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HMRC internal manual

Tobacco: Control of Supply Chains

Notified Seizures: Seizures that can be disregarded

Where, following written notification of a seizure to a tobacco manufacturer, the manufacturer can show to our satisfaction that the notified seizure:

  • does not meet the volume criteria; or
  • was manufactured before 1 October 2006; or
  • is counterfeit

then the seizure will be disregarded for the purposes of the supply chain control scheme and the record of notified seizures maintained by the C&S TEAM marked as such.

Seizures may also be disregarded for any other reasons that we consider to be relevant – for example:

  • the products were stolen (from a legitimate supply chain, meeting legitimate needs within a legitimate market);
  • the products had been released back into the market after seizure by the fiscal authorities within another country; or
  • there is evidence that the products have been obtained by the smugglers or other persons operating within the illegitimate supply chain in relatively small quantities from a variety of sources (‘hoovered product’). Evidence for this will include:
  • any obvious signs that master cases have been re-packaged and are not in their original form;
  • a variety of brands and/or batch numbers within any case;
  • any information provided by the tobacco manufacturer.

Before discounting seizures which appear to have come from a number of different sources, LBS should be satisfied that there has not been an attempt to manipulate the goods supplied to make it appear that that is the case. It is possible that in order to avoid supplies ending up as notified seizures, the supplier could ensure that they never supply more than 49kg of HRT or 99,999 cigarettes bearing a single production code to one customer.

For example, a seizure of 100 kg could be made up of a number of different production codes, and the seizure contains 25kg from each code. Before discounting the seizure we should ask the manufacturer to provide us with details of the first customer outside the group. There are a few possible scenarios which might result from this:

  • If it is apparent that the 100kg was supplied to a number of different customers and the goods have subsequently been grouped together before an attempt to smuggle them into the UK, then we should discount the seizure as none of the suppliers have individually supplied sufficient for the seizure to be notified.
  • If the manufacturer’s analysis demonstrates that the 100kg was all supplied to the same customer, then the seizure should stand as it is apparent that the customer is supplying in excessive quantities.
  • If the manufacturer’s analysis demonstrates that the 100kg was supplied to two different suppliers then, again, the seizure should stand as, again, it is apparent that the customer is supplying in excessive quantities.

It is necessary to keep a record of which seizures have been disregarded on this basis, as the overall number, size and nature of seizures is a factor that must be considered in the issuing of an initial notice (section TOBCSC7000) and the calculation of any penalty (section TOBCSC8000). This needs to be considered in the overall context of a tobacco manufacturer’s controls and actions not to facilitate smuggling.

It must be stressed that tobacco manufacturers cannot appeal against notified seizures. If a manufacturer wishes to challenge any notified seizure, they may bring the matter to the attention of a Review Officer or a tribunal following the issue of any penalty.