R v Islam

Factual and Procedural Background

On 1 February 2006 at Snaresbrook Crown Court, the Appellant pleaded guilty to two counts of being knowingly concerned in the fraudulent evasion of the prohibition of the importation of goods contrary to section 170(2) of the Customs and Excise Management Act 1979. The Appellant was responsible for the importation of 3.53 kg of heroin in a consignment of vegetables and fish arriving at Southampton from Bangladesh on 14 February 2005, and 0.438 kg of heroin in a consignment of beauty products arriving at Felixstowe from Bangladesh on 1 March 2005. Neither consignment came into the physical possession of the Appellant, as both were seized by Customs at the port.

On 5 January 2007, a confiscation order was made against the Appellant by His Honour Judge Collender QC in the sum of £404,604. Additionally, an order was made under section 27 of the Misuse of Drugs Act 1971 for the forfeiture and destruction of the drugs.

The Appellant appeals one aspect of the judge's judgment in the confiscation proceedings, specifically the inclusion of £71,424 representing the wholesale value of the heroin in the calculation of the benefit derived from the offences.

Legal Issues Presented

1. Whether the judge was correct to hold that the Appellant obtained the heroin at the moment of importation and thus derived a benefit from it, despite the drugs being seized before physical possession.
2. Whether the judge erred in measuring the Appellant's benefit by including the wholesale value of the drugs in the confiscation order.

Arguments of the Parties

Appellant's Arguments

• The judge was wrong to include the wholesale value of the heroin in the benefit calculation because the drugs were seized before coming into physical possession.
• A more fundamental argument was advanced that no value should be placed on the drugs in calculating benefit, as "market value" under the statute implies value in a lawful market, and there is no lawful market for heroin.

Respondent's Arguments

• The Appellant, as importer and consignee, obtained property in the goods in connection with their importation, making the inclusion of the wholesale value appropriate.
• The value of the property for determining benefit should be the market value at the time the property was obtained, regardless of physical possession or seizure.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
R v May [2008] UKHL 28	Confirmed that an importer obtains property in goods upon importation regardless of physical possession.	Used to reject the Appellant's first ground of appeal regarding obtaining property at importation.
Jennings v CPS [2008] UKHL 29	Supported the principle that property is obtained by the importer at importation.	Reinforced the court's position on property acquisition despite seizure.
Thacker (1995) 16 Cr App Rep (S) 461	Held that once drugs are seized by Customs, they cease to be property held by the defendant and have no realisable value.	Referenced in considering whether to include drug value in benefit calculation.
Dore [1997] 2 Cr App R(S) 152	Clarified that the market value of drugs must be lawful market value, thus illegal drugs have no market value for confiscation purposes.	Used to reject inclusion of drug value in confiscation order and to discuss statutory assumptions on expenditure.
Berry [2000] 1 Cr App R (S) 352	Distinguished between valuing realisable assets and valuing criminal benefit.	Noted that drugs must be valued at nil for realisable assets but this may not apply to benefit valuation.
Ajibade [2006] EWCA Crim 368	Confirmed that drugs should be valued at nil for benefit calculation if the defendant is a courier.	Allowed appeal and quashed confiscation order including drug value.
Hussain [2006] EWCA Crim 621	Held that "market value" means value in a lawful market; illegal drugs have no market value for confiscation purposes.	Bound the court to hold the judge erred in including drug value in the benefit calculation.
Cadman Smith [2002] 2 Cr App R (S) 37	Addressed benefit calculation in relation to evaded duty on cigarettes.	Used to illustrate anomalies in valuing benefits from different contraband goods.
Rose [2008] EWCA Crim 239	Confirmed that illegal drugs have no value under sections 79 and 80 of the Proceeds of Crime Act 2002.	Supported the court's conclusion on the drug value issue.

Court's Reasoning and Analysis

The court began by affirming that the Appellant, as importer and consignee, obtained property in the heroin at the point of importation, consistent with the House of Lords decisions in R v May and Jennings v CPS. The fact that the drugs were seized before physical possession was irrelevant to property acquisition.

The critical legal question was whether the wholesale value of the drugs could be included in the benefit calculation for confiscation purposes. The court examined statutory provisions under the Proceeds of Crime Act 2002, specifically sections 6, 7, 76(4), 79, and 80, which govern benefit assessment and property valuation.

The court reviewed relevant case law, notably Dore and Hussain, which established that "market value" must be understood as value in a lawful market. Since heroin cannot be sold lawfully, it has no market value for these purposes. The court further considered the indirect route of inferring benefit via the purchase price of the drugs, but found no evidence to support such an inference in this case.

The court acknowledged anomalies in the law, such as differential treatment of contraband goods (e.g., drugs vs. cigarettes), and noted statutory assumptions about criminal lifestyle and expenditure. However, these did not justify including the wholesale value of the drugs directly in the benefit calculation.

Consequently, the court held that including the wholesale value of the heroin as benefit was legally incorrect and reduced the confiscation order accordingly.

Holding and Implications

The court ALLOWED the appeal in part and ordered the confiscation amount to be reduced by £71,424, the sum representing the wholesale value of the heroin.

This decision directly affects the financial liability of the Appellant by excluding the wholesale value of seized heroin from the benefit calculation. The ruling clarifies the application of "market value" under the Proceeds of Crime Act 2002, confirming that illegal drugs have no market value for confiscation purposes. No broader precedent beyond the specific facts of this case was established.