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HMRC internal manual

Tobacco: Anti-smuggling or the duty to avoid facilitating smuggling

Initial Notices: What happens after an initial notice has been issued?

Following the issuing of an initial notice a tobacco manufacturer has six months in which to address the reasons for the notice being issued. During this period the tobacco manufacturer should thoroughly review their supply chain policy to ensure that they have included any reasonably practicable measures to improve their controls. We should actively encourage the tobacco manufacturer to discuss the content of the notice with us regularly during this period, and any steps they plan to take to address the matters raised in the notice. We may comment on these steps but should stress that it is ultimately the tobacco manufacturer’s responsibility to make such changes that they deem to be appropriate.

It is important during this period that LBS continues to collate and evaluate all available information, as at the end of the six-month period, we have 45 days in which to decide if the tobacco manufacturer has taken sufficient steps to comply with their legal duty.

The six-month period is deliberately generous to allow a tobacco manufacturer ample time to identify and put in place any new controls they need to introduce. However, we need to bear in mind that some changes, such as to enhancements to computer systems may take some time to develop, and consequently the impact of some changes may take some time to be realised. This has implications for stock already in the supply chain and any notified seizures made after the date of the Initial Notice. If we are satisfied that these arise from the same failings that gave rise to the Initial Notice and the tobacco manufacturer is already taking actions to address the reasons for that initial Notice being issued, then we must have regard to this in determining whether a penalty is issued at the end of the initial notice period; and if a penalty is issued – in determining the amount of that penalty (section TOBCSC8000).

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