Wednesday, 26 March 2014

Questions (38, 39, 40, 41)

Colm Keaveney

Question:

38. Deputy Colm Keaveney asked the Minister for Finance the number of seizures of illicit cigarettes or other tobacco products that have been made by the agencies of the State in each calendar year from 2011 to 2013, broken down by both the numbers of seizures and the quantities seized; and if he will make a statement on the matter. [14225/14]

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Colm Keaveney

Question:

39. Deputy Colm Keaveney asked the Minister for Finance the specific measures he has taken to combat the trade in illicit cigarettes or other illicit tobacco products since March 2011; and if he will make a statement on the matter. [14226/14]

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Colm Keaveney

Question:

40. Deputy Colm Keaveney asked the Minister for Finance his estimate of the size of the trade in illicit cigarettes or other illicit tobacco products; and if he will make a statement on the matter. [14227/14]

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Colm Keaveney

Question:

41. Deputy Colm Keaveney asked the Minister for Finance the specific measures he has taken to combat the trade in illicit cigarettes or other illicit tobacco products since March 2011; and if he will make a statement on the matter. [14228/14]

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Written answers (Question to Finance)

I propose to take Questions Nos. 38 to 41, inclusive, together.

The numbers of seizures of illicit cigarettes and other illicit tobacco products, and the quantities of product seized, in each of the years from 2011 to 2013, are set out in the table.  

 

Cigarettes

 

 

Tobacco

 

 

Seizures

Quantity (Million)

 

Seizures

Quantity (Kgs)

2011

10,581

109.1

 

1,500

11,158

2012

8,108

95.6

 

1,395

5,277

2013

5,802

40.8

 

1,086

4,203

 

I am advised by the Revenue Commissioners that the extent of the illicit cigarette market in Ireland is estimated through annual surveys of smokers. These surveys are undertaken for Revenue and the National Tobacco Control Office of the Health Services Executive by IPSOS MRBI. The survey for 2012 found that 13% of cigarettes consumed in Ireland are illicit. The comparable figure for 2011 was 14%. This would suggest that the extent of the problem is being contained, as a result of the extensive action being taken against the smuggling and sale of illicit product. A further survey was carried out at the end of 2013 and the results of this will be available in the near future.

The Deputy will of course appreciate that estimating the scale of any illegal activity and the resultant tax loss is difficult. I am however satisfied that the IPSOS MRBI survey is the best indicator of the extent of the market in illicit cigarettes. This is because of the methodologies used and the consistent manner in which the survey has been undertaken over a number of years. In addition, the survey methodology is, unlike other methodologies such as empty pack surveys, capable of distinguishing between legal personal imports and illicit cigarettes. The survey is also geographically representative and, unlike others, takes social class, age, gender and nationality into account.

I am advised also that combating the illegal tobacco trade is, and will continue to be, a high priority for the Revenue Commissioners. Their work against this illegal activity includes a range of measures designed to identify and target those who are engaged in the supply or sale of illicit products, with a view to seizing the illicit products and prosecuting those responsible. This multi-faceted strategy includes ongoing analysis of the nature and extent of the problem, developing and sharing intelligence on a national, EU and international basis, the use of analytics and detection technologies and ensuring the optimum deployment of resources at points of importation and within the country.

Interception of illicit tobacco products is achieved through a combination of risk analysis, profiling and intelligence and the screening of cargo, vehicles, baggage and postal packages. Revenue officers also target the 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.

There is extensive cooperation with An Garda Síochána in combating the illicit trade, and the relevant agencies in the State also work closely with their counterparts in Northern Ireland, through a cross-border group on tobacco enforcement, to target the organised crime groups that are responsible for a large proportion of the illegal tobacco market. In addition, cooperation takes place with other revenue administrations and with the European Anti-Fraud office, OLAF, in the on-going programmes at international level to tackle the illicit trade.

In addition, legislative action has been taken over recent years to ensure that the Revenue Commissioners have the requisite powers to respond effectively to the problem of the illegal tobacco trade. The Finance Act 2012 clarified the legal basis for Revenue officers to open and examine the contents of postal and courier packets that are reasonably believed to contain untaxed excise products. The Finance Act 2013 introduced new offence and forfeiture measures relating to the illicit production of tobacco, including offences for involvement with illicit tobacco production, knowingly dealing in or delivering any illicit tobacco product and keeping materials and equipment for the purposes of illicit production.  Provision was made also for the forfeiture of any equipment or materials, including unmanufactured tobacco, used for illicit production.

  That Act also strengthened the offence provisions relating to the sale or delivery of unstamped tobacco products.  The Finance (No. 2) Act 2013, provided that a person suspected of an offence of dealing in, or with, unstamped tobacco products must provide information to a Revenue Officer or a Garda, may be required to present any tobacco product concerned for examination, and makes provision for search by a Revenue Officer or Garda of any bag or other receptacle that he or she reasonably believes to contain tobacco products that are concerned in the offence.

As well as those changes to primary law Ireland, in accordance with EU Directive 2008/118/EU, introduced a quantitative restriction, with effect from 1 January 2014, on the number of cigarettes that may be brought into the State for personal use by individuals travelling from Bulgaria, Croatia, Hungary, Latvia, Lithuania and Romania.  The Excise Duty on Cigarettes (Quantitative Restrictions) Order 2013 (S.I. No. 553 of 2013) provides that the number of tax-paid cigarettes that may be brought into Ireland for personal use by individuals travelling from those Member States, without payment of further excise duty in Ireland, is restricted to 300.  Anyone with cigarettes in excess of that quantity must declare them to a Revenue Officer and pay the appropriate excise duty.  This restriction will remain in place until 31 December 2017 or until such time as the particular Member State has achieved the required EU minimum tax levels, whichever is the earlier.