Examination of Witnesses (Questions 280
- 284)
TUESDAY 27 FEBRUARY 2007
MR ROYSTON
FORD
Q280 Chairman:
Could you tell us which forms of co-operation between the various
government agencies might produce the best result? We have heard
there is not enough co-operation between agencies. Where do you
think it ought to be pointed and targeted, this co-operation,
and by whom?
Mr Ford: I believe that the most effective co-operation
comes through linking HMRC intelligence units and police intelligence
units. This has had enormous results in the Heathrow area where
much of this is perpetrated with the work that Operation Grafton,
part of the Specialist Crime Directorate, have been doing with
HM Customs in Staines where they have a number of intelligence
operations running. If it were escalated to the likes of the Serious
Fraud Office or a specialist unit created to look at this overlap
between tax and commercial crime and fraud, and, of course, the
real world crime, this would be beneficial. We have had situations
where armed hijacks, armed robberies, occur, or warehouse robberies,
ram raids, intimately connected with VAT carousel fraud, and that
crime will be reported to the local police station, the local
CID officers, whom we speak to, and as soon as one begins to explain
what lies beneath this apparent crime, how complex it is and how
much work it might need, you can see their eyes glazing and the
interest waning and the papers closing almost before you. It needs
investigative law enforcement personnel with the time commitment
and the resources because it is extremely complex.
Q281 Chairman:
Do you think HMRC are directing their attention perhaps wrongly?
Should they be shutting down banks rather than concentrating on
extended verification?
Mr Ford: Banking services have been denied in
effect by all the UK banks to mobile phone and CPU traders which
led all of them to First Curacao International Bank in the Dutch
Antilles, which has now been closed it has been widely reported,
and I understand that has produced some extremely interesting
results on the money trail and the money laundering, so quite
how these businesses will continue to trade mobile phones and
CPUs when they cannot get financial services I do not know. Right
now there is no banking in the mobile phone and CPU trade so there
is nothing particularly to investigate.
Q282 Lord Cobbold:
Is the only solution to this problem a complete restructuring
of VAT?
Mr Ford: It is my opinion, and I do not hold
myself out as an EU tax expert, that it does need a complete branch
reform of the EU VAT system. We have to move away from a system
of VAT-free intra-Community trade. This is what drives the fraud,
and it will always drive the fraud. The fact you can obtain something
without paying VAT, you sell it, you receive VAT and you are trusted
to hand it over to your national government. It will always attract
criminals. It always has and always will.
Q283 Chairman:
It was obviously alarming to hear you suggest that some might
find their way into terrorist funding. Do you have any reason
to know of the antiterrorist squads investigating any particular
VAT fraud?
Mr Ford: No, I do not know of any specific investigations
but I have given evidence in discussions to police officers and
I have been aware that that information has been of serious interest
to other agencies. These are personal fears, and I speak as somebody
whose partner is Muslim and who is not prone to Islamaphobia,
having come face-to-face with interviews with traders in the Middle
East who are British nationals, Muslim, and having had disturbing
conversations along the lines that one would certainly characterise
as more extreme religious views, which were somewhat disturbing
to me.
Q284 Chairman:
Mr Ford, can I on behalf of this Committee thank you for the clear
way in which you have answered us. If there is anything you finally
think we have not touched on that you would want us to know, I
will give you that opportunity now.
Mr Ford: No. I think we have had an interesting
discussion.
Chairman: Thank you.
| 
