mr Green: Confiscation of assets
we already have very considerable powers in relation to the confiscation
of criminal assets and indeed 35% of the total amount of money
paid over to the Home Office in money confiscated from criminals
came as a result of RCPO confiscation orders of £21 million.
Mike Gapes: I hope you use it for arms'
exports.
Q385 Linda Gilroy: We have been discussing
successful prosecutions and their low number. How many prosecutions
have failed and what can be done to improve the chances of successful
prosecutions?
Mr Green: How many prosecutions
have failed? We have had no acquittals and none have been dropped
for technical reasons. I am often concerned by that, with respect,
with the phrase "failed prosecution". A court may or
may not be convinced by the evidence put before it, that is a
matter for the court. All we can say is five successful prosecutions
from 2000 with the back-up that I referred to, action in other
areas short of prosecution.
Q386 Linda Gilroy: If we are looking
at other international examples, Germany, for instance, appears
to have a much better track record. Is there a systematic exchange
of information with Customs and prosecutors in other EU countries,
exchanging experience and how to improve the possibility of pursuing
successful prosecutions?
Mr Green: Ms Gilroy, you will
be aware that there are such European organisations as Eurojust
and Europol and certainly they provide for the dissemination and
exchange of such information and we also have very good liaison,
certainly on the prosecution side, with our colleagues within
the European Union.
Q387 Peter Luff: In almost every
area of public policy there is a seminal emblematic moment which
defines organisation issue and I suppose earlier this year we
had the tenth anniversary of one of those, the Scott Inquiry
and the super gun report. What lessons did Revenue and Customs
draw from that?
Mr Fuchter: I think there are
two sets of lessons. The Scott Inquiry arose from a dual-use
case, the super gun was obviously a weapon of itself. Very, very
broadly, in terms of lessons relating to the super gun, parts
of it were being made in separate countries and that quickly exposed
the need for greater intelligence sharing as well as greater awareness
of the potential of any such item and of course technical appraisal
of such an item, because I think there was a passage of time,
looking back at the case, when agencies had not really identified
that what was actually being built was a gun. From the Scott
Inquiry there were a lot of lessons around intelligence handling
and improved governance and oversight of our strategic exports
case work and in particular to set out clear separation of responsibility
between the policy responsibilities of my area and the investigation
teams who are under pressure of themselves. We already had within
Customs and Excise, as it was at the time, a tripartite process
for controlling sensitive cases. That tripartite process was extended
to all strategic exports cases regardless of whether they fitted
departmental definitions of sensitive. That led to the formation
of the committee, I think we describe in the memorandum as the
"tripartite committee" and we have now re-named as strategic
goods co-ordination committee, but same thing, chaired by RCPO
and with the various components that sit on that committee. Those,
I think, are the broad lessons from those two.
Q388 Peter Luff: And that tripartite
system is not just a triple lock preventing the initiation of
prosecutions?
Mr Green: I would say, with respect
Mr Luff, it is quite the reverse, it comes in post stop and it
is designed as a forum for exchange of information and the close
monitoring of these cases in the categories that I described earlier.
Q389 Mr Borrow: We heard evidence
from Mark Thomas, the journalist, a few months ago about the proposed
export of 100 stallion trucks by Ashok Leyland from India to Sudan
and my understanding is that Sudan is a country that we should
not be exporting military vehicles to and given that Ashok Leyland
is a subsidiary of a UK company, many members of the Committee
found it strange that a prosecution did not take place and has
not taken place and I wondered if you had any comments on that?
Mr Green: Mr Borrow, you will
be aware that under section 40 of the Commissioners of Revenue
and Customs Act I am unable to discuss cases either under consideration
or which have been rejected. All I would say in relation to that
particular case is that it does provide a very good example of
journalistic endeavour and some anecdotal evidence and some anecdotal
material failing to translate into evidence.
Q390 Chairman: Would that Act prevent
you giving us answer to the question in a confidential memo to
the Committee in the sense that we do see, for example, we know
where all sorts of arms exports go, the ultimate end user, we
see these in strictest confidence as a committee, would there
be any reason why you would not be able to advise us of the exact
position in confidence?
Mr Fuchter: Our advice is that
we cannot even do so in confidence. It is not a question of the
security level at which the conversation takes place, we are actually
clearly constrained from doing so. If I can give the Committee
an assurance, and we are in difficulty here, but in an attempt
to be helpful, and you will tell me if this fails, what HMRC does
do (and I think you have seen this in previous parliamentary answers)
is that we look into all intelligence and all allegations, we
say all credible allegations, but take it from me it is all allegations
involving sensitive goods and sensitive destinations. They will
be subjected to a test I think we laid out in the memorandum that
our intelligence and investigation specialists will firstly assess
if there is evidence of an offence and if there is evidence of
an offence we will adopt that as an investigation, that will be
taken on as a formal criminal investigation and move through hopefully,
if sufficient evidence is available. It will be discussed en route
by the strategic goods co-ordination committee and it will hopefully
move through to prosecution. So I can give you an assurance that
all such allegations involving sensitive goods and sensitive destinations
are considered in that way, if that is helpful.
Mr Green: Equally can I emphasize
we can only proceed where there is evidence or solid evidence
such as we can put before a court.
Q391 Chairman: We understand your
position and I think you understand ours, particularly those of
us who had the pleasure of discussing with Ashok Leyland their
export policy in relation to Sudan as at least two of us on this
Committee have.
Mr Fuchter: To expand on my answer
just a little bit about the ingredients of the offence, the goods
would have to fall within the Act where they would have to be
military listed goods and there would have to be other ingredients
of an offence.
Q392 Mr Borrow: I recognise that
you have got difficulties in terms of the amount of information
you can give to the Committee, but were a minister to ask the
same question would you give the same answer?
Mr Green: I am accountable, Mr
Borrow, to the Attorney General and certainly I would be able
to give him answers on that and indeed in many cases.
Q393 Chairman: Can you speak up a
little, Mr Green?
Mr Green: Forgive me. I was pointing
out that I am accountable to the Attorney General and obviously
he has the superintendence, I work under his superintendence,
I would be able to give answers there.
Q394 Chairman: Do you know anything
that would prevent the Attorney General sending a confidential
letter to this Committee to inform us what you have said to him?
Mr Green: Chairman, with respect,
not offhand.
Chairman: Thank you, that is extremely
helpful.
Q395 Mike Gapes: Do you have anybody
working for you in HMRC on a dedicated monitoring of the internet?
Mr Fuchter: Within the whole of
HMRC I actually do not know the answer to that because we will
have officers engaged on anti-drugs, anti-counterfeiting, anti-tobacco
work who will be using the internet. Access to the internet is
part of the operational toolkit, if you like, so I would probably
have to say "yes". I am unable to explain how many.
Q396 Mike Gapes: Can you send us
a note, please, when you have got more information?
Mr Fuchter: Yes.
Q397 Mike Gapes: Secondly, why not,
in terms of arms' exports?
Mr Fuchter: In terms of strategic
exports, because that is not the role we have agreed with our
partners in the restricted enforcement unit, principally the intelligence
agencies. The task that we have agreed is that it is not required
of us that we spend our intelligence resource looking on the internet
for cases that may be prima facie breaches. That responsibility
under the agreements we have with other departments lies through
REU with the intelligence agencies.
Q398 Mike Gapes: Can I put it to
you that if journalists hypothetically can find things on the
internet which are thought to be in breach of export control regulations
and can write articles about it, it would be perhaps helpful if
you had someone in your department who was actually doing that
so that you could deal with these things before necessarily a
determined journalist was able to discover them?
Mr Fuchter: Yes, to the point
that I would say not within our department, but within the restricted
enforcement unit and the REU contributory agencies, I think that
is absolutely right but, I say again, it is not our responsibility
as we have agreed with REU partners, that lies with the intelligence
agencies. In another area of our responsibilities, endangered
species, in fact we do do such things and we have been tracking
endangered species appearing for sale, for example, on E-Bay.
Q399 Mike Gapes: Is there not an
argument that you perhaps should review your understandings with
other people and therefore you could be more proactive on these
matters?
Mr Fuchter: We would always be
prepared to discuss with the intelligence agencies the question
of who does what, should we be doing something, are we all assuming
that we are doing things that we are not or whatever, we would
always keep that under review, yes.
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