Tobacco smuggling - Home Affairs Committee Contents

Key Facts

·  Tackling Tobacco Smuggling-building on our successes: A renewed strategy for HM Revenue and Customs and the UK Border Agency was published in April 2011. Within the joint strategy, HMRC has overall responsibility for delivery, while Border Force is responsible for the seizure of illicit tobacco at the border.

·  HMRC estimates that in 2012-13, duty was not paid on around 9% of cigarettes and around 36% of all hand-rolling tobacco smoked in the UK, with associated revenue losses of approximately £2 billion.

·  The National Audit Office's June 2013 review, Progress in Tackling Tobacco Smuggling, concluded that HMRC's strategy was logical and set out a wide range of complementary measures to tackle the problem, but that HMRC's approach to deterring and disrupting the distribution of illicit tobacco within the UK was not effectively integrated.

·  John Vine CBE QPM, the Independent Chief Inspector of Borders and Immigration scrutinised Border Force freight operations between March and July 2013. He concluded that there had been a breakdown in communication between Border Force and HMRC at an operational level.

·  HMRC and Border Force are currently "refreshing" the Joint Tobacco Strategy, taking into account the change in risk and modus operandi of smugglings, along with lessons learned from the current strategy.

·  In the Government's 2012 consultation on standardised or 'plain' packaging of tobacco products, opinion was almost equally divided on whether standardised packaging would increase the supply of, or demand for, illicit tobacco. HMRC's assessment is that plain packaging is not going to create any new risks for its operations, but it could well change the profile of the illicit market.

·  The revised European Tobacco Products Directive governing the manufacture, presentation and sale of tobacco and related products was adopted in February 2014. It introduces an EU-wide tracking and tracing system for the legal supply chain and visible and invisible security features.

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Prepared 14 June 2014