Tough new sanctions to tackle illicit tobacco trade

LEGISLATION: ILLICIT TRADE

Tough new sanctions to tackle illicit tobacco trade

NEW LEGISLATION WILL BE INTRODUCED IN FINANCE BILL 2021-22 TO TACKLE THE ILLICIT TOBACCO MARKET

Tougher sanctions to tackle the illegal tobacco trade are to be introduced by the government.

Legislation will be introduced in Finance Bill 2021-22 to amend the Tobacco Products Duty Act, giving HMRC the power to make regulations in order to:

- issue financial penalties up to £10k for holding or possessing products that do not comply with the UK’s tobacco track and trace requirements.

- make liable to forfeiture, subject to certain conditions, any tobacco track and trace compliant tobacco products where they are found alongside product that does not comply with track and trace requirements.

- withdraw a retailer’s tobacco track and trace ID, subject to certain conditions, where they persistently contravened the rules, restricting or curtailing their ability to purchase illicit tobacco in the UK.

The plans follow a consultation launched at the end of last year which sought views on the tobacco track and trace system, applying new sanctions for tobacco smuggling and extending the powers of trading standards officers.

HRMC said: “These proposals are expected to have a negligible impact on compliant businesses or civil society organisations as they will incur a one-off cost to familiarise themselves with the changes. This measure makes no change to the requirements on legitimate business under the tobacco track and trace system and there are expected to be no continuing costs.

“This measure is designed to support action against the illicit tobacco market and associated criminality and to reduce associated harm to individuals, communities and legitimate business. Customer experience is expected to remain broadly the same as there is no change in how compliant businesses interact with HMRC.”

The Association of Convenience Stores has welcomed the move. Chief Executive, James Lowman, said: “The illicit market is extremely detrimental to legitimate retailers and we welcome the introduction of tougher sanctions to help eliminate illicit sellers from the market.

“We encourage trading standards officers and HMRC to broaden their outlook on sources of illicit and non-duty paid tobacco products to address and enforce against those trading illicit tobacco in communities, such as criminals selling on streets and from private dwellings.”

The legislation is subject to consultation.