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HMRC internal manual

Tobacco: Control of Supply Chains

Introduction: Overview of the legislation

The law places obligations on tobacco manufacturers to ensure, as far as reasonably practicable, that they avoid supplying cigarettes or hand-rolling tobacco to:

  • those likely to smuggle that product into the United Kingdom; or
  • those likely to supply cigarettes or hand-rolling tobacco on to those likely to smuggle that product into the United Kingdom.

Any failure to comply with these obligations may render a tobacco manufacturer liable to a penalty.

The obligations imposed fall broadly into three areas. Tobacco manufacturers are required to:

  • maintain and adhere to a written policy that specifies the actions they will take to ensure that their supply chains, and where practicable the supply chains of their customers are as secure as is reasonably possible;
  • sell their products in quantities that are commensurate with the demand for their product in the destination country including legitimate cross border shopping;
  • furnish to HMRC information relating to notified seizures and any specified brands or countries.

The provisions in the legislation complement the Memoranda of Understanding (MoUs) agreed between three UK tobacco manufacturers and HMRC early in 2006. The legislation is designed to extend broadly similar terms to all tobacco manufacturers without the need of agreeing MoUs with each of them individually.