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Fuel Laundering

Dáil Éireann Debate, Thursday - 20 February 2014

Thursday, 20 February 2014

Questions (51)

Denis Naughten

Question:

51. Deputy Denis Naughten asked the Minister for Finance the estimated loss to the Exchequer as a result of fuel laundering; the steps taken to curb this practice; and if he will make a statement on the matter. [8712/14]

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Written answers

I am sure the Deputy will appreciate that it is inherently difficult to estimate the extent of any illicit activity and its impact on the exchequer and the wider economy.  The Revenue Commissioners advise me that, while there is no reliable estimate of the scale of illegal activity in the fuel sector, they recognise that the laundering of markers from rebated fuels represents a significant threat to exchequer revenues.  Revenue has made action against this illegal activity one of its priorities and is implementing a comprehensive strategy to tackle the problem through enhanced supply chain controls, the acquisition of a more effective fuel marker and continued robust enforcement action.  Revenue's strategy includes the following elements:

- The licensing regime for auto fuel traders was strengthened with effect from September 2011 to limit the ability of the fuel criminals to get laundered fuel onto the market;

- A new licensing regime was introduced for marked fuel traders in October 2012, which is designed to limit the ability of criminals to source marked fuel for laundering;

- New requirements in relation to fuel traders' records of stock movements and fuel deliveries were introduced to ensure data are available to assist in supply chain analysis;

- Following a significant investment in the required IT systems, new supply chain controls were introduced 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.  Revenue is using this data to identify suspicious or anomalous transactions and patterns of distribution that will support follow-up enforcement action where necessary;

- An intensified targeting, in co-operation with other law enforcement agencies on both sides of the border, of enforcement action against suspected fuel laundering operations; and

- following a joint process, Revenue and HM Revenue & Customs in the UK have identified a new product to mark rebated fuels in a move that will boost the fight against illegal fuel laundering in both jurisdictions.

Revenue also works with fuel sector representative bodies, which have been very supportive of the range of measures introduced to combat fuel laundering, to improve the integrity of the distribution system and minimise the risk of fraud. In support of this, I introduced a provision in the Finance (No. 2) Act 2013 that will make a supplier who is reckless in supplying rebated fuel for a use connected with excise fraud liable for the duty evaded. This new provision will strengthen Revenue's hand in dealing with those traders supplying fuel recklessly to dubious customers.  Revenue has recently published guidelines for mineral oil traders which will assist them in identifying and avoiding such transactions.  Revenue chairs the Hidden Economy Monitoring Group and has established regional sub-groups to facilitate traders reporting suspicious matters through their representative associations on a confidential basis.  This information can assist Revenue in closing down the illicit trade by identifying traders supplying fuel to launderers and by identifying outlets that are selling laundered diesel.  Revenue's enforcement strategy in the fuel sector has already yielded significant results.  In the period from mid-2011 to end January 2014, 123 filling stations were closed for breaches of licensing conditions.  Since the beginning of 2011, over 2.7 million litres of fuel have been seized and 29 oil laundries detected and closed down, including 9 oil laundries in 2013.

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