Memorandum from the Revenue and Customs
Prosecutions Office
ENFORCEMENT
a. How effectively is the legislation
being enforced against those who have no regard for the letter
of the law? What challenges are there to bringing forward successful
prosecutions?
b. The legislation increased the maximum
penalty for breaking export controls from 7 years to 10 years.
What impact has this change made?
GENERAL
1. Each case that Revenue and Customs Prosecutions
Office (RCPO) receives from HMRC is reviewed to make sure that
it right to proceed with a prosecution in accordance with the
Code for Crown Prosecutors. The Full Code Test has two stages.
The first stage is consideration of the evidence. If the case
does not pass the evidential stage, it must not go ahead no matter
how important or serious it may be. If the case does pass the
evidential stage, the reviewing lawyer must go on to consider
if a prosecution is needed in the public interest.
2. The reviewing lawyer must also consider
what the ramifications of the Criminal Procedure and Investigations
Act 1996 and the Attorney General's guidelines on Disclosure have
on the particular case. A defendant is entitled to have disclosed
to him any material that undermines the prosecution case or which
may assist the defence case. In addition, if the reviewing lawyer
is aware of material that is held by a third party such as another
government department, that material also has to be considered
for disclosure. There can be particular difficulties in cases
where material is held by a foreign agency especially when the
material is of assistance to the defence. The foreign agency is
under no obligation to disclose the material, and the risk of
the foreign agency refusing to cooperate could lead to an unfair
trial.
3. The reviewing lawyer must also have regard
to the European Convention on Human Rights and in particular Article
6, the right to a fair trial, and to the Human Rights Act 2000,
which ratified the Treaty in domestic law.
THE RELEVANT
LEGISLATION
4. The legislation, which deals with offences
for breaches of controls, can be found in the Customs and Excise
Management Act 1979 (CEMA) and in Orders made under the Export
Control Act 2002.
5. By virtue of Section 68(1) CEMA an offence
is committed if any goods are exported or shipped as stores or
brought to any place in the UK for the purpose of being exported
or shipped as stores contrary to any prohibition or restriction
in force. This is a strict liability offence, which is punishable
on summary conviction to a maximum penalty of three times the
value of the goods or £1,000, whichever is the greater amount.
In addition the goods in question are liable to forfeiture. This
offence applies whenever a breach has been committed regardless
of the knowledge or intent of the exporter.
6. By virtue of Section 68(2) CEMA an offence
is committed if any person knowingly concerned in the exportation
of goods, with intent to evade any prohibition or restriction
in force shall be guilty of an offence and may be arrested. This
is an `either way' offence, which may be prosecuted either in
the Magistrates' Court or the Crown Court. The penalty provisions
for this offence are to be found in Section 68(3) CEMA as follows:
— On summary conviction, to a penalty
of £5,000 or of three times the value of the goods, whichever
is greater, or to imprisonment for a term not exceeding 6 months
or to both.
— On conviction on indictment to an
unlimited fine, to imprisonment for a maximum term of 10 years
or to both.
7. The provisions of section 68 CEMA bite
in relation to:
— Goods that are listed in the Orders
under the Export Control Act 2002 as being prohibited to be exported
without a licence
— Goods that are for a Weapons of Mass
Destruction (WMD) end user, where it can be proved beyond reasonable
doubt that the exporter has grounds to suspect a WMD end use.
It should be noted that the provisions of Section 68 do not apply
to persons other than the exporter having such suspicion ie a
broker.
— Export prohibitions and restrictions
created by Regulation (EC) 1334/2000 on the export of dual—use
items, and UN sanctions and embargos. These, together with most
offence provisions in the orders under the Export Control Act
2002 are "assigned matters" as defined in CEMA.
THE EVIDENTIAL
STAGE
8. The reviewing lawyer must be satisfied
that there is enough evidence for there to be a `realistic prospect
of a conviction' against each defendant on each charge. They must
consider what the defence may be, and how that is likely to affect
the prosecution case. A realistic prospect of a conviction is
an objective test. It means that a jury or bench of magistrates
properly directed in accordance with the law is more likely than
not to convict the defendant of the charge alleged.
9. When deciding whether there is enough
evidence to prosecute, the reviewing lawyer must consider whether
the evidence can be used and is reliable, and there will be cases
in which the evidence is not as strong as it first appears. The
reviewing lawyer must consider whether the evidence can be used
in court, or whether it is likely that the evidence will be excluded.
There are certain legal rules, which might mean that evidence,
which seems relevant, cannot be given at trial.
10. The reviewing lawyer must also consider
whether the evidence is reliable; what explanation has the defendant
given? Is the court likely to find the evidence credible in light
of the evidence as a whole?
11. Satisfying the sufficiency of evidence
test can be particularly challenging in prosecuting offences in
this area for the law for one or more of the following reasons:
— It is difficult to prove the destination
intended for the goods in question. There may be intelligence
to show that the goods are going to a country of WMD concern,
although the apparent destination may be innocuous.
— Vital evidence is often located abroad.
Whilst it may be possible for some or all of the evidence to be
obtained by Letters of Request or bilateral Mutual Administrative
Assistance arrangements, the degree of cooperation and the length
of time that it takes to deal with the request can vary from country
to country. In addition, there may be issues as to the provenance
of a particular exhibit, and its subsequent evidential admissibility
in a UK trial.
— Evidence about the specification,
functionality and proposed use of the goods can be ambiguous,
which makes inference of guilty knowledge difficult to draw.
— Exports are sometimes accompanied
by End User Certificates that are supplied by foreign governments,
which are suspected to be false. In these circumstances it is
difficult to prove beyond reasonable doubt that they are false
instruments for the purposes of a prosecution.
— When potential defendants are located
outside the European Union, it can be particularly difficult to
get them extradited to the United Kingdom.
DISCLOSURE ISSUES
12. Disclosure has traditionally been a
significant difficulty in the prosecution of this type of offence
because there is more likely to be:
— Highly sensitive material from the
security and intelligence agencies and the Ministry of Defence.
The material may include information such as details about informants;
the threat posed to the UK interests by a particular state or
individual.
— There may be a history of contact
between the suspect and Her Majesty's Government; the suspect
may have been an informant or a contractor. It is not unusual
in those circumstances for the defendant to say that he was acting
with Her Majesty's Government's knowledge and consent.
— There may be sensitive information
to support a defence contention that he was the subject of an
agent provocateur and that he had been entrapped in to committing
the offence.
— There may be information about exports
with similarities to the current case that would assist the defence
case, but that information may be highly sensitive.
13. When material is considered too sensitive
to be disclosed, the prosecutor may apply to the judge to withhold
the information from the defence (a Public Interest Immunity or
PII application.) The judge must balance the right of the defendant
to have a fair trial against the harm that would be done to the
wider public interest if the material were to be disclosed. Generally
speaking sensitive material of the type outlined above may have
one or more of the following adverse ramifications on a prosecution
case:
— The material may undermine the prosecution
case to such an extent that the reviewing lawyer is of the view
that it would be improper to continue with a prosecution.
— The judge may determine that the
material undermines the prosecution case or that it assists the
defence case and that it should be disclosed on the defence, but
the unused material may be so sensitive that the owner of that
material would object to its disclosure even in an edited form.
This would be fatal to a prosecution case.
— If the material is disclosed to the
defence, the defence may well argue the defendant cannot have
a fair trial, or be able to defend himself properly. For example
the defendant may say that he could not defend himself without
revealing to his co-defendants that he is an informer.
— If a fair trial is still possible
the defence may successfully argue that some prosecution evidence
should be excluded on grounds that it is unfair for the prosecution
to be able to rely on it or alternatively that the prosecution
obtained the evidence by oppressive means.
— Generally speaking, the only sensitive
material that would be protected by a PII application would be
that material that is of marginal significance to the case.
THE PUBLIC
INTEREST
14. Where the reviewing lawyer is of the
view that there is sufficient evidence for there to be a realistic
prospect of a conviction, the reviewing lawyer has to go on to
consider whether a prosecution is required in the public interest.
In cases such as these, public interest militates in favour of
a prosecution in the interest of preventing proliferation of WMD,
conventional weaponry, related technology and materials. The reviewing
lawyer must also consider:
— The age and health of the defendant.
— The likely sentence that would be
imposed on conviction.
— The defendant's role in the offence
and his importance in relation to other persons involved who may
not be available for prosecution.
— Whether an export licence would have
been granted if one had been sought.
— The danger that the goods posed.
— The availability of the goods on
the worldwide market.
— The financial benefit to the defendant.
— Any assets that may be available
for confiscation purposes.
15. The impact that the increase of the
sentencing powers from 7 years to 10 years imprisonment has had
on the commission of these offences is difficult to measure because
of the challenges of prosecuting these offences and their relative
rarity. It is difficult if not impossible to measure how the increase
in sentence has acted as a deterrent.
16. It is apparent that the increase in
the numbers of strict liability offences that have been prosecuted
in the past 12 months has been widely reported in the trade, which
suggest that any prosecution of more serious offences would attract
similar or greater notice.
17. However should such a case be prosecuted,
we believe that the court would have ample sentencing capacity
to deal with the defendant in an appropriate manner. Even in a
serious offence, a sentencing tribunal would be likely to take
a starting point at below the maximum sentence and in most cases
there is likely to be some mitigation, whether on a guilty plea
or on conviction after a trial, so in general terms a sentence
of up to 10 years should provide a significant deterrent. In appropriate
circumstances, it may also be possible to prosecute for conspiracy
to commit offences. Although this would attract the same maximum
penalty as the statutory offence, a court may take a more serious
view of the conspiracy and impose a higher sentence.
CONCLUSION
18. The legislation is adequate to provide
a deterrent in such cases, and in theory the legislation should
not be any more difficult to apply than any comparable legislation.
The challenge lies in finding sufficient evidence for them to
be prosecuted successfully.
November 2006
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