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Fuel Smuggling

Dáil Éireann Debate, Wednesday - 18 April 2012

Wednesday, 18 April 2012

Questions (48)

Charlie McConalogue

Question:

42 Deputy Charlie McConalogue asked the Minister for Finance if he will provide an update on the working group established within his Department on the problem of fuel smuggling; and if he will make a statement on the matter. [19282/12]

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Written answers

As the Deputy is aware, a working group was set up between officials of my Department, the IRHA and some members of the Oireachtas to discuss a number of issues of concern to the haulage industry including the matter of fuel smuggling. As I am sure the Deputy will appreciate, I cannot pre-empt the outcome of the working group discussions which are still ongoing. However, I am well aware that illegal activity in the form of diesel fuel laundering does pose a serious threat to the Exchequer. Fuel laundering involves large-scale removal of markers from rebated mineral oil, which is subject to a reduced rate of mineral oil tax on condition that it is not used in road vehicles. This form of tax evasion is a matter the Revenue Commissioners and the Government take very seriously, particularly given the current economic climate.

Revenue employs a broad range of compliance and enforcement strategies to detect and counteract illegal practices involving mineral oils. These include ongoing analysis of the nature and extent of the problem; development and sharing of intelligence with agencies on both sides of the border; the conduct of intelligence driven operations using covert surveillance to identify oil laundry locations; seizure of illicit product, laundering equipment and vehicles; physical sampling at road checkpoints; closure of unlicensed or improperly licensed outlets and seizure of stock, and prosecution of those involved in illegal activities in relation to mineral oils.

In 2010, Revenue enforcement staff detected four oil-laundering plants in this jurisdiction and seized 228,000 litres of laundered oil. In addition, nine retailers were found dealing in laundered oil and eight haulage companies were detected using it in their vehicles. There were four court convictions in 2010 for laundered oil offences.

In 2011 nine oil laundries and 327,000 litres of laundered fuel were seized, together with nine oil tankers and twenty-nine other vehicles. Sixteen persons were arrested in the course of these operations and files have been sent to the Director of Public Prosecutions, who has to date issued directions to prosecute on indictment in respect of two of the cases. In addition, a further 718,181 litres of illicit mineral oil has been seized, the large majority from retail outlets or in the course of delivery to such outlets

Revenue is currently engaged in a vigorous campaign targeting specific locations nationwide, with the intention of immediate closure of unlicensed outlets and the challenging of other instances of non-compliance. As part of this drive, warning letters have been issued to unlicensed retail outlets and a number of these have been effectively closed down by the actions of Revenue enforcement teams. This campaign is ongoing and Revenue is in the process of seizing illicit product and closing down a further number of unlicensed or otherwise illegal retail outlets.

Revenue is currently reviewing its enforcement options to ensure that its action against this illegal activity continues to be as effective as possible. The matters being addressed include the potential development of an enhanced fuel marker. In this regard, close liaison has been established with HM Revenue and Customs. Consideration is being given also, in the context of the forthcoming Finance Act, to possible changes in the law, particularly from the point of view of the control of the supply of oil, which would enhance the capacity to combat this illegality.

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