"“We have lent a huge amount of money to the U.S. Of course we are concerned about the safety of our assets. To be honest, I am definitely a little worried.” "

Chinese premier Wen Jiabao 12th March 2009

""We have a financial system that is run by private shareholders, managed by private institutions, and we'd like to do our best to preserve that system."

Timothy Geithner US Secretary of the Treasury, previously President of the Federal Reserve Bank of New York.1/3/2009

Friday, January 26, 2007

Cigarettes - Smuggling - Tax Avoidance - Prison - Confiscation - Satisfied ?

Cigarette smuggling is big business. It is widely claimed that 16% of UK cigarette consumption is smuggled. 1 in 6 cigarettes and about half of hand-rolling tobacco smoked in Britain is illicitly imported resulting in a net loss to HM treasury of more than £2 billion a year. (1) The World Bank states that probably one third of internationally traded cigarettes (355 billion per year) are smuggled and sold to the consumer illegally and the sellers have avoided duty in some fashion.

This year the HM Revenue & Customs (HMRC) will probably seize 2 Billion smuggled cigarettes which they judge to be some 10% of cigarettes entering the country illegally.

Contrary to popular belief - bootlegging white van man represents a fraction of a percent of this trade. The dominant route is by large-scale ‘container fraud’ in which duty is not paid in any jurisdiction and cigarettes are smuggled in container loads. Legitimate cigarettes are ‘lost’ in transit and re-enter Britain described as non-dutiable goods. Counterfeit cigarettes, indistinguishable from the genuine article, are manufactured in the Far East (including North Korea) and Eastern Europe and are smuggled into the UK in large quantities - it is claimed they reprsent over 50% of smuggled product.,

A couple of likely lads (who probably were not the prime movers and financiers) were dealt with today, and helped to fill up the gaps in Mr Reid's overflowing prisons.

Wynne Dale John Wynne, (27) a coach builder, of 8 Ribbesford Crescent, Bilston, Wolverhampton, West Midlands,was in a Ford Fiesta in a lay-by near Junction 4 of the M5, in Worcestershire on the 18th May 2006... nearby Attila Budi (35) a LGV driver from Hungary was in a lorry containing 7.5 million Lambert & Butler cigarettes which they had smuggled into the UK and avoided Excise duty of £1.2 Mn.

They were intercepted by HM Revenue & Customs HMRC assisted by Plod.

The men pleaded guilty in Worcester Crown Court today, Buda was jailed for 2 years and Wynne to 4 years and 4 months in prison.

Over in Bradford on Wednesday Gerrard Strange, 51, who had been MD and CEO of Bradford-based textile firm Listers plc, was jailed for 33 months in November 2005 after pleading guilty to smuggling of cigarettes inside furniture from Poland and evading duty totalling £665,000.

A confiscation hearing on Wednesday heard of assets of his home in Shipley and other properties in Wexford in the Republic of Ireland and South Africa and Judge Prince finally agreed he would have to pay up almost £98,000 in relation to his share in the properties with an additional £3,000 for some paintings and a further £13,300 in respect of money he had given his son to help him buy a flat over the next 6 motnhs or face 3 further years in prison.
Strange's finance director Richard Ramsden, was sentenced to 120 hours community service work but avoided a consfiscation order.

The Wynne's and Buda's of the world are of course facilitated by cigarette manufacturers like Imperial Tobacco and Gallaher, who export brands that are only supported in the UK - Imperial Tobacco's Superkings and Regal, Lambert & Butler (complete with UK specific health warnings- see pic ) to phantom markets in the Balkans, Baltic States, CIS States and Southern Africa which then return illegally to the UK.

In 2004-05 Imperial's Superkings accounted for 22% of the genuine UK brands seized by Customs officers - two Gallaher brands – Sovereign and Dorchester accounted for 25% and 16% respectively of seized cigarettes (2)

In the 2006 Budget the Chancellor got tougher with the UK cigarette companies and they have signed a Memoranda of Understanding (MoU) with the UK Gubment aimed at providing greater control - although the companies are not legally bound by them! (3)

The EU have got Philip Morris to sign a legally binding agreement to stop its products being illegally imported into the European Union. This was a trade off arising from an EU dropping a lawsuit against Philip Morris over the smuggling of cigarettes into the European Union. (4)

Of course this is only a segment of an international trade which invloves many cigarette manufacturers - R J Reynolds (Camel) and Philip Morris ( Marlboro Men) who have retqained the services of Mrs Margaret Thatcher as a consultant have been successfully prosecuted , latterly under the Racketeer Influenced and Corrupt Organisations Act RICO laws.

(1)New responses to new challenges: Reinforcing the Tackling Tobacco Smuggling Strategy. HM Treasury, March 2006. www.hm-treasury.gov.uk

(2)HM Revenue & Customs Annual Report 2004-05

(3) ASH BAT and Tobacco Smuggling also see this astonishing expose of BAT

(4) ASH Anti - Contraband and Anti-counterfeit agreement EU/P Morris

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(C) Very Seriously Disorganised Criminals 2002/3/4/5/6/7/8/9 - copy anything you wish