I will address the aspects of the Deputy's question that relate to diesel laundering, cross border cooperation between State agencies and fuel markers.
The Revenue Commissioners, who are responsible for combating fuel fraud, advise me that they have prioritised the problem of diesel laundering and have implemented 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, and
- 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.
In addition to the measures implemented to date, Revenue and Her Majesty's Revenue and Customs in the UK completed an Invitation to Make Submissions process to identify a more effective fuel marker and it is expected that a new marker will be introduced in both jurisdictions early in 2015, following consultation with the oil industry and other stakeholders.
To support further the integrity of the distribution system and minimise the risk of fraud, 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 at the standard rate of tax. This new provision will strengthen Revenue's hand in dealing with those traders supplying rebated fuel recklessly to dubious customers and will provide a further disincentive to such activity. Revenue has published guidelines for mineral oil traders which will assist them in identifying and avoiding such transactions.
Revenue works very closely with fuel sector representative bodies in tackling the problem and these bodies have been very supportive of the measures introduced to combat fuel laundering. Revenue chairs the Hidden Economy Monitoring Group 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.
I am advised also that the Revenue Commissioners work in close cooperation with other enforcement authorities, in this jurisdiction and in Northern Ireland, in combating this all-island problem. The Cross Border Fuel Fraud Enforcement Group, which includes representatives of the Revenue Commissioners, An Garda Síochána, Her Majesty's Revenue and Customs and the Police Service of Northern Ireland and other relevant organisations, was established to facilitate this cooperation, and has proven effective in supporting the identification and targeting of the organised crime gangs, many of whom have links to paramilitaries and former paramilitaries, that are responsible for the bulk of fuel fraud. All enforcement authorities engaged in combatting fuel fraud are committed to working closely together on an ongoing basis in this important work. Revenue's enforcement strategy in the fuel sector has already yielded significant results. Since the beginning of 2011, over 3 million litres of fuel have been seized and 29 oil laundries detected and closed down, including 9 oil laundries in 2013. In addition, over 130 filling stations have been closed in that period. In the past 18 months Revenue has secured 6 convictions for mineral oil offences and a further 16 prosecution cases are underway.
The evidence available to Revenue, in terms of feedback from the legitimate trade and increased consumption of road diesel, indicates that the strategy has been effective. The legitimate trade indicates that the incidence of laundered diesel on the market has dropped significantly and that they have experienced an increase in road diesel sales. This is supported by tax data which shows road diesel consumption has increased significantly over the past couple of years.
