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Last week I was travelling to London Heathrow from Pakistan. The immigration officer asked me my reason for coming to the UK. I replied that I was going to visit my friends and also meeting with an accountant because I will be applying as a genuine entrepreneur (which was true). The officer also asked what I had with me. I replied that I had my personal belongings and 10 sleeves of cigarettes. After that, he interviewed me and cancelled my visa with the stated reason that I did not have enough money to pay taxes on cigarettes and denied entry under paragraph 320(19).

My questions:

  1. Would it be difficult to get another entry clearance soon?

  2. What are the potential consequences on future UK entrepreneur visa applications, as I meet all their criteria easily?

  3. What is the potential impact on future Schengen visas, which I already got more than 15 times?

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    If you didn't have the funds to pay duty to import cigarettes, how did you have sufficient funds for your trip? – Zach Lipton May 24 '16 at 19:17
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    Did you have money to pay for the taxes? If yes, then were you given a chance to pay or denied without having given a chance? – trollster May 24 '16 at 21:27
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    Is a 'sleeve' a box with 200 cigarettes, meaning that you had 10 times the allowed number of cigarettes with you? Were you planning to open a shop? – Tor-Einar Jarnbjo May 24 '16 at 22:04
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This answer assumes your entry clearance was issued under Appendix V of the rules.

Your entry clearance was cancelled and you were removed from the UK. The stated reason is that you did not have the funds to pay for the cigarettes you were importing, I figure it was roughly GBP 160.

The Immigration Officer was entitled to assume that you were in a position to be aware that import duty was required when you bring lots of cigarettes in to the UK, and similarly you were in a position to know roughly the amount you needed to pay. And you did not have have the money to hand.

This leaves the inevitable conclusion that you did not intend to pay and instead sell them inside the UK on the black market, which would be illegal. And so you were removed. While you cannot be sure, it's likely they got you on Paragraph 321, sub paragraph (iii)...

(iii) on grounds which would have led to a refusal under paragraphs 320(2), 320(6), 320(18A), 320(18B) or 320(19) (except where this sub-paragraph applies in respect of an entry clearance issued under Appendix Armed Forces it is to be read as if for “paragraphs 320(2), 320(6), 320(18A), 320(18B) or 320(19)” it said “paragraph 8(a), (b), (c) or (g) and paragraph 9(d)”)

...which is hard to read but when all the gobbledygook is resolved, it means you did not disclose in your entry clearance application that you were coming to the UK to do something illegal.

Would it be difficult to get another entry clearance soon?

It's all down to the opinion of whomever you ask, so leaving opinions aside, you need to instruct a UK solicitor to handle your next application. Without a professional on your case who has a practice area in complex applications, then yes, getting another entry clearance will be very difficult.

What are the potential consequences on future UK entrepreneur visa applications, as I meet all their criteria easily?

Well no, perhaps you did meet all their criteria at some point, but moving from peddling cigarettes on the black market to becoming a Tier 1 Entrepreneur is going to be a bit awkward to explain. In other words your credibility has taken a serious hit with respect to anything on the PBS side of things. If you want to ask more questions about this aspect of your removal, you need to use the Expats site. This site is constrained to Appendix V of the rules.

What is the potential impact on future Schengen visas, which I already got more than 15 times?

Assuming we're back on the visitor/tourist side of things where Schengen is concerned (as opposed to a skilled migrant), you can be sure that the UK told Schengen about the event. So it's reasonable to expect Schengen to refuse under Reason 9, see Schengen Visa Refusal: Justification for the purpose and conditions of the intended stay was not reliable because as mentioned your credibility has taken a hit and you need a practitioner to determine what and when your next visa application will be.

Update

In comments the OP revealed that he was actually removed under Paragraph 320 (19) which is a key reference in my guess of Paragraph 321 (iii) above so the above answer remains 'as is'. The Paragraph 320 (19) says...

(19) The immigration officer deems the exclusion of the person from the United Kingdom to be conducive to the public good. For example, because the person’s conduct (including convictions which do not fall within paragraph 320(2)), character, associations, or other reasons, make it undesirable to grant them leave to enter.

What this tells us is that during the landing interview and subsequent detention followed by the removal, you did something that got them angry. Your narrative doesn't include that part of the episode, but we can assume that there were one or more displays of indecorous behaviour which were interpreted as disruptive or insulting. So as the Americans say, they "upped the ante".

During my training with the IAS, I worked with detainees at Heathrow and Gatwick and can attest that detention is a very stressful event. It disrupts one's plans in an unexpected way, and the anxiety caused by having your phone confiscated can be horrific. And worse, the detention room at any given point in the day will have a variety of muttering whackos, incoherent screwballs, drunkards and the like that can invade one's sense of personal safety. They monitor and keep it safe, but for a novice, it can be intimidating. For some people, this will result in inappropriate behaviour. However, it's important to remain calm and compliant or matters can become dramatically worse, like in this case.

Follow up questions from the comments...

is there any ban period for sometime under paragraph 320(19)

No, there are no provisions in Paragraphs 320 or 321 to issue a ban from portside (except in openly criminal type situations like forgery). The rules are clear that bans are issued at the application stage. So you do not have a ban, presumably good news for you.

also it would be highly unlikely that all my future uk application might refuse straightaway

As I pointed out, bans happen at the application stage. So during your next application if the ECO decides to refuse the application, she has the additional option to place a ban...

where the applicant has previously contrived in a significant way to frustrate the intentions of the Rules by:

Maybe she will, maybe she won't. If she issues a ban it will start ticking on the decision date of the application, not the previous removal date. Personally I don't think this is worth a ban; they will simply use serial refusals instead.

Bottom Line, TL;DR

Getting opinions from random people on the net can perhaps help with your anxiety about the removal, but the only productive way to move forward is via consultations with a UK practitioner who has practice area in complex applications. Getting a practitioner from the top tiers to take you under client care will be difficult. And that's because you were in a position to be aware of what you were doing with the smuggling gambit, and secondarily you were also in a position to be aware that indecorous or insulting behaviour is not appropriate during a landing interview/detention.

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