Fraud and theft: Theft
At the time of writing all the evidence suggests that most illegal sales of undutiedtobacco products involve smuggled cigarettes and Hand Rolling Tobacco (HRT). There islittle theft or fraud involving registered premises. Although this should give you somesatisfaction, it should not be a reason for you to relax your controls. The potentialrisks to the revenue associated with registered premises are considerable and may becomemore real if the measures taken against smuggling are successful. The firstline of defence against theft rests with the traders security staff. It is likelythat theft from registered premises will involve a revenue offence requiring action onyour part and, in more significant cases, by the National Investigation Service (NIS).
Large-scale thefts imply the existence of established routes of disposal, leading to theeventual sale of the stolen product to members of the public. Although such routes aresignificant and may lead to the discovery of other frauds or offences, you must involvethe NIS at an early stage.
Although thefts from registered premises may be rare and small scale because of thecontrols and security measures in place, the theft of tobacco products sent fordestruction may be easier to arrange and conceal.
All members of the Department should be alert at all times to any abnormal practices, inrelation to the distribution and sale of tobacco products that indicate possible fraud.The following are examples of such practices.
- Sales of cigarettes or HRT that do not bear a fiscal mark (see section 12000). These are likely to be smuggled, illicitly diverted to home use without payment of duty, or sold in breach of the rules on personal imports.
- Sales of any products at a price low enough to suggest that duty may not have been paid, after making due allowance for the usual run of cut-price offers. Although such products may have been stolen from duty-paid stocks in which this Department would have no direct revenue interest, the avenue of disposal could equally be used for non duty-paid products and may be worth investigation.
- Sales of vending machine packs of cigarettes (eg packs of 5, 18 etc) other than from a vending machine.
- Finally (and perhaps the most obvious) sales by street vendors, persons at car boot sales, and clientele at pubs or clubs and the like.