CO885-(15-16) — Page 344

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PUBLIC RECORD OFFICE

Reference :-

C.O. 885

15 PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH—NOT TO

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extent from countries which are not parties to the Convention-e.g., the United States and Switzerland.

In order to ascertain what is the real scope of the Article I., it is necessary, in the first place, to determine how much per cent. of added sugar will bring any sugar products within the meaning of the words, as translated, "a notable proportion"; but this is probably a matter for the determination of the Permanent Commission, as it is obviously desirable that there should be uniformity of practice on this matter in all the countries which are parties to the Convention. There is nothing to show that it was ever the intention of the Convention that it should be applied to articles which contain only a small proportion of added sugar, and it is not thought that the Contracting States would support such a contention.

The quantity of sugar in goods imported into the United Kingdom has, of neces- sity, to be ascertained by the officers of Customs because, where there is not any fixed rate of customs duty imposed by law upon the goods by name, duty is charged under Section 7 of "The Finance Act, 1901" (1 Edw. VII., cap. 7) by reference to the quantity of sugar contained therein.

It is thought to be not improbable that goods so imported may be manufactured from bounty-fed sugar. Condensed milk and chocolate are instances of goods im- ported from Switzerland to a large extent, and it is thought that they may be manu- factured from Russian sugar. The quantity of sugar imported from Switzerland as contained in condensed milk, after allowing the quantity natural to milk itself, is about 40 per cent. of the bulk, and, in chocolate, varies from 41 to 76 per cent.

If imported goods are produced from bounty-fed sugar, there is a hardship upon the British manufacturer, e.g., a confectioner or maker of sugar-sweetened goods, in the competition for sale of his goods, as he cannot obtain bounty-fed sugar, and it is suggested that sugar which is prohibited to be imported in the condition of sugar should not be free from the prohibition because it forms part of other goods in the preparation of which it has been used. In the case of the composite goods im- ported it would be impossible to separate the sugar from the other component parts of the goods.

As the importation of bounty-fed sugar is prohibited, such sugar, if imported, becomes forfeited, and it is, therefore, necessary to consider the position with regard to forfeited goods which are mixed with goods which are not forfeited. This matter was the subject of a decision in 1775, Rex o. Mawbey, reported in Lofft's Reports, p. 179. This case was decided upon the statute 1, Geo. III., cap. 1, against the dis- tillation of wheat, and had reference to a seizure of 200 quarters of corn preparing for that use in the proportion of one-third wheat and two-thirds barley. At the trial before Lord Mansfield, a special verdict was given, and it was found (inter alia) that the wheat and barley were so mixed that it was impossible to separate them. The question whether the seizure was lawful was reserved and submitted to the Court. It was argued before Lord Mansfield and two other Judges when the point was taken, that there was no power to seize a mixture, but it was held unanimously that the seizure was lawful. This case has always been regarded as establishing the position that, if forfeited goods are mixed with goods that are not forfeited, so that the one cannot be separated from the other, the whole is forfeited.

It is probable that, notwithstanding the conclusion already arrived at upon Article III., as above mentioned, a proposal to adopt a limitation of surtaxes on sugar- sweetened products may be discussed at the meeting of the Permanent Commission, which is fixed for the 10th October next, and if a limitation is adopted it may become necessary to deal with the importation into the United Kingdom of these composite goods by legislation or some other means. There would be no difficulty in giving effect to a prohibition, but it would mean that the numerous products containing either a notable proportion or more than a certain percentage (as might be fixed by the Commission) of added sugar, and coming from countries which either give direct bounties or maintain a higher surtax than that fixed by the Commission, would have to be wholly excluded from the United Kingdom.

The questions upon which it is desired to obtain the opinion of the Law Officers

are:-

1. Whether the word sugars, as used in the Sugar Convention Act, 1903, can be held to include the sugar contained in sugar-sweetened products, so that upon an Order in Council being made, prohibiting the importation of sugar (without, as in the present Orders, any words of exception excluding sugar-sweetened products) the officers of Customs would be justified in seizing as forfeited such imported goods,

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e.g., Swiss milk and chocolate, as are referred to in the case if made with bounty-fed sugar?; and

2. Whether, in the existing state of the law, an Order in Council can be made directly prohibiting the importation of sugar-sweetened products generally, or the importation of named sugar-sweetened products, or of sugar-sweetened products con- taining more than a given proportion of sugar by reason of the Permanent Com- mission reporting either that they contain bounty-fed sugar or that they are in receipt of a bounty arising from an excessive surtax or otherwise?

Opinion.

1. We think that the first question should be answered in the affirmative. We understand from the instructions that the sugar exists as such in these pro- ducts, and not in any new chemical combination, although it cannot for commercial purposes be separated from the other ingredients of the product.

If so, sugar on which a bounty has been paid is being brought into the United Kingdom, and the Act applies.

The difficulty arising on the language of the 1st Article is, we think, met by the consideration that the special definition of sugar for the purposes of this Article was wanted to meet the case of bounties being granted on the production or exportation of sugar-sweetened articles as such.

2. We think that the second question should be answered in the negative. The Act applies only to sugar.

If it be decided to issue an Order not exempting sugar-sweetened products, some notification to the trade of its scope and effect may be desirable.

Royal Courts of Justice,

October 4, 1904.

R. B. FINLAY. EDWARD CARSON.