Dáil Éireann Debate, Tuesday - 31 May 2011
97 Deputy Dara Calleary asked the Minister for Finance his views on the Europol report on criminal activity in the European Union which describes Ireland as one of the preferred destinations for cigarette smuggling because of its high taxes on tobacco. [13300/11]
View answerThe Europol EU Organised Crime Threat Assessment (OCTA 2011) reported that preferred destinations for cigarette smuggling within the EU are countries with comparatively high taxes on tobacco such as the Scandinavian countries, Germany, Spain, the UK and Ireland. It has been the policy of successive governments to maintain comparatively high excise rates and thereby high prices for cigarettes as part of the national health policy on cigarette smoking. However, the level of cigarette smuggling in a given country is influenced by a variety of factors, of which price is only one. These factors also include geographical location, population demographics, the level of cross border trade, price differential with neighbouring countries and general accessibility by air, sea, road and rail.
I am informed that the Revenue Commissioners, who are responsible for the collection of tobacco products tax, have deemed the tackling of the illicit trade in cigarettes and tobacco products to be a high priority area. The strategy employed by Revenue to tackle this illicit trade is multi-faceted. It includes ongoing analysis of the nature and extent of the problem, developing and sharing intelligence on a national, EU and international basis, ongoing review of operational policies, development of analytics and deployment of detection technologies, optimum deployment of resources at point of importation and internally to intercept the contraband product and to prosecute those involved.
Interception at the point of importation is achieved through a combination of risk analysis, profiling, intelligence, and the screening of cargo, vehicles, baggage and postal packages. Revenue enforcement officers also target this illicit trade at the post-importation level by carrying out intelligence-based operations and random checks at retail outlets, markets and private and commercial premises. Revenue and An Garda Síochána also carry out regular multi-agency operations, particularly in relation to large maritime importations and in checks at inland markets.
Revenue enforcement officers are deployed at all key ports and airports. Personnel deployed at these locations are regularly supported by additional staff from other areas when specific operations are taking place. Interception at the point of importation is achieved through a combination of risk analysis, profiling, intelligence, and the screening of cargo, vehicles, baggage and postal packages.
In July of last year Revenue launched a nationwide tobacco operation, which concentrated additional Revenue resources at ports, airports and at various retail points for the purpose of identifying illicit tobacco products. This resulted in 561 seizures totalling 13.7m cigarettes and 195 kgs tobacco in the course of the two-week period of the operation. Two subsequent 3-day operations during 2010 resulted in the seizure of over 1.76m cigarettes and 175 kgs of tobacco. In two similar operations carried out in 2011, a total of 580 seizures were made, comprising 7.4m cigarettes and 167kgs tobacco.
The Revenue Commissioners have established a high level internal group, chaired at Commissioner level, to examine the risks related to tobacco products tax and to oversee and optimise the detection of counterfeit and contraband tobacco products. This group has promoted a number of initiatives aimed at counteracting the illicit trade in tobacco. These include adoption of a comprehensive tobacco strategy and action plan, improved profiling of passengers and freight to identify tobacco smugglers and the establishment of a confidential tobacco hotline via which members of the public and the retail trade may report illicit trade. It also co-ordinates national blitz-style operations.
In terms of detection equipment, a second mobile X-ray container scanner, to augment the one first deployed in 2006, was commissioned by Revenue in January 2010 and is now fully operational. Smaller baggage/parcel scanners are deployed at all major ports, airports and postal depots. In addition to the x-ray equipment, Revenue also uses a tobacco detection dog. This strategy has resulted in the seizure of a total of 178.3m cigarettes with a retail value of approximately €75.3m the period January to December 2010. In addition, during the period January 2011 to date, a total of 42.8m cigarettes were seized by Revenue.
98 Deputy Dara Calleary asked the Minister for Finance when he intends to increase the penalty for tobacco smuggling as proposed in the programme for Government. [13301/11]
View answerI am informed by the Revenue Commissioners that the penalties for tobacco smuggling are contained in Section 119 of the Finance Act 2001. That Section sets out the various actions that constitute offences of evasion or attempted evasion of excise duty. The court penalties when this provision was introduced in 2001 were, on summary conviction a fine of £1,500 or, at the discretion of the court, imprisonment for a term not exceeding 12 months or both the fine and imprisonment. On conviction on indictment the penalty was a fine of three times the value of the excisable products concerned, or £10,000, whichever was the greater, or at the discretion of the court, imprisonment for a term not exceeding five years or both the fine and imprisonment.
Since the introduction of this provision the monetary penalty on summary conviction has been increased on two occasions and now stands at €5,000. By virtue of Section 99 of the Finance Act 2010, the monetary penalty on conviction on indictment under this provision was substantially increased to a fine not exceeding €126,970, or where the value of the excisable products concerned is greater than €250,000, to a fine not exceeding three times the value of the products. The custodial penalties are unchanged. The precise penalty imposed on conviction in each case is of course solely a matter for the Courts.
I will be reviewing the existing penalties in relation to the smuggling and sale of illicit tobacco products to determine which of the penalties should be increased in line with the Programme for Government. In this context I will be consulting the Revenue Commissioners.
