Initial Notices: What happens after an initial notice has been issued?
Following the issuing of an initial notice a tobacco manufacturer has six months from the date shown on the letter 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 supply chain 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 LB continues to collate and evaluate all available information, as at the end of the six-month period, HMRC 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, HMRC need to bear in mind that some changes, such as 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 HMRC 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 HMRC 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.
It is possible to issue a further initial notice, whilst the first initial notice period is still live. It is unlikely however that any issues discovered will be additional weaknesses in the supply chain controls. There must be a new grounds for concern regarding the tobacco supply chain that is not included in the previously issued initial notice. If the tobacco manufacturer can address the issues discovered through successfully addressing the concerns in the original initial notice, no further notice is required. A discussion with the Tobacco Anti Smuggling Compliance Manager and confirmation that an additional initial notice is required should be held, before any approach to the Tobacco Manufacturer.