Dáil Éireann Debate, Thursday - 28 March 2013
95. Deputy Brendan Smith asked the Minister for Finance if he is satisfied that the powers assigned to the Revenue Commissioners and other statutory agencies are adequate to deal with illegal trading in diesel and other fuel products which results in a major financial loss to the Exchequer and distorts trade on a local basis; the proposals, if any, he intends to introduce to deal with these issues; and if he will make a statement on the matter. [15889/13]
View answerI am advised by the Revenue Commissioners, who have responsibility for the collection of mineral oil tax and for tackling the illicit trade in mineral oil products, that they are very aware of the threat that illegal activity in diesel and other fuel products poses to the Exchequer and to legitimate businesses. The main form of criminality in this area is the laundering of marked gas oil whereby the marker is removed from the gas oil and the laundered product is then sold as auto-fuel. As well as impacting negatively on the exchequer and on legitimate business, the laundering of marked fuel threatens the environment through the waste sludge that it generates. In addition, laundered fuel can damage the engines of vehicles in which it is used. Combating this activity is a major priority for Revenue and considerable success has been achieved in this area.
Revenue officers have extensive powers to deal with this criminal activity, including the power to search premises and to stop, examine and search vehicles; take samples of mineral oil and question the owners or persons in charge of, or present in relation to, vehicles or premises. Revenue officers have the power also to detain and seize mineral oil products and any vehicle in which such products are found.
Revenue officers have powers of arrest where a person has committed certain mineral oil tax offences, for example, where a person, without the consent of the Revenue Commissioners, removes or attempts to remove, or is knowingly concerned in removing or attempting to remove, any marker from any mineral oil, or knowingly deals in mineral oil from which a marker has been removed, or to which anything has been added in order to impede identification of the marker, or keeps or has prohibited goods on any premises or other land or on any vehicle. Revenue officers can raise assessments also on the amount of excise duty payable where they believe a person has an excise duty liability.
In early 2011, in response to the escalation of the fuel laundering threat, Revenue strengthened the fuel-licensing regime for auto fuel traders, with effect from September 2011, to limit the ability of the fuel criminals to get laundered fuel onto the market. Following the enactment of new licensing provisions in the Finance Act 2012, this regime was strengthened further and a new licensing regime was introduced for marked fuel traders in October 2012, which is designed to limit the ability of fuel criminals to source marked fuel for laundering. Under the provisions of the Finance Act 2012, Revenue also introduced new supply chain controls from January 2013. These controls require all licensed fuel traders, whether dealing in road fuel or marked fuel, to make monthly electronic returns to Revenue of their fuel transactions. This information will provide assurance about the distribution of all fuels and identify suspicious or anomalous transactions and distribution patterns.
In the period 2011 to 2012, Revenue closed 89 auto fuel retail outlets because they were unlicensed or operating in breach of licensing conditions. In this period Revenue also seized over 2 million litres of fuel and detected and closed 20 oil laundries. In view of the links between organised criminals and the illegal fuel trade, Revenue works closely with An Garda Síochána and other law enforcement agencies. A Cross-Border Fuel Fraud Enforcement Group, involving all relevant agencies from the State and from Northern Ireland, facilitates co-operation among these agencies in dealing with the illegal fuel trade. Arising from its work, a number of groups operating in both jurisdictions and involved in the production and distribution of laundered diesel, have been targeted for investigation.
In addition, Revenue is working in close co-operation with Her Majesty’s Revenue and Customs on obtaining an improved and more effective fuel marker. A Memorandum of Understanding was signed in May 2012 on a joint approach to seeking a new marker for rebated fuel and a joint 'Invitation to Make Submissions' (IMS) issued in June 2012 for this purpose. The final date for submissions was 30 November 2012. The IMS generated international interest and twelve submissions were received by the closing date. These submissions are being evaluated at present.
I am informed by Revenue that the effectiveness of the new rules will be closely monitored and evaluated. If, as a result of this evaluation or due to other developments in this illicit trade, Revenue bring forward further proposals for additional powers then my record in this area shows that any such proposals will be given favourable consideration in the context of future Finance Bill provisions.
