Whittalls Wines Ltd and European Food Brokers Ltd v Revenue and Customs (EXCISE WAREHOUSE : Approval) [2018] UKFTT 0036 (TC)

‘ you are not fit and proper…for the reasons set out in the letters revoking your other Excise approvals and annexes .’

‘ HMRC would be willing to agree to consolidate such a further appeal with those matters presently being appealed under TC/2016/3839 and TC/2016/3840. At this stage, I do not, therefore, see that there would be any cause for delay to the timetable in place for the hearing of those appeals .’

“The Commissioners consider that you are not a fit and proper person to hold excise approvals because the manner in which you have conducted your duty suspended business activities over a very significant period of time has exposed the Revenue to an unacceptable risk of loss through fraud. The Commissioners reached this decision because: a. they do not consider your alcohol due diligence to have been sufficiently robust to guard against the risk of tax fraud or to comply with the Appellants’ responsibilities pursuant to section 10 of Excise Notice 196; b. significant tax losses have occurred within your supply chains over a number of years; c. of irregularities identified in movements of duty suspended goods sold; d. of the concerns that the Commissioners have as to your behaviour and attitude to the excise approvals regime.”

“25. Article 21 of the Excise Directive makes it a condition of a movement under a duty suspension arrangement that the movement takes place under the cover of an electronic Administrative Document (an “eAD”). The Article provides for the consignor to submit details of the intended movement to the authorities in the member state of dispatch, for the member state of the consignee to confirm that the consignee is an authorised warehouse keeper, and for the system to assign a unique administrative reference code (an "ARC") and notify it to the consignor. The consignor is required to provide a printed copy of the eAD including the ARC to the haulier. 26. The Computer system which administers this system is called the “EMCS”

“PRODUCTION, PROCESSING AND HOLDING Article 15 1. Each Member State shall determine its rules concerning the production, processing and holding of excise goods, subject to this Directive… ”

“ According to settled case-law, all trading rules enacted by Member States which are capable of hindering, directly or indirectly, actually or potentially, trade within the European Union are to be considered as measures having an effect equivalent to quantitative restrictions within the meaning of Article 34 TFEU (see, inter alia, Case 8/74 Dassonville [1974] ECR 837 , paragraph 5, and Case C-110/05 Commission v Italy [2009] ECR I-519 , paragraph 33).”

“(1) For the purpose of administering, collecting or protecting the revenues derived from duties of excise, the commissioners may by Regulations under this section (in this Act referred to as ‘registered excise dealers and shippers Regulations)’: (a) confer or impose such powers, duties, privileges and liabilities as may be prescribed in the Regulations on any person who is or has been a registered excise dealer and shipper; and (b) impose on persons other than registered excise dealers and shippers, or in respect of any goods of a class or description specified in the Regulations, such requirements or restrictions as may by or under the Regulations be prescribed with respect to registered excise dealers and shippers or any activities carried on by them. (2) The commissioners may approve, and enter in a register maintained by them for the purpose, any revenue trader who applies for registration under this section and who appears to them to satisfy such requirements for registration as they may think fit to impose. (3) In the customs and excise Acts ‘registered excise dealer and shipper’ means a revenue trader approved and registered by the commissioners under this section. (4) The commissioners may approve and register a person under this section for such periods and subject to such conditions or restrictions as they may think fit or as they may by or under the Regulations prescribe. (5) The commissioners may at any time for reasonable cause revoke or vary the terms of their approval or registration of any person under this section.” [Emphasis Added]

“Without prejudice to the generality of section 100G above, registered excise dealers and shippers Regulations may, in particular, make provision: (a) regulating the approval and registration of persons as registered excise dealers and shippers and the variation or revocation of any such approval or registration”

“any person carrying on a trade or business subject to [the Act] or which consists of or includes . . . the buying, selling, importation, exportation, dealing in or handling of [dutiable goods].”

“( 1) For the purposes of section 100G of the Act, the commissioners may approve revenue traders who wish to deposit relevant goods that they own in an excise warehouse and register them as registered excise dealers and shippers in accordance with section 100G(2) of the Act. (2) A revenue trader who has been so approved and registered shall be known as a registered owner.”

“Conditions and Restrictions.”

“The approval and registration of every registered owner shall be subject to the conditions and restrictions prescribed in a notice published by the commissioners and not withdrawn by a further notice.”

“4. Section 100H provides that such regulations may, inter alia, regulate the approval (and revocation of approval) of persons as excise dealers, and require the keeping of records. 5. The WOWGR regulations put flesh on these bones. Relevantly they provide: (1) for the approval of authorised warehousekeepers who may receive excise goods at, and consign them from, their warehouses; and (2) for the approval of duty representatives who may arrange for relevant goods to be held at an excise warehouse and may act as an agent for the buyer of goods held in such a warehouse. 6. Regulation 17 (1) provides that: "The approval and registration of every authorised warehousekeeper shall be subject to the conditions and restrictions prescribed in a notice published by the Commissioners and not withdrawn by further notice." 7. Regulation 19 (1) makes similar provision in relation to duty representatives. 8. On 1 November 2014 HMRC published a revised Excise Notice "EN196" which set out detailed conditions for approval. Those conditions included one in relation to "due diligence". We shall return to this shortly, but before doing so we should advert to two matters. 9. First, the power given by section 100G to make regulations is for the purpose of "administering, collecting and protecting" excise revenue. The secondary legislation must therefore be interpreted in the light of, but also limited by, that purpose. In this context we note that Mr Kinnear described the purpose of the additional requirements in EN 196 to us as to "ensure that the UK alcohol industry played its part in (i) making it more difficult for criminals to operate, (ii) helping prevent unfair competition from the sale in the UK of diverted or smuggled goods, and (iii) preventing money-laundering". It seems to us that the requirements of EN196 relevant to WOWGR cannot be read as having such a broad scope or purpose. They must be read at least as far as excise approvals are concerned as confined to the purpose of administering, collecting and protecting excise revenue. 10. Second, we have mentioned the authority given by section 100H for making regulations to regulate approval and registration. That section lists, in 14 subparagraphs, particular matters for which the regulations may provide. In relation to some of those matters the relevant subparagraph speaks of matters which may be "prescribed"; section 100H(3) says that "prescribed" means prescribed in the regulations "or as prescribed by the Commissioners under any such regulation". The subparagraph dealing with the regulation of approval does not, however, use "prescribed": it merely says that regulations "may make provision (a) for regulating the approval and registration of persons as registered excise dealers ...". We have, however, taking it as tacit common ground that section 100G and H permit the regulations to delegate the detailed conditions for the continuance of approval to HMRC (by its publication of notices) without the (albeit limited) Parliamentary scrutiny of regulations subject to annulment by either House of Parliament (see section 172 CEMA). …… 13. There is in EN196 a mixture of explanation, advice and conditions or requirements We do not read the passages giving examples of due diligence checks as a requirement that all such checks be conducted or as being exhaustive; the requirements in relation to due diligence are those introduced in paragraphs lettered A, D, E, G, H, I, J, K, L and N above. The central requirement is in paragraph H. 14. The emphasis (by volume of words) in section 10 of EN196 is on the kinds of checks which could be carried out and what concerns might arise from them. However, the words in para H above are in our view sufficient to make clear that the "due diligence" required by the notice consists, not only in making checks and in collecting answers, but in evaluating whether the information received indicates a risk of connection to excise fraud and in taking “mitigating action". 15. This last requirement, to take mitigating action, is, on a quick reading of the notice, obscured by the volume of material in the examples, and it is not elaborated on save as noted in para O. That failure to emphasise that something may need to be done - and that that something may mean not entering into a potential, and potentially profitable, transaction - is a lamentable presentational defect in the notice; but it does not detract from the fact that taking "mitigating action" where a real risk to the collection of excise duty is apparent, can only be construed as including not entering into a trade. 16. That requirement is part of the conditions for the completion of “due diligence” and therefore a condition for remaining an authorised person. 17. Of course, declining a trade may not be the only reasonable response to a perceived risk: further investigation may be called for and be possible. But there may come a time when further comfort cannot be obtained or the enterprise does not wish to seek it. In that case it may be that the only possible mitigation is not to enter that particular trade.”

“ From 1 November 2014 it becomes a condition of your approval as an excise warehousekeeper, registered owner, duty representative or registered consignor that you must: · objectively assess the risks of alcohol duty fraud within the supply chains in which you operate · put in place reasonable and proportionate checks, in your day to day trading, to identify transactions that may lead to fraud or involve goods on which duty may have been evaded · have procedures in place to take timely and effective mitigating action where a risk of fraud is identified · document the checks you intend to carry out and have appropriate management governance in place to make sure that these are, and continue to be, carried out as intended”

“Only persons who can demonstrate that they are fit and proper to carry out an excise business will be authorised or registered.”

“...some consideration must be given to the expression 'fit and proper' person. This is a portmanteau expression, widely used in many contexts. It does not lend itself to semantic exegesis or paraphrase and takes its colour from the context in which it is used. It is an expression directed to ensuring that an applicant for permission to do something has the personal qualities and professional qualifications reasonably required of a person doing whatever it is that the applicant seeks permission to do.”

“ HMRC will assess all applicants (including directors and key personnel) against a number of “fit and proper” criteria to establish: -there is no evidence that the legal entity or key persons involved in the business have been previously involved in significant revenue non-compliance or fraud, either within excise or any other regime. Some examples of evidence we would consider are: - penalties for wrongdoing or other civil penalties which suggest a business does not have a responsible outlook on its tax obligations - previous occasions where approvals have been revoked or refused for this or other regimes - previous confiscation orders and recovery proceedings under the Proceeds of Crime Act - key persons have been disqualified as a director under company law - there are no connections between the business, or key persons involved in the business, and other known non-compliant or fraudulent businesses - key persons involved in the business have no criminal convictions which are relevant (for example, offences involving any dishonesty or links to organised criminal activity). We will normally disregard convictions that are spent provided there are no wider indications that the person in question continues to pose a serious threat to the revenue. An 'unspent' conviction is one that has not expired under the terms of the Rehabilitation of Offenders Act 1974 - the application is accurate and complete and there has been no attempt to deceive - there have not been persistent or negligent failures to comply with any HMRC record-keeping requirements (for example, poor record keeping in spite of previous warnings or absence of key business records) - the applicant, or key persons in the business, have not previously attempted to avoid being approved and traded unapproved - the business has provided sufficient evidence of its commercial viability and/or credibility. We will not approve applicants where we find that they cannot substantiate that there is a genuine plan to legitimately trade from the proposed date of approval - there are no outstanding, unmanaged HMRC debts or a history of poor payment - the business has in place satisfactory due diligence procedures covering its dealings with prospective customers and suppliers to protect it from trading in illicit supply-chains (see section 10 for more information about due diligence) ‘Key persons’ are those who play a key role in the operation of the business to the extent that they can be seen as one of its ‘guiding minds’. For example, they have authority and responsibility for directing and controlling the activities of the business or day to day management. It also includes significant beneficiaries of the business who are not directors or partners etc. Applicants for authorised excise warehousekeeper status will also need to demonstrate the following before approval can be granted: · they are able to provide adequate financial security for their warehouse premises as required by HMRC (see section 4.5) · they have an accounting system that satisfies HMRC requirements · they have adequate IT infrastructure in place which is sufficient to support the business an HMRC systems such as the Excise Movement and Control System (see section 3.3.1) The above lists are not exhaustive. If we are not satisfied with the information provided to us, we may refuse to authorise you. In addition, if you fail to provide us with the information requested, we will place your application on hold until the information is received. We will notify you of the reason or reasons for the refusal. ”

“ We can withdraw or vary your authorisation immediately, at any time, for reasonable cause. If we decide to withdraw your authorisation, as a concession, we may give you a period of notice. If we withdraw your authorisation we will inform you in writing giving our reasons for our action. We will offer you a review of our decision or you can appeal direct to the independent tribunal (see section 11). You must destroy your certificate of registration on the day your authorisation ceases. Unless another authorised excise warehousekeeper agrees to operate the premises with immediate effect, you will be liable for the duty on all the stock in your excise warehouse. Any changes of authorised warehousekeeper must be notified to the EPT within adequate time for the change to be made. Even if you lodge an appeal against the withdrawal of your authorisation you will cease to be an authorised excise warehousekeeper from the date of the withdrawal.”

“(n) any decision for the purposes of section 92….(approval of warehouses) - (iii) for the withdrawal of any such approval or consent; (p) any decision for the purposes of section 100G. . . as to whether or not . . . any person is to be, or to continue to be, approved and registered.”

“First, the Tribunal's powers are only exercisable where the decision is one which could not reasonably have been arrived at. I will refer to this by way of shorthand as the "unreasonableness test". That was described in the submissions before us as providing for a "quasi-judicial review" standard. That may be true in a sense, but it is capable of being misleading for reasons which will become apparent in due course. Whatever label is used, the fact that the criterion for the Tribunal's intervention is formulated in terms of unreasonableness reflects the fact that the management of the excise system is a matter for the administrative discretion of HMRC. The decision whether a registered owner remains a fit and proper person to trade in duty suspended goods is a good example of the kind of decision which the HMRC are peculiarly well-fitted to judge, since it requires what is necessarily to some extent a subjective – albeit evidence-based – assessment of such matters as the attitude of the trader and its principal employees to due diligence issues and their sensitivity to the risk of becoming involved, albeit unintentionally, in unlawful activities. ”

“ The test was whether, in the light of UWS' breach of condition 1, Ms Martin's decision was one at which she could not reasonably have arrived; it is not sufficient that we might arrive at a different decision ourselves. The question to be asked was whether Ms Martin had taken into account an irrelevant factor, had ignored or failed to give adequate weight to a relevant factor, or had misdirected herself as a matter of law: see Customs and Excise Commissioners vJH Corbitt (Numismatists) Ltd [1980] STC 231 at 239. It was not possible to say that she had committed any such errors, and it followed that her decision should stand.”

“It was conceded by Mr Engelhart, in my view rightly, that where it is shown that, had the additional material been taken into account, the decision would inevitably have been the same, a tribunal can dismiss an appeal……I cannot equate a finding ‘that it is most likely’ with a finding of inevitability.”

“30……. Thus, in John Dee Ltd v CCE [1995] STC 941 , a case which concerned an appeal originating in the VAT and Duties Tribunal, the Tribunal had concluded that the Commissioners had failed to have regard to additional material relating to the Appellant’s financial information. Neill LJ (with whom the other Lords Justices agreed) held that counsel for the company contesting the security requirement in that case had been right to concede that where it is shown that, had the additional material been taken into account the decision would inevitably have been the same, a tribunal can dismiss an appeal. 31. Nevertheless, in our view where the tribunal has found a decision to be unreasonable in the sense outlined at [28] above then unless the circumstances clearly demonstrate that HMRC would be bound to make the same decision the proper course to take is for the Tribunal to direct that the decision concerned should be reviewed again. If there is any doubt on the point, the matter should be determined in favour of directing a further review.”

“38. ………………... There is nothing in section 16 to suggest that it confers a different jurisdiction in restoration cases than it does in other appeals to which it applies. The construction of section 16 which ensures its operation satisfies the requirements of Article 6 in the case of restoration cases cannot then be ignored if the circumstances do not fall within Article 6 or if the case is not a restoration case. Further Article 6 applies to a trial of a person's "rights and obligations" which seems to us to encompass rights and obligations in relation to dealings with (or the proscription of dealings with) excise goods, and thus to invite the same construction of section 16 in cases concerning excise approvals as that adopted in Gora . …………………………………………………….. 40. We conclude that our obligation is to find the facts on the evidence presented to us and to determine, in the light of those facts, whether the relevant decision was reasonable. That, however, does not require us to assess the review decision in the light of events which occurred after it was made unless those events shed light on matters which were relevant to the decision at the time it was taken.”

“As the FTT also correctly identified at [93] of the FTT 2016 Decision, in Balbir Singh Gora v C&E Comrs [2003] EWCA Civ 525 , Pill LJ accepted that the Tribunal 20 could decide for itself primary facts and then go on to decide whether, in the light of its findings of fact, the decision on restoration was reasonable. Thus, the Tribunal exercises a measure of hindsight and a decision which in the light of the information available to the officer making it could well have been quite reasonable may be found to be unreasonable in the light of the facts as found by the Tribunal. In our view, this principle is equally applicable in the case of a decision to revoke a supplier’s RDCO status.”

“69.I do not agree. The Tribunal have done more than direct that Mrs Florence's decision ceased to have effect. They have purported to reverse it. That is something that they had no jurisdiction to do. To make this plain it is only necessary to contrast subsection (4) of section 16 with subsection (5), which provides: "In relation to other decisions, the powers of an appeal tribunal on appeal under this section shall also include the power to quash or vary any decision and power to substitute their own decision for any decision quashed on appeal."”

“ as a minimum the power to direct that a decision shall cease to have effect without a new review must be exercisable where on the facts no real exercise of discretion remains to be exercised by the Commissioners. This would be the case where the decision was literally one which the Commissioners could not reasonably have arrived at because the only possible decision was the reverse. An example would be an appeal against a refusal to restore a vehicle where the Tribunal concludes after hearing the evidence that the owner of the vehicle was wholly unaware that a passenger was smuggling .”

‘…the most appropriate order to make is to require a wholly fresh review of the decision by an officer of HMRC unconnected with the previous decision, after giving an indication of all outstanding matters of concern on the application (including as to the suitability of the Appellant) and allowing the Appellant a reasonable opportunity to provide a detailed written response, supported by the fullest documentary evidence available, before HMRC issue a final, fully reasoned decision. We therefore so order, and direct that HMRC shall provide a written indication of all their outstanding matters of concern to the Appellant within 56 days of the date of issue of this Decision, as the first step in that process.’

‘it is important that these, essentially regulatory functions of HMRC are conducted on the basis of the fullest available information both for the protection of the taxpayer and of HMRC. In my view, this leads to the principled conclusion that the Tribunal is able to require HMRC to carry out a review in the light of all the circumstances as they stand at the time the decision is carried out. This allows both the taxpayer and HMRC to make a decision, on review, which best reflects the statutory, regulatory, functions involved in any “ancillary decision”. In my judgment, the Tribunal is entitled not only to require a review to be carried out on the basis of material, or factors, not taken into account at the time of a decision (such as the original decision in the present case) even though the information could have been made available or ben discovered at the time, but it is also entitled to require a review to be carried out taking account of new material, or factors, which have only arisen on the intervening period.’

“22 A. All that conversation there was held with Phil Eagleton. 23 I may have been in the room, I may have popped out, I am 24 not 100 per cent -- let's say I was in the room, I may 25 have gone to my desk. In my room I have my desk and Page 175 1 I have a meeting area round about there, and they were 2 sat there. I may have gone to my desk for any reason. 3 Regardless, from Phil's perspective, because he does the 4 duty suspended due diligence, he was best placed to answer that.”

“4 Q… 5 "Mr Eagleton [that's you] replied 'It is someone 6 called David who works for both companies. They are 7 separate email addresses but they may be the same 8 person'. Mr Eagleton was unclear about the contact." 9 Well that's a comment. 10 "Mr Eagleton's contact with these companies is 11 always done by email. It's the same address for both 12 companies." 13 Now, why did you say to HMRC that the person you 14 deal with is called David when you know that that isn't 15 his name? 16 A. I was referring to my email contacts. 17 Q. Your email contacts were with a person who was calling 18 himself David but his true name was Hardeep Chatha? 19 A. And I was referring to my email contact. 20 Q. But the person who is the contact is not just six 21 letters, the contact is the person and the person was 22 Hardeep Chatha? 23 A. Yes, but I was referring to my email contact. 24 Q. And then you said -- 25 A. If it was -- I mean, I'm not trying to evade anything. Page 171 1 HMRC could have asked another question. They didn't. 2 Q. I see, so they are the ones who are supposed to work out 3 that David was in fact Hardeep Chatha, was it? Is that 4 what you're trying to say? 5 A. That's not what I'm saying. I am saying if they weren't 6 happy with the answer, then if they wanted further 7 clarification, then absolutely, it is appropriate to ask 8 another question, isn't it? 9 Q. How were they to know that it was appropriate for 10 another question, because you just said that my contact 11 is David? 12 A. There's been a few Davids, two to my recollection, at 13 Global and Bridgewell. 14 Q. Yes but the one who was your contact was not anyone 15 other than Hardeep Chatha who was calling himself David. 16 I thought we'd established that. 17 A. Yes. 18 Q. Yes. So therefore we can put out of our mind anybody 19 else called David because there was only one person 20 pretending to call themselves David who was in contact 21 with you? 22 A. Right. 23 Q. So when you actually answered in this way, I will ask 24 you again, why didn't you come out straight and say to 25 HMRC that "My contact is with Hardeep Chatha; in his Page 172 1 emails he uses the name David for confidentiality 2 purposes", or something of that kind? 3 A. That was just the answer I gave. I don't feel I am 4 being evasive in any way. If they wanted further 5 clarification, I am referring to my email contact.”

“25 Q. When you were being asked about the connection, what Page 61 1 sort of connection did you understand Officer Warburton 2 was talking to you, asking you about? 3 A. Common directorships. 4 Q. So far as you can recollect, were you at this meeting 5 asked about beneficial ownership in terms? 6 A. I think so, yes, I'm not 100 per cent certain. There 7 was -- 8 Q. And did you understand what the significance was in 9 terms of the difference between directorships and 10 beneficial ownership? 11 A. No.”

“8 Q. Again that's why I suggest to you what you were doing 9 was giving a deliberately misleading answer. You were 10 trying to fudge something, weren't you, because 11 otherwise you could see yourself heading for some 12 embarrassment? 13 A. Embarrassment in what way? I wanted to make sure that 14 the third party arm's-length connections was fully 15 explained so it would not cause my brother any problems.”

“25 A. That's right. We were talking generally about the Isle Page 34 1 of Man and how my brother went there. 2 Q. And then it went on to say this: 3 "[You] stated that GBDL and BL approached your 4 brother." 5 That can't be true, can it? 6 A. No, it can't be true.”

“5 A. I want to make sure that it was on an arm's-length basis 6 and that was the understanding that they took, just in 7 case it may have harmed my brother's direct tax 8 investigation.”

“13. They are at arm's length. 14 EFB has to make a profit doing its duties. Even with 15 our own shops, our shops don't get any preferential 16 treatment compared to any independent shop. Each arm of 17 our business has to stand or fall on its own two feet. ”

“19 Q. And you responded you were aware of supply chain fraud 20 in the alcohol trade duty suspended – 21 A. Yes. 22 Q. -- but you wouldn't be given the information about your 23 customer's customer due to commercial sensitivity. 24 A. Yes.”

“1 In the preceding paragraph you're being asked 2 specifically about Global and Bridgewell, and what you 3 were conveying to the officers, I suggest, was that your 4 two customers, Global and Bridgewell, would not be 5 giving information to your company – 6 A. That's right. 7 Q. -- about their customers because of commercial 8 sensitivity. 9 A. That's right. So their customers -- it all goes back to 10 keeping them at arm's length. So their customers, they 11 held their information.” 12 Q. So Global and Bridgewell you say held their information, 13 they would regard that as confidential? 14 A. Yes, so they wouldn't make it available to EFBL. 15 Q. For due diligence purposes? 16 A. For due diligence purposes. 17 Q. They wouldn't? 18 A. They wouldn't. But when I went over there I could look 19 at it, and I looked at it and at that point it seemed to 20 be okay, it covered the basics.” 21 Q. But you are EFBL, you are the director of EFBL and here 22 you are saying two things which are completely 23 contradictory, I suggest. 24 A. No, I don't think they are contradictory. The companies 25 themselves, I am not the company, I am a director of the Page 50 1 company. You're right.”

“ 4 Q. And what you were doing was talking about something that 5 actually never happened, but what you were doing was 6 giving them an impression that there was such a credit 7 check which would be consistent with two companies 8 dealing at arm's length with each other? 9 A. Yes, I understand. So I wanted to make the point that 10 they were at arm's length purely because I know that 11 there was direct tax investigations on my brother, so if 12 I reinforced that then I thought it would be beneficial 13 for him .”

“2 Q. And the impression you were giving was that you knew 3 little about them other than they had approached your 4 brother? 5 A. I want to make sure that it was on an arm's-length basis 6 and that was the understanding that they took, just in 7 case it may have harmed my brother's direct tax 8 investigation .”

‘ Is my understanding correct in that there is no connection, beneficial or otherwise between Global Beverage Distribution Ltd, Bridgewell Ltd and EFB(IOM) Ltd with European Food Brokers Ltd, Whittalls Wines Ltd or Mr Rajinder Chatha? If not, please set out the correct position for me . I understand that EFB (IOM) Ltd is a wholly owned subsidiary of Chatha International Ltd. Please would you please confirm whether there is any connection beneficial or otherwise between Global Beverage Distribution Ltd, Bridgewell Ltd and Chatha International Ltd .’

‘ Please explain in detail how Global Beverage Distribution Ltd and Bridgewell Ltd approached Mr Rajinder Chatha, who made the decisions to trade and why the decision was made to deal with these companies. ’

‘ Tracey, please see the below in response to the above named letter faxed to Tinder Chatha earlier this week by Mrs P. Nicholas’

‘ As far as I am aware there is no connection between Global Beverage Distribution Ltd, Bridgewell Ltd and EFB (IOM) Ltd to Whittalls Wines Ltd and European Food Brokers Ltd. I am also unaware as to whether there is any connection beneficial or otherwise between Mr Rajinder Chatha and the above named companies, but I will ask the question .’

“22 Q. But there is a connection, isn't there? What needed to 23 be said is "But actually they are owned by this one and 24 the same man, Mr Rajinder Chatha". 25 A. Yes, it should have been.”

“1 A. This would have been beneficial to put in. It says 2 that, you know, they did get an answer, rather than the 3 HMRC saying they didn't get an answer until February 4 '16.”

“15 Go to the first one, which is 29 September 2014 at 16 17.51. This is sent to office@global, office@gbd, yes? 17 A. Yes, that's right. 18 Q. And it's addressed to David. 19 A. Yes. 20 Q. Whom you know is in fact Hardeep? 21 A. Yes. 22 Q. Hardeep Chatha who is the nephew of Rajinder Chatha? 23 A. Yes. 24 Q. "David, as a result of a recent meeting with HMRC 25 I wonder if you would respond as to whether there is any Page 168 1 connection, beneficial or otherwise, between your 2 company and a Mr Rajinder Chatha." 3 Now, what you were saying is this. The impression 4 that you're trying to give in this is as if you don't 5 know who Mr Rajinder Chatha is? 6 A. No, it's not that at all, sir. 7 Q. Why do you say to "a Mr Rajinder Chatha"? 8 A. I am requesting -- I am quite clearly requesting 9 a clarification. 10 Q. Yes. Would you just focus on what I am asking about. 11 Why did you use the word "a" in front of 12 "Mr Rajinder Chatha"? You know him very well. You 13 worked for the man for 20 years. Why do you call him 14 "a Mr Rajinder Chatha"? Why not Raj? 15 A. Is that not what Officer Bourne had phrased to 16 ourselves? I am only trying to reflect what was asked 17 of us in the meeting. 18 Q. No, she didn't use the word "a Mr Rajinder Chatha". 19 What you are trying to do here is to create 20 an impression to anybody who looked at this from the 21 outside -- 22 A. No, that's not the case, sir, not at all. 23 Q. -- as if you knew nothing at all about the connection 24 between Global and Rajinder Chatha? 25 A. No, that's not the case. I think you're reading too Page 169 1 much into that. 2 Q. I see. But you knew what the answer was to the question 3 you were asked, didn't you? 4 A. Well, I think it's better to have clarification from the 5 company. 6 Q. But the way you ask it is "as to whether there is any 7 connection, beneficial or otherwise, between your 8 company and a Mr Rajinder Chatha." 9 A. And if I get clarification from the company to satisfy 10 HMRC, then that satisfies everybody, doesn't it, myself 11 included? There could be no other doubt. ”

‘ I have asked the question but not yet received a reply ’

‘What is most concerning is the statement that the companies have been involved in supply chains were large tax losses have occurred. We take from that statement that our companies are not directly involved but if any of our customers have an involvement would you please advise us who they are so that we may immediately cease any further business with them.’

“1 Q. "PE said if we did have a commercial relationship say 2 with Bridgewell's customers, then they [and that must be 3 Bridgewell] may be concerned that Whittalls would 4 approach Bridgewell's customers directly and cut out the 5 middleman so Whittalls do not check their customer's 6 customer." 7 A. I was speaking generally but using Bridgewell as 8 an example. 9 Q. As a specific example? 10 A. Yes. 11 Q. But you only had in fact two customers, didn't you, for 12 duty suspended goods? 13 A. Yes. 14 Q. Which were Bridgewell and Global? 15 A. Yes. 16 Q. So therefore the generality was the same as the specific 17 because you only had those two customers to think about? 18 A. Yes. 19 Q. Yes. And the picture that you were giving there was 20 this, wasn't it, that when you were referring to 21 Bridgewell, that Bridgewell would be very upset -- they 22 would be reluctant to disclose the identity of their own 23 customers because they would be fearful that they would 24 be cut out if that information ended up in the hands of 25 WWL or EFB? 1 A. I was using them as an example, we were speaking 2 generally. 3 Q. Yes. But so far as those two particular customers, your 4 only customers in duty suspended goods are concerned -- 5 A. Yes. 6 Q. -- it wasn't true, was it, because they weren't true 7 arm's-length customers. All you had to do was ask 8 Hardeep, "Let me see your files on your customers for 9 the particular transaction where we are now about to 10 transport the goods to France". You would only have to 11 ask because they were associated companies? 12 A. And to that end Jatinder Chatha goes out to the Isle of 13 Man and sees their due diligence and their customers. 14 Q. Let's just try and focus on the question and what you 15 said, not what Mr Jatinder Chatha was saying. You were 16 giving the clear impression, were you not, in that 17 conversation that the relationship between WWL and EFBL 18 in England was completely separate from the two Isle of 19 Man companies, to such an extent that they would be 20 upset if you were to learn of the identity of their 21 customers, because they would fear that you would cut 22 them out as the middleman? 23 A. All I am trying to do during that conversation is set 24 out the principle of somebody looking at somebody else's 25 customers' details -- Page 34 1 Q. But it was that general principle -- 2 A. -- so that both myself and Officer Maskew understand the 3 same thing, the principle of what we're talking about. 4 That's all I'm doing. 5 Q. That general principle that you are talking about had no 6 application whatsoever, did it, to the particular 7 situation in which WWL and EFB were? None at all, did 8 it? 9 A. I'm not sure -- I think I've already answered it, 10 haven't I? 11 Q. No, you haven't. There was no prospect whatever that 12 Bridgewell would have any fears at all if it disclosed 13 information about its customers to you? 14 A. Not specifically those companies, no. 15 Q. No. So what was the point of making a general point 16 which had no application whatever to your own company's 17 situation? 18 A. So that both Officer Maskew and ourselves were 19 discussing how we viewed the due diligence, and that's 20 all. There's nothing sinister about it -- 21 Q. Well I suggest -- 22 A. -- and it shouldn't be implied from that.”

‘ I refer to my letter of 11 September 2014 and the letter from Mrs Nicholas of 24 th September 2014 in which you were asked: “Please explain in detail how Global Beverage Distribution Ltd and Bridgewell Ltd approached Mr Rajinder Chatha, who made the decision to trade and why the decision was made to trade with these companies.” This information has not been provided .’

‘I refer to my letter of 11 September 2014 and the letter from Mrs Nicholas dated 24 th September 2014 in which you were asked: “ Is my understanding correct in that there is no connection, beneficial or otherwise between Global Beverage Distribution Ltd, Bridgewell Ltd and EFB(IOM) Ltd with European Food Brokers Ltd, Whittalls Wines Ltd or Mr Rajinder Chatha? If not, please set out the correct position for me. I understand that EFB (IOM) Ltd is a wholly owned subsidiary of Chatha International Ltd. Please would you please confirm whether there is any connection beneficial or otherwise between Global Beverage Distribution Ltd, Bridgewell Ltd and Chatha International Ltd ” the deadline for response of 26 September 2014 to this was indicated in the letter from Mrs Nicholas dated 24 September 2014 and you have not provided this information.’

“16 Q. Now, why did you add in "other than a strict 17 arm's-length commercial trading relationship"? 18 A. As far as I see a strict arm's-length commercial trading 19 relationship, I was referring to transfer pricing. … 24 Q. Because one thing that we know from the evidence in the 25 course of this appeal is that this was far from a strict Page 104 1 arm's-length commercial trading relationship. Do you 2 agree? 3 A. Again, like I said with regard to transfer pricing, in 4 my knowledge .”

“You need to assess the risks for the business and that you can demonstrate you have addressed these risks, there is a close link between European Food Brokers & Whittalls… I told Phil Eagleton that ADD is very comprehensive and that there is a fair bit to do and that revocation can follow as a result of poor ADD…”

“that was based on the evidence that [the team] had at that time. But at that point in time I hadn't began all of the discussions with the stakeholders and the processes involved and how that works. This was a general overview from the team, because I had only been on the team for a month at that point.” “…that's the way the evidence was looking. I haven't written it well, but at that point we'd been out and done the first due diligence meeting, we already had the evidence of tax losses and the concerns. So that is where the evidence was pointing in regards to a decision. Of course it then went to further internal governance and we had to go through further layers to assure that was still the correct procedure.”

“ not written but by telephone ”

“19 Q. As I understand it, in the course of this meeting you 20 did not focus in any way anyone's attention upon your 21 personal involvement in what was taking place in terms 22 of checking on the customers of Global and Bridgewell? 23 A. Other than the reference that I had discussed it with 24 Global and Bridgewell, I haven't seen anything yet, no.”

“15 Q. "They would check their customer's due diligence and 16 discuss with the customer. Mr Maskew queried whether 17 there was a written record of this. PE replied not 18 written but by telephone. Commented that the customer 19 was long established." 20 Now, that answer from Mr Eagleton is again, is it 21 not, consistent with the suggested practice of there 22 being -- they did not have access to the records, they 23 simply were reliant upon what was being done by 24 Hardeep Chatha in the Isle of Man? 25 A. I don't accept that. I mean, Phil Eagleton said they Page 65 2 would check their customer's due diligence. That 2 suggests to me that they would do exactly that.”

“11 Was there any indication at 12 this November meeting what their specific concerns were 13 with the due diligence being carried out by the two 14 companies? 15 A. No.”

“PR: Queried whether there was any indication that there were tax losses within current supply chains. LP: Replied that there was no indication that it had stopped. PR: Stated that they had not despatched to Belogistiques since it had been closed.”

“We submit that we have conclusively established above that your allegations of ‘little or no’ enhanced due diligence, of the ‘real risk of tax loss’ with our clients’ customers and of the establishment of such tax loss ‘in previous transactions’ are entirely erroneous, misplaced, unreasonable and unfounded in any evidence with which we have been provided.”

“ suppliers (such as Heineken) in the UK were not aware that European Food Brokers Ltd were selling their stock into the wholesale market and Global and Bridgewell had been set up to attempt to mask from the likes of Heineken what European Food Brokers was doing. The commercial reasons for setting up these companies has never been hidden from IOM C&E. I know that HMRC and IOM C&E have an open dialogue with each other and this information would be provided to HMRC should they request it ”

“3 A. Suppliers were supplying goods to Global and Bridgewell. 4 We didn't want the Global and Bridgewell customers 5 necessarily to know where those goods had come from. So 6 my understanding was that that was the commercial 7 confidentiality that Mr Chatha was looking for.”

“5 MR NATHAN: Let me just clarify that. The purpose of the 6 arrangement was to keep hidden -- to mask from the 7 suppliers, distributors and producers, the fact that 8 goods being purchased by EFBL in England were intended 9 to be sold for export through these two interposed 10 companies, Bridgewell and Global? 11 A. That is my understanding, yes.”

“11 Isle of Man. If this were truly an arm's-length company 12 which was not associated at all with you, this would not 13 obviously comply with the alcohol due diligence 14 condition? 15 A. No, I agree. 16 Q. You agree. The reason why there isn't a problem, as 17 I understand it, is that your case is that here are 18 companies which are closely associated. 19 A. Yes. 20 Q. In effect the companies in the Isle of Man are doing 21 your business for you, aren't they? 22 A. No, they are still arm's length. 23 Q. They are doing your export -- 24 A. They are just strictly commercial.”

“1 A. Again if I can go back, every manufacturer has got sales 2 targets that they want to achieve. If you look at 3 a sales structure within a manufacturer's business they 4 will probably have four divisions within a company: one 5 will look after the supermarkets, one will look after 6 the wholesale, one will look after convenience, and the 7 other, the term they use nowadays is "route to market", 8 which means anything that falls outside of them three 9 categories. 10 Each one will have a sales director, and each sales 11 director will have a sales target and a bonus. So it's 12 a case of they are all desperate to sell stock and they 13 want to achieve their targets. So prior to 2007 when we 14 set these up, we had had a couple of instances where we 15 had sold stock to certain retailers or wholesalers and 16 they had used our invoices against us. So I'm going 17 back to the manufacturer saying: how can I buy this 18 stock cheaper from European Food Brokers than I can buy 19 from you? So basically the reason for setting these up 20 was to put that link in, so there was some commercial 21 confidentiality between us selling to the retailer and 22 it not being used against us .”

“14 Now, as far as when I say my suppliers, 15 we're talking about the manufacturer. As far as the 16 sales director or the salesman that was selling me the 17 stock, did they know what I was doing? I'd say majority 18 of them did. But did the whole group that they were 19 working for know? No, they didn't.” (Emphasis added)

“If aware of this, such suppliers would decline to trade with EFB”

“ 2 Q. Let's just read what you said: 3 "These manufacturers and authorised distributors 4 would be unhappy if EFB were supplying some of its stock 5 into non-UK markets as they, the manufacturers, have 6 their own distribution channels. If they were aware of 7 it, such suppliers would decline to trade with EFB." 8 That's very clear -- wait for the question. It's 9 very clear that if that information escaped to the 10 senior management of these companies, they would refuse 11 to supply you? 12 A. The action they would have taken would have been to 13 restrict the amount of volume that I got. 14 Q. I'm afraid you say the words -- 15 A. I understand. 16 Q. -- "would decline to trade with EFB". 17 A. They would restrict the volume. 18 Q. So now you are saying something slightly different, 19 aren't you? 20 A. Well -- 21 Q. You wave your hands, but no, it's different, isn't it? 22 A. Okay, it's different.”

“17 Q. So what you're saying is if they became aware, they 18 wouldn't close your accounts, they would reduce the 19 stock which would be made available to you so as to 20 confine it to UK business only? 21 A. If that's what the action they wanted to take, yes. 22 Q. Well, that's what you just told me is the action they 23 would take. 24 A. I'm not saying they would take it, they could take it ”

“ I haven't seen anything in anything that you've suggested to me to suggest that they didn't have access to the material .”

‘ Further, Whilst Global / Bridgewell did not provide to our clients copies of documents gathered during the due diligence process, our clients were (1) aware of the steps in Global / Bridgewell’s due diligence and (2) were allowed to inspect documents gathered as part of Global / Bridgewell’s due diligence. To the extent that our letter of 25 February 2016 suggests otherwise, this was an error on our part ’

“11. Set out below is a summary of the information you have given about the due diligence which you do on GBDL and BWL’s customers: a. On 8 July 2014 it was said that Mr Eagleton carried out due diligence on customers GBDL and BWL, and no mention was made of considering these businesses’ due diligence on their customers. b. On 9 September 2014 Mr Chatha stated that his brother, Mr Rajinder Chatha, completed credit checks on GDBL and BWL, had met with them in the IoM, and had visited their premises. c. After the disclosure of 15 June 2015 as to the shared beneficial ownership of the businesses, a meeting was arranged for 30 July at which WWL’s due diligence paperwork was uplifted. d. On 9 September 2015 your adviser stated that he had advised WWL and EFBL to check the level of due diligence for their customer to see if they were robust enough. When asked what onward checks would be done on customers, Mr Chatha said that these consisted of discussions with GDBL and BWL, and that the last visit to GDBL and BWL had been in November 2014. e. On 5 November 2015, Mr Eagleton said that WWL did not make due diligence checks on the new owners of goods in IEFW (i.e. GDBL and BWL’s customers) because that was the responsibility of GDBL and BWL. He said that WWL do ask GDBL and BWL what checks they have completed on their customers, but that the exchanges were verbal and not recorded. f. In the letter from your adviser dated 25 February 2016 (in response to the Commissioners’ indication that they were ‘minded to’ revoke EFBL and WWL’s WOWGR approvals), it was stated (at paragraph 37) that “ as distinct commercial entities, our clients’ customers [Global and Bridgewell] do not provide our clients with access to their respective due diligence records but have instead confirmed to our clients that…they are satisfied with the onward supply… ”. g. However, your adviser in his letter dated 2 April 2016 stated that you agreed that GBDL and BWL’s due diligence was important, and stated that “Because of the common ownership and because of their knowledge of the experience and professionalism of the personnel working at Global/Bridgewell, our clients had confidence in the due diligence checks being conducted by Global/Bridgewell. Further, whilst Global/Bridgewell did not provide to our clients copies of documents gathered during the due diligence process, our clients were (1) aware of the steps in Global/Bridgewell’s due diligence and (2) were allowed to inspect documents gathered as part of Global/Bridgewell’s due diligence. To the extent that our letter of 25th February 2016 suggests otherwise, this was an error on our part” . h. On 4 April 2016, for the first time, some due diligence material was provided which you stated you had been given by GBDL and BWL, relating to previous years. There was no indication when it had been provided. i. Most recently, and following the Commissioners’ further indication of an intention to revoke, dated 10 May 2016) Jatinder Chatha provided a witness statement (dated 12 May 2016) in which he listed dates of visits to GBDL and BWL (6 visits between October 2012 and September 2014) at which he states he examined due diligence documents by “randomly picking out documents to see what had been done and what had been recorded as being done”

“the contractual arrangements are governed by the terms and conditions that are on the supplier invoices (for example when we buy champagne from Moet Hennessy these contractual terms are set out in the invoice issued to us by Moet. There is no separate document headed ‘contract’. When we supply goods we include our terms and conditions on our invoices).”

“ Keeping notes of such intra-family discussions is something that really didn’t occur to me ”

“[108] … His witness statement contains at least one untruth and his replies to Mrs. Mee in his interview with her were in part either untruthful or deceptive.” “[114]… There is an abundance of totally unequivocal evidence that Mr. Todd was aware by early 2005 of the existence of fraudulent defaulters in 19each of his supply chains in 09/04 and 10/04. Despite this, Mr. Todd in his witness statement, evidence in chief and cross examination maintained he had never known of the existence of defaulting traders in these chains. This evidence was quite simply untrue.” “[115] Similarly his evidence, both written and oral, was untrue in relation to third-party payments.” “[120]… Throughout these deals, Mr. Todd traded without any terms and conditions in place. His reason for this was quite absurd.” “[124]… The vagueness and inconsistency in Mr. Todd’s evidence is just not credible…”

“3 Q. "In his statement Officer Maskew refers to visiting our 4 warehouses on three occasions. In relation to his visit 5 on 1 May 2015, Officer Maskew refers to his discussions 6 with me in respect of our ADD. Given the common 7 ownership of EFBL, Global Beverage Distribution and 8 Bridgewell, which Officer Maskew refers to as the Chatha 9 group of companies, I do not see it as unreasonable that 10 the due diligence carried out between these co-owned 11 companies is less extensive than that carried out 12 between unrelated companies." 13 Do you see? 14 A. Yes. 15 Q. The point I was just making to you before – 16 A. Yes . 17 Q. -- that clearly it would not be satisfactory due 18 diligence if these had not been related companies? 19 A. If they were genuinely third party companies, yes. ”

“3 A. But that arrangement must have satisfied the VAT 4 registration, because I see the VAT certificate is 6 addressed to this office.”

“8 Q. And did you understand what the significance was in 9 terms of the difference between directorships and 10 beneficial ownership? 11 A. No. ”

“11 Was there any indication at 12 this November meeting what their specific concerns were 13 with the due diligence being carried out by the two 14 companies? 15 A. No.”

“ [Robert Maskew] states that there was no legitimate market for what you supply to in Europe. 85% of the duty suspended beer that goes out from your Birmingham site is destined for this market yet there does not appear to be a market for the amount of beers that your warehouse send there” . “ [Robert Maskew]… Transport is a key area of ADD and I suggested that you have a ‘relaxed attitude’ to this and gave the following reasons…you do not do any checks on these hauliers, particularly the sub-contracted hauliers” . “ [Robert Maskew] advised that he had not seen a documented risk assessment in the ADD provide[d] by the business…[Craig Lewis] asked if there was a documented procedure” . “ [Robert Maskew] advised that he had looked at the ADD provided and that there was no audit trail.” “ [Robert Maskew] asked if WWL had supplied ADD for all the tax warehouses that WWL use”

“I didn’t see anything wrong with that. That didn’t arise (sic) any suspicion to me”

“4 Q. And how was it determined which files of customers you 5 would review? 6 A. They're on a shelf in Hardeep Chatha's office and 7 I simply picked them at random. ”

“1 Q. How physically was that done; would you take a file down 2 to the office -- 3 A. I would take a paper file across -- 4 Q. -- or Brown Craine -- 5 A. Brown, Craine & Co, yes. 6 Q. You take it down to them? 7 A. I take a paper folder down, yes. 8 JUDGE RUPERT JONES: Sorry, I didn't catch that at all. 9 MR NATHAN: You need to speak up. I am always accused of 10 having a soft voice but you are far lower than I. 11 A. Mr Nathan asked how the due diligence was checked by the 12 directors, and I would go across to Burleigh Manor with 13 a folder, a customer due diligence folder, for them to 14 check. 15 JUDGE RUPERT JONES: Which office were you -- sorry, what 16 was the name of the building you were in when you would 17 go across? 18 A. EFB (Isle of Man), European House. 19 JUDGE RUPERT JONES: Thank you. 20 MR NATHAN: And you would take it down to the office of -- 20 A. Burleigh Manor, yes, it's just over the road. ”

“18… let's say in January or February 2015 19 I was obtaining, I don't know, an email or 20 correspondence saying that they weren't prepared to 21 provide a list of who their customers were, I may have 23 had that information on my file but not have 23 incorporated that into my checklist. So because the 24 checklist, as you're saying, may have evolved three to 25 four months afterwards, the questions within the 1 checklist, I may have had -- well, I would have had the 2 information as part of the file, but as I was requesting 3 information the checklist may have evolved, yes. ”

“2 A. As I mentioned previously, Mr Nathan, the date this 3 later came through was 6 November 2014; okay? I read 4 all the questions and understood from what I could see, 5 what was being requested in terms of copy purchase and 6 sales listings, copy purchase invoices, copy sales 7 invoices and the due diligence that was held on file at 8 the time . ”

“9 Now, given the amount of information that was being 10 requested and given the fact it took two months to get 11 all the information together, it was quite a lengthy 12 exercise, and the first port of call for me was, okay, 13 what's the first thing I get my hands on? Due 14 diligence , bang, put it in the box. ”

“Global Beverage Distribution Ltd, Bridgewell Ltd and EFB IOM Ltd are requested to provide evidence of the following...26. Please provide details of the due diligence undertaken by Global Beverage Distribution Ltd and Bridgewell Ltd in respect of the following companies...”

“4 Premier Inc started trading with Bridgewell in December 5 or January 2015, and there was a completely separate 6 file for Premier Incorporated which would contain all 7 the ADD documents. ”

“1 As I was looking through the due diligence file for 2 Premier Incorporated, I realised that I didn't have 3 a current VIES Europa validation check on file. So that 4 was done at that time and added to the file for the sake 5 of completeness; okay? ”

“Bridgewell and Global compiled the information requested and, in February 2015 David Craine and I met with IoM Customs and hand delivered copies of all of the documentation they had requested and answers to their questions within the letter. For my own part, I regarded the meeting as an important opportunity to give IoM Customs/HMRC all the information they required and address any residual queries they might have.”

“5 Q. So what you're saying is that what we see being handed 6 over by you to Mr Rimmer is not the up-to-date file for 7 the due diligence of April? 8 A. It's not the complete file, no. 9 Q. Not the complete file? 10 A. Not the complete file, no. 11 Q. Why didn't you hand in the complete file? That doesn't 12 make any sense. 13 A. Because the examples that were given for the due 14 diligence on Tara was, as well as the identification 15 documents, copy examples of questions that would have 16 been asked of Tara with regard to their due diligence. 17 Q. Sorry, copies of the questions that would be asked of 18 Tara? 19 A. Yes. 20 Q. Yes. I don't understand, why didn't you hand him the 21 whole of the file? He clearly understood that he had 22 got the whole of the file and so did Mr Craine. 23 A. When I was asked to give examples of the due diligence 24 that we carried out on Tara, that's when I gave the 25 examples as well as the identification documents, copies Page 68 1 of correspondence that was going between myself and 2 Tara, certain questions. 3 Q. If you were being asked to give an example of the due 4 diligence which you were doing and you gave as 5 an example Tara, I still do not understand why you chose 6 not to give the complete file. It doesn't make any 7 sense. 8 A. Well, I must have misunderstood what was being asked of 9 me. They said, "Can you give examples of what due 10 diligence you were doing on Tara". As well as my 11 identification documents were examples of questions that 12 were being asked of Tara and responses, if I – 13 Q. I suggest you're making all this up. It is very easy. 14 You answered the question. I suggest you've just made 15 up all of this evidence because you know there's a big 16 problem coming your way, don't you? 17 A. I disagree. ”

“20 Q. Why would anybody collate information which effectively 21 wasn't the information which was relevant as of the date 22 when you were delivered it? 23 A. It was relevant at the date it was asked for. 23 Q. But that's -- but that makes no sense – 24 A. It may not but it's a fact .” “9 Q. You were the director who was involved in the company. 10 You didn't write a letter subsequently saying "Oh, by 11 the way, I ought to tell you that the answer to 12 question 15 which in the material we've given you 13 actually is completely out of date"? 14 A. I didn't think it relevant. ” “21 A. I can say no more. It is as it is .”

“9 Q. Did the checklist get longer, shorter, ask for more 10 information, what? 11 A. I think it doubled in size, yes. I think it became 12 a four-page document from a two-page document .”

“11 MR NATHAN: Certainly. What I am suggesting to you, 12 Mr Craine, is here is the due diligence in relation to 13 this company, Premier Inc, which you produced in 14 April 2016 at a time when the company had only just 15 stopped trading only a matter of few months before, and 16 the only form that we see there is a two-page one, and 17 what I am suggesting to you is that was a form which was 18 used by Global all the way through until somewhere 19 towards the end of 2015. 20 A. I can only agree. 21 Q. You agree? 22 A. Yes. ”

“17 A. May I just say, it also goes on to read: 18 "For the relevant three customers which feature 19 within the HMRC analysis ..." 20 That HMRC analysis, what was that analysis -- what 21 was that relating to and within what period?” “5 A. Sir, may I just say this HMRC analysis, if I think it is 6 what it is, related to, I think it was purported tax 7 loss supply chains. And I don't know if it's in one of 8 my witness statements or Mr Craine's, but I'm pretty 9 sure this due diligence that we exhibit was the due 10 diligence held on those customers for the period where 11 the purported tax losses were occurring. ”

“3...But, again, there's no 4 hint in what you say in paragraph 6 of your witness 5 statement, just go back for a moment, you say there 6 that -- go to paragraph 6 -- by the time we come to the 7 end of 2015, let us say, in relation to this customer 8 which was a continuing customer of the company, and look 9 at the middle -- go down about six or eight lines to the 10 sentence in the middle of the page, "I am aware and was 11 aware ..." 12 A. Yes. 13 Q. "I am aware and was aware at the time that it was being 14 conducted of the due diligence that Global/Bridgewell 15 undertook in respect of its trading partners in 2011, 16 2012, 2013 and 2014." 17 Now, the practice would therefore have been to 18 continue, wouldn't it, to do due diligence which would 19 take into account whatever was required to be done, 20 because that's what you and your colleague were 21 overviewing? 22 A. That's what we would expect, yes. 23 Q. Yes. But you would have expected to find that the due 24 diligence that was being presented by you on behalf of 24 the company , admittedly at a time when you had ceased to Page 117 1 be a director, you would expect to find that that would 2 have been the up-to-date due diligence as at the time at 3 least when it ceased trading with Global because that 4 was only a matter of months before you gave your witness 5 statement? 6 A. I would have expected that. 7 Q. Yes. And if it hadn't been, one would have expected you 8 to have qualified that and given some explanation to the 9 High Court? 10 A. Not necessarily. I've exhibited what we had . As you 11 said, I was no longer a director at that stage. ”

“9Q....Look back at paragraph 6, halfway down: 10 "I am aware of the due diligence that 11 Global/Bridgewell undertook in respect of trading 12 partners in 2011, 2012, 2013 and 2014. I understand 13 that HMRC has raised issue with three of Global's 14 customers." 15 And they are customers from 2011, 2012, 2013 and 16 2014, Premier, CECL and Euromotion. 17 "I exhibit hereto marked 'DC1' a copy of the due 18 diligence that was conducted upon each of these three 19 customers." 20 What was your understanding of what DC1 was? 21 A. They would be the due diligence files at that time up 22 until 2014.”

“20 A. I do recall that at the time when this letter was being 21 drafted, the discussion involved providing the due 22 diligence as it stood at the time of the relevant tax 23 loss supply chain examples ”

“7 A. I think I've now answered the same question three times. ... 24 A. I'm sorry, I don't understand that question. It was 25 about three minutes long. ”

“ Transport · establish where the goods will be sourced from. Is this the country of production? If not why are the goods being routed in this way? · who is responsible for the transport? Is the cost of the goods inclusive of transport? If so, does this mean that the potential logistical costs make the unit price unrealistic? · details of delivery vehicles should be retained and if necessary any variations to expected transport arrangements recorded.”

“1. Do you sub-contract out movements of duty suspended alcohol that you undertake on our behalf? Yes- Hellmann do not run their own vehicles. Our entire operation is based on 3 rd party sub-contractors. All sub contractors are pre-approved, for the alcohol business we stick with carriers we have known for many years. ... 4. What sort of due diligence do you carry out on the hauliers to whom you sub-contract out such work? All hauliers are checked and approved at company level before they can commence working with Hellmann. Checks include insurance and O licence checks ... 7. Knowing what you do about the haulage industry and HMRC’s concerns generally in relation to the movement of duty suspended alcohol, can you think of any changes, from the haulage industry perspective, that we could implement to assist in guarding against alcohol duty fraud? This is a subject we take very seriously...if you have any suggestions from your end please let me know so we can include this in our meetings.”

“8 Q. What did you at the relevant time understand to be the 9 authoritativeness of the information on SEED? 10 A. I thought it was exactly the same as HMRC would have 11 told me or told any other customer asking about my 12 companies. It was bulletproof.”

“11... we deal with bonded warehouses 12 that are accredited through the SEED system. They are 13 compliant warehouses, they are fit and proper therefore. 14 We draw great comfort from that.” “14 Q. Yes. So it is simply the fact that they are bonded 15 warehouses is good enough for you? 16 A. Yes, we do draw, yes, very great comfort from that. ”

“1 Q. When these documents were obtained did you actually read 2 them, look at them, or did you just put them in a file? 3 A. No, I had a look at them. They don't tell me a great 4 deal. I don't read accounts I have to say. 5 Q. You don't read accounts and I dare say you don't read 6 French either. 7 A. Yes, correct. 8 Q. You don't. So these were basically documents which are 9 meaningless to you? 10 A. Well, to me as a layman looking at these, yes, you're 11 absolutely right. ”

“I think it was for an amicable visit and to talk about the work as well”

“ 10.1… you must: · objectively assess the risks of alcohol duty fraud within the supply chains in which you operate … · document the checks you intend to carry out 10.2 … To assess your exposure to this risk you will need to objectively assess if there is potential for duty evasion resulting from your trading activity. You will need to know who you are selling to and where the goods are destined for and understand the market for these products. … To assess your exposure to this risk you will need to objectively consider whether the supply chain and trading activity is credible which includes knowing who you source goods from and provide a service to. ”

“LP confirmed that fraud identified in movement of goods which originated at EFB and Whittalls Wines have been used in fraudulent movements in the EU. LP clarified that it is the Belgium warehouse where fraud traced from and not directly back to WWL and EFB as far as HMRC are aware.”

“Taken together, the Commissioners consider these examples provide powerful evidence that the due diligence processes you have put in place are not robust enough to ensure you are notified when irregularities occur in the movements of goods, and call into question the standard of due diligence that you (and in EFBL’s case, your internal group customers GBDL and BWL) carry out on the hauliers transporting your goods and the EU warehouses receiving them.”

“Each of the completed files additionally contain an e-mail from the customer stating that he has received all goods despatched to their account in respect of the files in question. Each file additionally contains a landing document from the warehouse of receipt which demonstrates that all goods despatched from Whittalls Wines Ltd were received at the intended warehouse of receipt. Given the above, I am not in a position to be able to explain why these loads subsequently weighed either light or empty when passing through the Channel Tunnel when clearly this could not be the case.”

“19 Q. No, not lost on you. And also when he was using the 20 pseudonym David -- 21 A. Yes. 22 Q. -- you knew perfectly well that it wasn't David, it was 23 Hardeep? 24 A. Absolutely correct. 25 Q. But it was necessary to keep up that pretence to the Page 163 1 outside world in case the secret leaked out? 2 A. It was -- it's for email purposes as much as anything 3 else. 4 Q. Yes. 5 A. If you have to communicate and one goes astray, at least 6 the confidentiality is there. 7 Q. Very often people by mistake send out an email in 8 a string of emails which has got information -- 9 A. Absolutely. 10 Q. Exactly. And you don't know, just so -- it was a device 11 to hide away who he was? 12 A. To continue the commercial confidentiality, yes, that's 13 right. 14 Q. Otherwise if you picked up the phone and talked to him 15 you'd say "Hello Dippa"? 16 A. Yes, I mean he never rang me and said "Hello Phil, it's 17 David", that would be ridiculous.”

“Further, as stated above, this matter was then fully investigated by our clients and it was established and notified to HMRC that:- (a) An e-mail, a hard copy of which was held in the movement file, had been received from the customer in each of the four movements concerned confirming receipt of all goods despatched into its account; (b) In each case, the customer paid for the relevant goods, as presumably you would accept it would have done had it not received all or any of the relevant stock …”

“As an experienced HMRC Officer, you should be aware that as we have established above, there is highly likely to be an alternative, more straightforward and entirely legitimate explanation than excise diversion fraud for the ‘information’ upon which the Commissioners rely. We remind you that our clients’ third party haulage companies are highly reputable and have their own unblemished movement guarantees approved by HMRC.”

“Such tenuity – goods, having duly arrived at the EU warehouse, there being a “possibility” that at some point thereafter those goods were used in “suspicious” activity for which this company was neither responsible nor complicit – is not a proper basis for making such an important decision: a decision that threatens the employment of over 800 British employees. It is not even a proper factor for such a decision.”

“ 73. The Commissioners have investigated the reliability of the cross-Channel operator data and are satisfied that the cross-Channel operators have a robust procedure in place and that their information can be relied upon. The reasons that the Commissioners regard the former evidence as more reliable than the latter on this topic are: (a) It has been demonstrated to the Commissioners’ satisfaction that the weighbridges were in good working order at the relevant time; (b) The weight of the vehicles and contents in question has been confirmed by the ferry operator; (c) In view of the concerns we have raised with you regarding 4 of the EU tax warehouses to which you have despatched goods, it is not unreasonable for the Commissioners to prefer the account of the ferry companies, which suggests that the vehicles in question did not travel with stock as stated , to that of the tax warehouses, which suggests that they did. 74. The information obtained on the transport of goods alongside the tax warehouses responses raises the concern that you do not have adequate control on the goods ones they leave WWL’s warehouse. The identification of empty loads and the absence of any convincing explanation for it gives the Commissioners concern that the load may have been unloaded prior to the vehicle leaving the UK, i.e. That the goods may have been diverted .” (Emphasis added)

“The Commissioners do not suggest that the Appellants were knowingly involved in diversion fraud. The reason for informing the Appellants of the discrepancies which HMRC had identified was to make them aware that these were happening and to alert the Appellants to the possibility that the goods being sold by EFBL, and subsequently transported from WWL warehouses by the customer, were being diverted during transit. The Appellants were notified in order that they could reconsider their due diligence processes and risk assessments. Instead, no adjustments were made to the due diligence procedures or outcomes and the Appellants maintained that their due diligence was robust enough.”

“Mr Lewis suggests that HMRC’s reasons for informing us of tax losses and other irregularities was “to alert [us] to the possibility that the goods being sold by EFBL and subsequently transported from WWL warehouses by EFBL’s customer were being used in suspicious apparently fraudulent activity in the EU.”

“24 Q. And then you ask: 25 "Have Whittalls ever queried the vehicles sent?" Page 54 1 And Ms Baker says yes: 2 "Truck swap, RDV are not allowed to do this." 3 And that's entirely consistent, isn't it, with 4 Whittalls taking its due diligence and transport 5 obligations seriously; correct? 7 A. Yes.”

“a. The Commissioners acknowledge that there are different kinds of swap, i.e. trailer and vehicle, and accept that there may be commercial reasons for a vehicle swap to occur. However, you yourself concede that there is little commercial reason for a trailer swap. The Commissioners have identified that both kinds of swap appear to have happened between 2011 and 2014. b. The Commissioners have also established that the haulier subcontracted to carry your goods considered such swaps to be normal. However, it appears that you were not aware of it until notified by the Commissioners…”

“37. That leads us to the trailer swaps on which the Commissioners rely. As we have demonstrated in our table, the Commissioners have mistaken a trailer swap for a tractor swap – a perfectly commonplace and legitimate activity which of itself involves no risk for the Revenue. 38. The mistake is as basic as could be. It serves to illustrate why HMRC would be better to hear this company out with an open mind rather than approach it with a concluded view which is then used as the basis on which to accept or reject the evidence.”

“…it is a matter for the destination bond’s own procedures as to whether it deems it necessary to record the change of seal. In any event our clients are very concerned that yet again, you have sought to infer the presence of excise diversion fraud from unproven circumstances which, if they have arisen at all, have, we submit, a far more straightforward and entirely legitimate explanation. A final point here which again you appear to have failed to have considered, ignored or dismissed out of hand: if the loads to which you refer have been intercepted by UKBA prior to their departure from the UK to the EU and seals have been identified which do not accord with EMCS records, why did UKBA apparently then fail to act upon these apparent discrepancies and properly examine the load to establish any evidence of potential diversion, for example light or empty loads? Or did UKBA in fact examine the loads but no such evidence of diversion was found, a fact that conveniently fail to mention here? We are very concerned that the only ‘fictitious information’ which arises in this case is that upon which you seek to rely in your threatened revocation of our clients’ various excise approvals.”

“EFB is aware (because I have told Jatinder Chatha and Phil Eagleton) of the approach I take to due diligence.”

“The approach of the Appellants throughout the time that they have held approvals, the Appellants have answered as fully, and as expeditiously as possible, all of the concerns raised by HMRC” (Jatinder Chatha’s witness statement at paragraph 82); and his letter of 31 May 2016 in which Jatinder Chatha refers to their relationship with HMRC as a “continuing partnership”

“Our intelligence resources are much more limited than those of HMRC. We rely on HMRC to point us to specific matters of concern so that we can respond or, if HMRC prefers, the specific response that HMRC would like us to follow”

“It seems to us that no amount of reasonable due diligence by our clients would have uncovered the future fraud”

“…the only risks in the way in which this company conducts its duty suspended business are the unavoidable risks which are inherent in the duty suspended regime – something Parliament has elected to allow. It would be quite wrong for the Commissioners to alight on these as if they were unique to this company”

“…it is undoubtedly the case that if HMRC were to identify which sale(s) of duty suspended alcohol sold by EFB to Global/Bridgewell were part of a tax loss supply chain, the Appellants would then become in a position to disprove it.”

“…it should be clear to you as an experienced Officer how and why disclosure of this nature is highly relevant to our clients’ position given the allegations which you make, which are currently wholly unsubstantiated by any evidence provided to us. For the avoidance of doubt, our clients intend to put you to strict proof on each and every allegations which you have made, including, but not limited to, requiring you to demonstrate how our clients are in any way responsible for any irregularities (if proved).”

“We submit that we have conclusively established above that your allegations of ‘little or no’ enhanced due diligence, of the ‘real risk of tax loss’ with our clients’ customers and of the establishment of such tax loss ‘in previous transactions’ are entirely erroneous, misplaced, unreasonable and unfounded in any evidence with which we have been provided.”

“PR: Queried whether there was any indication that there were tax losses within current supply chains. LP: Replied that there was no indication that it had stopped. PR: Stated that they had not despatched to Belogistiques since it had been closed.”

“16 Q. Yes. In the end there wasn't any instruction given to 17 Deloittes, was there? 18 A. We had a discussion internally and KPMG was doing an -- 19 something on Global and Bridgewell, and obviously in 20 terms of the whole context of things the Deloitte one 21 was fairly meaningless. 22 Q. Was meaningless? 23 A. Because of our close associations with Global and 24 Bridgewell, it was more -- 25 Q. Sorry – Page 29 1 A. It was felt to be of greater value to do a due diligence 2 on their procedures. 3 Q. On the procedures of -- 4 A. Global and Bridgewell. 5 Q. And not on your own procedures? 6 A. No.”

“1 You have given us your reason that you chose not to 2 go to Deloittes to get a report but instead went to 3 KPMG, because it was felt that the appropriate way 4 forward was to get a report on the due diligence being 5 carried out on the Isle of Man by the two companies. Is 6 that really the reason that you have chosen not to get 7 a report immediately from Deloittes? 8 A. Yes, it was. 9 Q. Would you look, please, at volume 3, tab H. If you go 10 to page 37, go to the bottom of the page: 11 "With regard to the proposed instruction of 12 Deloitte LLP to undertake a separate review, we became 13 aware that the individual at Deloittes who was being 14 tasked with the due diligence review was an acquaintance 15 of Ms Helen Barnard, HMRC's case solicitor." 16 A. That's right. 17 Q. "We subsequently took the view that ... (Reading to the 18 words)... because HMRC had accepted that it was this due 19 diligence that was more relevant." 20 Now, it's a somewhat different reason, isn't it? 21 A. I don't think there is anything different at all.”

“ [at the proposed meeting] Please make available the following documents”

“1 Q. I see. So what the independents need is access to 2 a supplier who can give them lower prices than simply 3 buying from a supplier offering duty-paid? Is that it? 4 A. No, what it is is every -- in the trade everything is 5 given by the volume, the pricing that you get is driven 6 by the volume that actually have. An independent wine 7 merchant will buy two cases of Puligny-Montrachet. 8 [the retail stores] can buy 100 cases of Puligny-Montrachet, so the 9 pricing that we get is completely different. 10 Q. And the ability to buy that, the small independent 11 hasn't got the kind of financing which EFB has got? 12 A. The small independent hasn't got the outlet to move 13 100 cases. 14 Q. Certainly. But [the retail stores] represent the 15 retail outlets to shift that kind of volume; yes? 16 A. We are buying the volume because of the outlets that we 19 actually have. ”

“ I read the last sentence of paragraph 243 as the Tribunal stating that because it had found that Mr Hobbs was not engaged in market abuse, the Authority had not made out its case that Mr Hobbs was not a fit and proper person. Unless the Authority had confined its case to the allegation of market abuse, this was a non-sequitur. That it did so would be inconsistent with the Tribunal's statement in the same paragraph that the Authority's case rested on a combination of Mr Hobbs’ alleged conduct and his lying about it. Lying, by definition [is] deliberate and if intended to mislead, may well of itself demonstrate that a person is not a fit and proper person to carry out a regulated activity, and whether or not it did so in this case was a matter for the Tribunal to address. Furthermore, even if I am wrong in my interpretation of paragraph 243, if the question whether Mr Hobbs’ lying rendered him unfit and not a proper person was live before the Tribunal, the Tribunal gave no reasons whatsoever for a finding that his lying, which the Tribunal had clearly found, did not affect his fitness and propriety ”

‘ those who play a key role in the operation of the business to the extent that they can be seen as one of its ‘guiding minds’

“In respect of each meeting I have included a summary of the discussions which took place, but have not listed every exchange”

“that was based on the evidence that [the team] had at that time. But at that point in time I hadn't began all of the discussions with the stakeholders and the processes involved and how that works. This was a general overview from the team, because I had only been on the team for a month at that point.” “…that's the way the evidence was looking. I haven't written it well, but at that point we'd been out and done the first due diligence meeting, we already had the evidence of tax losses and the concerns. So that is where the evidence was pointing in regards to a decision. Of course it then went to further internal governance and we had to go through further layers to assure that was still the correct procedure.”

“6 Q. You've had essentially what is the warning letter. 7 They've now come back to you with more material on the 8 matters that you were warning them about. Why do you 9 reject it if in fact it is dealing with the very things 10 that you say previously there had been a shortfall of 11 information? They are damned if they do and they are 12 damned if they don't, aren't they, Mr Lewis? 13 A. No. The information that came back immediately after 14 the "minded to" wasn't -- it was considered, but it 15 wasn't the response that I think HMRC were expecting in 16 regards to it was very combative and there was a lot of 17 denial, asking HMRC to prove all of their findings. 18 Well, at that point we were hoping to change behaviour. 19 Because it's not the outcome we want, to revoke 20 approvals and shut businesses down. The ideal outcome 21 would be to turn a business into being a compliant 22 business. So if the reply had been more constructive 23 and more open, then we obviously would have considered 24 it in a different way, but it came back asking us to 25 prove all of that. And when we're talking about fit and Page 161 1 proper, we need to have trust in each other, and 2 obviously HMRC have to have trust in the trader, and the 3 replies that we got back didn't heighten that trust.”

“ In more serious cases such as a failure to consider the risks, undertake due diligence checks or respond to clear indications of fraud, we will apply appropriate and proportionate sanctions. For serious non compliance, such as ignoring warnings or knowingly entering into high risk transactions, we may revoke excise approvals and licences.”

“ the question depends on an exacting analysis of the factual case advanced in defence of the measure, in order to determine (i) whether its objective is sufficiently important to justify the limitation of a fundamental right; (ii) whether it is rationally connected to the objective; (iii) whether a less intrusive measure could have been used; and (iv) whether, having regard to these matters and to the severity of the consequences, a fair balance has been struck between the rights of the individual and the interests of the community.”

“It should be possible for excise goods, prior to their release for consumption, to move within the Community under suspension of excise duty. Such movement should be allowed from a tax warehouse to various destinations, in particular another tax warehouse but also to places equivalent for the purposes of this Directive.”

“ It is also necessary to lay down requirements to be complied with by authorised warehousekeepers and traders without authorised warehousekeeper status.”

“ (1) The Commissioners may by regulations under this section (referred to in this Act as ‘warehousing regulations’)— (a) prohibit the deposit or keeping of goods in a warehouse except where the occupier of the warehouse has been approved by the Commissioners in accordance with the regulations and where such conditions as may be prescribed in relation to that occupier are satisfied;”

“(1) For the purpose of administering, collecting or protecting the revenues derived from duties of excise, the Commissioners may by regulations under this section (in this Act referred to as “registered excise dealers and shippers regulations” )— (a) confer or impose such powers, duties, privileges and liabilities as may be prescribed in the regulations upon any person who is or has been a registered excise dealer and shipper; and (b) impose on persons other than registered excise dealers and shippers, or in respect of any goods of a class or description specified in the regulations, such requirements or restrictions as may by or under the regulations be prescribed with respect to registered excise dealers and shippers or any activities carried on by them.”

“[37] Consequently, it must be held that a trader such as Metro cannot be considered to be a ‘person who is responsible for the intra-Community movement’ within the meaning of Article 1 of Regulation No 3649/92, and does not have to check whether the conditions are met that would require the person responsible to draw up the simplified accompanying document and to give it to the trader so that the trader can keep it.”

“ I think there was Officer Barnbrook and Officer Smith, who’d left the team, but were the people there at the start with responsibility ...”

“ The main objective for Cracker 11 has been to remove the warehouse operators’ approvals from WWL, failing this, the secondary objective would be to impose conditions on the operations of the warehouses... ”

“ As you are already aware the overall final outcome for Op Cracker is to revoke all of the approvals and licences etc. This will also apply to Global, Bridgewell and EFB (IOM) in the Isle of Man. In the event that we are successful and gain the necessary approval to revoke, do you know who would be responsible for revoking the approvals in the Isle of Man? ..... I appreciate your input with this because we are just trying to get ahead of the game to ensure that we are coordinated and that all of the approvals are revoked at the same time .” 1 Dec 2015 Operation Cracker team meeting held, attended by inter alia Officer Lewis. The minute records that the purpose of the meeting: “... following extensive investigation over a number of years in the principles (sic) at the centre of the CRACKER operation, FIS propose to meeting attendees [ie incl Officer Lewis] that a ‘minded to’ letter should be issued as the businesses/individuals are not ‘fit and proper .”

“I advised Mr Chatha that the issue arose two or three companies removed from European Food Brokers Ltd. I asked Mr Chatha if he looked at his customers’ customer. Mr Chatha advised he was aware of supply chain fraud in the alcohol trade sector but he said that wouldn’t be given this information due to ‘commercial sensitivity’. [Bourne para 93: 7/A/18] [74/10/3] Public Notice 726 was referred to Jatinder Chatha again and he was advised that it could be the basis for duty suspended customer checks [74/10/3-4]. Officer Warburton pointed out to Jatinder Chatha that he would know the identity of some customers from movements to tax warehouses and that asking about the extent of due diligence undertaken by their customers would help to ensure EFBL is not supplying into tax loss chains [74/10/3]. Officer Bourne asked if Jatinder Chatha believed there was a market for UK goods in the EU, and advised that visit reports (to warehouses) with supporting photographs of premises and risks assessed would add more weight to their due diligence [74/10/4]. 9 Sept 2014 Letter [75/19]. Travel documents were sought from the Appellants including travel tickets, receipts etc. 11 Sept 2014 Letter [75/20] (which the Appellants say they did not receive). Due diligence including credit checks, visit reports, risk assessments and GBDL/ BL’s history of trade in the industry was sought. 16 Sept 2014 Generic letter explaining ADD condition [75/21]. 24 Sept 2014 Letter [75/23] repeating due diligence requests from 11 Sept 2014. 1 Nov 2014 Excise Notice 196, section 10 itself contains much guidance [15/3/1], and should be read in full. Examples of guidance therein are included within the full decision. 6 Nov 2014 Letter to GBDL/BL from IOM C&E raising concerns with their due diligence [75/28]. Question 23 [10/6C/K/5]: “How do you assure the supply chains you deal in; e.g. do you look at your customer’s customer? If not, why not?”

“ The corollary of the rule that judgments are binding on parties and privies is that judgments can have no such effect as between strangers or a party and a stranger… ”