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HM Customs and Excise Criminal Investigations and Prosecutions

Volume 508: debated on Tuesday 6 April 2010

My right hon. Friend the Attorney-General has made the following written ministerial statement:

On 15 July 2003 Lord Goldsmith, then Attorney-General, announced to the House the publication of the report and recommendations of the Hon. Mr. Justice Butterfield following his review of the then practices and procedures relating to disclosure, associated investigation techniques and case management in Her Majesty’s Customs and Excise’s criminal cases. Lord Goldsmith and the then Economic Secretary to the Treasury, my right hon. Friend the Member for Wentworth (John Healey), had invited him to examine the circumstances that led to the termination of a number of prosecutions relating to London City Bond (LCB) in respect of alleged alcohol diversion fraud, in Liverpool Crown court on 25 November 2002.

During the course of the Butterfield inquiry, a number of unrelated prosecutions in respect of alleged money laundering collapsed in circumstances which gave rise to the same issues, and Mr. Justice Butterfield was invited to examine the additional cases as part of his inquiry.

At the same time, the Metropolitan police were conducting a criminal investigation (Operation Gestalt), which initially commenced in relation to the (LCB) prosecutions but which developed additional strands (Operation Tappert) as their inquiries progressed. As a result, Mr. Justice Butterfield suspended the second part of his inquiry into the money laundering prosecutions (to avoid prejudicing the police inquiry) but completed and published his report of the main part of his inquiry in 2003.

The criminal investigations proceeded until their eventual conclusion in 2009 when, in respect of each strand of the investigations, the Crown Prosecution Service concluded that criminal proceedings were not justified.

The Attorney-General, with the agreement of the present Financial Secretary to the Treasury, my right hon. Friend the Member for East Ham (Mr. Timms), has concluded that it is not necessary or desirable to invite Lord Justice Butterfield (as he now is) to complete the second part of his inquiry. Among other reasons, the passage of time means that any review would be focusing on practices which existed some years ago that have long since changed, and which were essentially of a similar kind to those examined in the report published in 2003. Moreover, the functions of HM Customs and Excise have since passed to Her Majesty’s Revenue and Customs—which is subject to the same inspection and complaints regimes as other law enforcement bodies such as the police—to the Serious Organised Crime Agency and the UKBA.

Finally, a key recommendation of the Butterfield Report, that the prosecution function of HM Customs and Excise should be carried out by a wholly independent prosecuting authority to restore confidence in fair and effective prosecutions, has been implemented successfully under the leadership of David Green QC. The Revenue and Customs Prosecutions Office, established in 2005, now forms an important part of the Crown Prosecution Service under the Director of Public Prosecutions.