Alcohol fraud prevention campaign delivers results for HMRC

25 Mar 19

The success of HMRC’s scheme stopping alcohol fraud before it starts was recognised by the Government Counter Fraud Awards this year, PF highlights. 

HMRC

 

An education campaign aimed at helping alcohol producers secure vulnerable supply chains and reduce fraud has delivered significant results – and scooped the Excellence in Fraud Prevention Award at the this year’s Government Counter Fraud Awards.

Alcohol fraud costs the UK government an estimated £1.3bn in excise duty and VAT every year. Goods are bought and sold through complex networks of international businesses and can often move between several countries before being diverted to the UK market. Identifying alcohol fraud can be complex, time-consuming and requires extensive international cooperation.

That’s why a team in HMRC launched the ‘tackling alcohol fraud at source’ education campaign – or TAF@S for short – which has recently been recognised in the Excellence in Fraud Prevention category at the 2019 Government Counter Fraud Awards.

“TAF@S fosters partnership working with industry to stop the supply to criminals before it starts,” says Gary Lampon, Organised Crime Operations at HMRC, who is part of the campaign team. “HMRC focused on a small number of popular brands of beer and wine featuring regularly in HMRC and Border Force seizures and also appearing in supply chains that have led to tax losses.”

These brands were traced to market-leading producers and the TAF@S campaign was developed to educate these businesses on how to improve supply chain integrity, thereby reducing supply to the illicit market. The team collected data on alcohol movements as well as seizures and tax losses to provide a rich and intricate picture of how alcohol fraud works and the key risks to popular brands.

A highly visual education tool was created to help simplify the complex data. This material highlighted the big picture around illicit alcohol movements, allowing producers to understand and appreciate the importance of managing supply chains. Brand owners were not involved in any illicit activity but the data indicated their products being appropriated and mis-used.

“The visualisations provide extremely effective education material, which has helped to focus customer due diligence activity on key risks.” adds Peter Lees, alcohol sector lead for Large Business at HMRC, who was also part of the project team. “HMRC delivered a programme of targeted education to beer and wine producers who responded positively to the increased level of information and engagement.”

Brand owners have subsequently taken decisive action to cease supplies to particular customers or destination markets, or now only supply duty-paid alcohol to help limit potential fraud. In addition to work with producers, HMRC is also delivering complementary education aimed at large professional services firms who support many of these businesses with expert advice on due diligence matters.

“TAF@S has involved the coordinated efforts of a huge number of HMRC people,” adds Richard Las, who leads the fight against alcohol fraud for HMRC. “Learning from the campaign is being applied right across the alcohol sector and the education model has been shared across other high-risk customer groups. The level of fraud prevented over five years by this campaign is set to exceed £600m, which is a hugely satisfying result and shows what preventative action can achieve.”

Further details on the HMRC Alcohol Strategy can be found by following this link to Gov.UK

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