Robert Troy
Question:173. Deputy Robert Troy asked the Minister for Finance the measures being adopted by his Department to tackle the cross-border fuel laundering industry; and if he will make a statement on the matter. [19128/13]
View answerTuesday, 23 April 2013
Questions (173, 174)
Robert Troy
Question:174. Deputy Robert Troy asked the Minister for Finance if he will consider moving towards a fuel refund/rebate scheme along the US model in order to tackle cross-border fuel laundering which would necessitate a high degree of co-operation between various Government Departments, cross-border agencies, the Northern Ireland Executive and the British Government, in order to bring this criminal activity to an end. [19129/13]
View answerWritten answers
I propose to take Questions Nos. 173 and 174 together.
I am advised by the Revenue Commissioners that they are very aware of the threat that fuel laundering poses both to the exchequer and to legitimate businesses and that tackling this problem is a high priority. Fuel laundering imposes significant costs on the community and poses a serious threat to tax yield and to legitimate businesses. As part of its strategy to curb illegal activity in this area, Revenue strengthened licensing requirements for traders in auto fuels in 2011 to limit the ability of fuel criminals to get laundered fuel onto the market. A new licensing requirement was introduced for traders in marked fuel oil from 1 October 2012 to limit the ability of fuel criminals to source marked fuel for laundering. In addition, Revenue introduced new supply chain controls requiring all licensed fuel retailers to make monthly returns to Revenue, from 1 January 2013, of their fuel transactions, which will provide assurance about the distribution of all fuels and identify suspicious or anomalous transactions and distribution patterns.
In the period 2011 to 2012, over 2 million litres of fuel was seized, 20 fuel laundries were detected and closed and 89 filling stations were closed because they were unlicensed or in breach of licensing conditions.
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 and Her Majesty’s Revenue and Customs (HMRC) in the United Kingdom are pursuing jointly a new and more effective fuel marker for common use in both jurisdictions. A Memorandum of Understanding was agreed in 2012 by Revenue and HMRC and work on the project is proceeding. A joint ‘Invitation to Make Submissions’ (IMS), which issued in June 2012, generated international interest and twelve submissions were received by the closing date. These submissions are being evaluated jointly at present by Revenue and HMRC on the basis of agreed scientific, legal and operational criteria.
The question of introducing a rebate scheme for users of marked gas oil has been addressed in previous parliamentary debates. A change to a system of this nature would involve the establishment of an expensive repayments system and would give rise to significant costs and place an administrative burden on oil traders, users and the Revenue Commissioners. It would also pose significant cash-flow costs for those currently using marked gas oil. Marked gas oil has a wide range of uses such as the propulsion of trains, the operation of agricultural, construction and industrial machinery, commercial sea-navigation (including fishing) and for commercial and home heating purposes. Any change in the existing system would therefore impact across a wide range of users. In addition, repayment schemes are vulnerable to abuse and the introduction of a wide-ranging scheme such as that proposed would not necessarily offer greater security against fraud than the current arrangements.