I propose to take Questions Nos. 55 and 56 together.
I am informed by the Revenue Commissioners, who are responsible for the collection of tobacco products tax and mineral oil tax and for tackling the illicit trade in tobacco and oil products, that they attach a high priority to dealing with these criminal activities. I am also advised by the Commissioners that in general claims about the size of illegal markets need to be treated with caution.
Tobacco
The strategy employed by Revenue to tackle the illicit tobacco 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 detection technologies, and optimum deployment of resources at point of importation and inland, in order to intercept the contraband product and to prosecute those involved.
Interception of illicit tobacco products 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 also carries out regular multi-agency operations, particularly in relation to large maritime importations. Revenue both provides and receives intelligence from other customs administrations and works closely with the European Anti-Fraud Office, OLAF, in its efforts to tackle the illicit sale of tobacco at an international level. This international cooperation and sharing of intelligence and expertise plays an important role in combating tobacco smuggling on a global basis.
There is close cooperation between Revenue and An Garda Síochána in targeting the illicit tobacco trade. In addition, the relevant agencies in the State and in Northern Ireland work closely together, through a cross-border group on tobacco enforcement, to combat the organised crime groups that are responsible for a large proportion of the illegal tobacco market.
Considerable success has been achieved in combating the illegal trade in tobacco products. In 2010 and 2011 seizures of cigarettes were, respectively, 178.4 million and 109.1 million. Seizures of other tobacco products in those years were 3,367 kilograms (2010) and 11,158 kilograms (2011). Seizures to date in 2012 amount to more than 91 million cigarettes and more than 4,000 kilograms of tobacco.
In 2012, to the end of October, there were 52 convictions for tobacco smuggling, resulting in fines of €88,550 and 22 custodial sentences, 6 of which were suspended. There were, in addition, 60 convictions connected with the sale or keeping for sale of unstamped tobacco products, resulting in fines of €106,300 and 22 custodial sentences, 14 of which were suspended.
The fines that may be imposed where a person is convicted on indictment for an offence under mineral oil tax or tobacco products tax law, or for the evasion or attempted evasion of excise duty, were increased substantially by the Finance Act 2010. The penalty to be imposed in any particular case where a person is convicted is a matter for the Courts.
Oil
The main form of criminality in the fuel sector is the laundering of marked gas oil and the sale of the laundered product as auto-fuel. Just like the illegal trade in tobacco products, this poses a serious threat to the Exchequer and to legitimate businesses. In addition, laundered fuel can seriously damage the engines of vehicles in which it is used, and the waste sludge produced by the laundering process is an environmental risk.
Given the links of organised criminality with the illegal fuel trade, Revenue works closely with An Garda Síochána in combating it. Searches undertaken as part of intelligence-led operations have resulted in a considerable number of seizures of diesel and the closure of laundering plants, particularly in border counties.
A Cross-Border Task Force, involving the relevant agencies from the State and from Northern Ireland is also in place in respect of the illegal fuel trade and facilitates and enhances cooperation in dealing with this form of criminality. Arising from its work, a number of groups involved in the laundering and distribution of illegal fuels, which operate in both jurisdictions, have been specifically targeted for investigation.
The Revenue Commissioners advise that, in 2011, 9 laundries were detected and 327,000 litres of fuel were seized, along with 9 oil tankers and 29 other vehicles. 16 persons were arrested in the course of those operations and files have been sent to the Director of Public Prosecutions, who has to date issued directions to prosecute in a number of these cases.
In 2012, to the end of October, 11 laundries were detected and shut down and 199,000 litres of oil were seized, along with 28 vehicles and 5 trailers. There were 10 arrests in the course of those operations.
In addition to the ongoing enforcement action against the illegal fuel trade, steps are being taken to ensure enhanced control and supervision at all stages of the fuel supply chain.
Key actions include a strengthening of the licensing arrangements for businesses selling auto-fuel, and of the enforcement of licensing requirements. 32 premises were closed in 2011 for trading without a licence or for breach of licence conditions, and a further 49 have been closed to the end of October this year. In addition, new licensing requirements are in force since 1 October for anyone dealing in marked fuels. As well as these important licensing changes, there will be a requirement, as and from 1 January 2013, for all fuel traders to make electronic monthly returns to revenue on their fuel transactions. This will facilitate Revenue in detecting unusual or anomalous patterns of activity.
Work is proceeding also, in close collaboration with Her Majesty’s Revenue and Customs, on obtaining an improved fuel marker. The closing date for receipt of proposals for development of a new marker is 30 November.
The Revenue Commissioners will continue their extensive work against the illegal fuel and tobacco trades, and, in addition to ongoing enforcement activities, will continue to develop innovative ways of combating those responsible for this criminal activity.
Counterfeit
The role of the Revenue Commissioners in respect of counterfeit or pirated goods concerns cases where such goods are either being imported from or exported to any country outside of the EU. In 2011, Revenue seized 146,000 counterfeit or pirated items with an estimated value of over €9 million. In 2012, to the end of September, 76,800 items, with an estimated value of more than €3.7 million, were seized. The range of goods seized is extensive and includes perfumes and cosmetics, shoes, clothing and personal accessories, mobile phones, electronic and computer equipment, CDs, DVDs, toys and medicines.
