Manage risk associated with dealing with duty fraud: Without effective safeguards in place all businesses are exposed to considerable risks along alcohol supply chains and may become implicated in illicit trading, which raises a need to regularly assess and manage these risks for the business.

Put in place effective mitigation strategy where risk of fraud is detected.: Having procedures in place to take timely and effective mitigating action where a risk of fraud is identified to minimise the risks associated with alcohol supply chain fraud.

Before entering into a trade with a supplier, The Crafty Bottle Limited will record and document the following information belonging to the supplier

• Letter of introduction stating nature of suppliers business and products available
• Payment terms, including returns policy and credit agreements (if any credit agreement was made)
• Company Bank Details
• Company details including:
  • Company Registration Number
  • VAT Registration Number (if the supplier has one)
  • HMRC Deferment Number (if applicable)
  • AWRS Number (URN)
  • Warehouse Address
  • Excise Registration Certificate Number

Then the documented information will be cross referenced with other legitimate sources, such as the Company House, HMRC including checks of the online look up system for AWRS approved wholesalers. After these checks, The Crafty Bottle would establish the risk associated with entering into a trade with the supplier. Further questions and site visits will be conducted as appropriate based on the risk factor. Any suspicious retail pricing at uneconomic levels or improper trading patterns will be reported to HMRC in a timely manner.

All high risk suppliers will be reviewed every three months; all other suppliers will be reviewed on an annual basis.

Before entering into a trade with a customer, The Crafty Bottle will require customers to provide the following information about their business:

• Copy of Incorporate Certificate
• Copy of VAT Certificate
• Company Bank Details
• Owners Photo ID details such as Passport or Driving License

Then the documented information will be cross referenced with other legitimate sources, such as the Company House and HMRC. After these checks, The Crafty Bottle would establish the risk associated with entering into a trade with the customer. Further questions and site visits will be conducted as appropriate based on the risk factor. The payment methods for trade between customers and The Crafty Bottle Limited are Card, Bank Transfer or Cash. The Crafty Bottle Limited will not accept cheques.

All high risk customers that are accepted will be reviewed every three months; all other customers will be reviewed on an annual basis.

All customers who do not pass the internal check will be notified that The Crafty Bottle Limited will not be able to enter into a trade and customers with suspicious behaviour will be reported to HMRC in a timely manner.

Failure to demonstrate due diligence may lead HMRC to conclude that a business is a risk to the revenue and not “fit and proper” for the purpose of excise legislation. This may lead to restrictions or conditions being imposed and, ultimately, to the withdrawal of authorisations, financial penalties, prosecutions and the seizure of stock. Therefore The Crafty Bottle Limited would take the due diligence process very seriously and ensure that we meet all the standards set out to help HMRC with their initiative to help with business avoid implicating themselves into illicit activities.