Dáil Éireann Debate, Thursday - 5 February 2015
100. Deputy Gerry Adams asked the Minister for Finance his plans for introducing new legislation to end the differential between agricultural and non-agricultural diesel as the most effective means of closing down the criminal gangs involved in fuel laundering. [5423/15]
View answer101. Deputy Gerry Adams asked the Minister for Finance the number of fuel laundering plants uncovered in the past five years, by county and by year. [5424/15]
View answer102. Deputy Gerry Adams asked the Minister for Finance the estimated capacity of each fuel laundering plant uncovered in the past five years; and the total estimated capacity of all fuel laundering plants per annum for the past five years. [5425/15]
View answer103. Deputy Gerry Adams asked the Minister for Finance the estimated loss to the Exchequer per annum of the fuel laundering plants uncovered. [5426/15]
View answer104. Deputy Gerry Adams asked the Minister for Finance the estimated loss to the Exchequer of the supply of illegal fuel per annum for the past five years. [5427/15]
View answer105. Deputy Gerry Adams asked the Minister for Finance if he will provide details of a new product produced to identify illegal rebated fuel. [5434/15]
View answer106. Deputy Gerry Adams asked the Minister for Finance the position regarding co-operation between the PSNI and An Garda Síochána and the Revenue agencies on the island of Ireland; if he is satisfied at the level of co-operation; and his plans to increase co-operation. [5435/15]
View answer107. Deputy Gerry Adams asked the Minister for Finance the number of filling stations closed by the Revenue Commissioners for breaches of licensing conditions each year and for the past five years. [5436/15]
View answer108. Deputy Gerry Adams asked the Minister for Finance the number of filling stations closed by the Revenue Commissioners for breaches of the licensing conditions by county. [5437/15]
View answer109. Deputy Gerry Adams asked the Minister for Finance his plans to introduce new legislation to strengthen the penalties available to the courts against those involved in the illegal fuel laundering trade. [5454/15]
View answerI propose to take Questions Nos. 100 to 109, inclusive, together.
I am advised by the Revenue Commissioners that the number of oil laundries detected and closed down in the period from 2010 to 2014 was 35. Details of those detections, by year and by the counties in which they occurred, are set out in the following table.
|
Year |
Cavan |
Donegal |
Dublin |
Laois |
Louth |
Meath |
Monaghan |
Offaly |
Waterford |
Totals |
|
2010 |
0 |
0 |
0 |
1 |
0 |
0 |
2 |
1 |
0 |
4 |
|
2011 |
0 |
1 |
0 |
0 |
1 |
1 |
6 |
0 |
0 |
9 |
|
2012 |
1 |
0 |
0 |
0 |
7 |
0 |
3 |
0 |
0 |
11 |
|
2013 |
0 |
0 |
1 |
0 |
2 |
1 |
4 |
0 |
1 |
9 |
|
2014 |
0 |
0 |
0 |
0 |
1 |
0 |
1 |
0 |
0 |
2 |
|
Totals |
1 |
1 |
1 |
1 |
11 |
2 |
16 |
1 |
1 |
35 |
The Deputy will appreciate that it is inherently difficult to estimate the scale of any illegal activity, the capacity of fuel laundries and the impact of the criminal activity on the Exchequer. The Revenue Commissioners advise me that, while there is no reliable estimate of the extent of illegal activity in the fuel sector, they recognise that fuel fraud, including the laundering of markers from rebated fuel, is a significant threat to Exchequer revenues. Action against this illegal activity continues, therefore, to be a priority for Revenue, which is implementing a comprehensive strategy to tackle the problem. Key elements of this strategy include the following:
- The licensing regime for auto fuel traders was strengthened with effect from September 2011 to limit the ability of fuel criminals to place laundered fuel on the market.
- A new licensing regime was introduced for marked fuel traders in October 2012, 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 that data would be available to support 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. These data are being used to identify suspicious or anomalous transactions and patterns of distribution that will support follow-up enforcement action where necessary.
Following a joint process, Revenue and HM Revenue & Customs in the UK have identified a new and more effective product to mark rebated fuels. The marker will be produced by Dow Chemical Company and will be introduced in the State and in the UK from the end of March 2015, providing a significant boost in the fight against illegal fuel laundering in both jurisdictions.
In addition, I have introduced a range of legislative measures in recent years to support Revenue's work in combatting fuel fraud, including reckless trading provisions that ensure a mineral oil trader is liable for the mineral oil tax evaded where that trader knew, or was reckless as to whether or not, in making the supply or delivery, he or she was participating in a transaction or series of transactions connected to the evasion of Mineral Oil Tax. In the Finance Act 2014, I introduced measures to further strengthen Revenue's ability to refuse or revoke a mineral oil trader's licence where the trader does not comply with excise law, does not maintain adequate stock management systems and records, or provides false or misleading information.
I am advised also that the Revenue Commissioners co-operate closely with other enforcement authorities, in this jurisdiction and in Northern Ireland, in combatting the all-island problem of fuel fraud. The Cross Border Fuel Fraud Enforcement Group, which includes representatives of the Revenue Commissioners, An Garda Síochána, Her Majesty's Revenue and Customs, the Police Service of Northern Ireland and other relevant organisations, was established to facilitate this co-operation. I am assured that it has proven effective in supporting the identification and targeting of the organised crime gangs, many with links to paramilitaries and former paramilitaries, that are responsible for the bulk of fuel fraud. All of the enforcement authorities engaged in tackling fuel fraud and those responsible for it are committed to working closely together on an ongoing basis in this important work.
Revenue's strategy has already yielded significant results. Since mid-2011, 134 filling stations were closed for breaches of licensing conditions, over three million litres of fuel have been seized and 31 oil laundries were detected and closed down. Industry sources indicate a much-reduced incidence of laundered fuel on the market and increased road diesel consumption and tax revenues are up 13% compared with a couple of years ago. Obviously, other economic factors have contributed to this growth but reduced fraud is an important factor.
Details of closures, by county, for those years are set out in the following table.
|
Region |
County |
2012 |
2013 |
2014 |
|
Dublin |
Dublin |
8 |
3 |
1 |
|
Border Midlands West |
Cavan |
2 |
0 |
1 |
|
- |
Donegal |
5 |
2 |
0 |
|
- |
Galway |
3 |
0 |
1 |
|
- |
Longford |
2 |
0 |
0 |
|
- |
Louth |
13 |
3 |
3 |
|
- |
Mayo |
2 |
1 |
0 |
|
- |
Monaghan |
0 |
2 |
0 |
|
- |
Roscommon |
3 |
0 |
0 |
|
- |
Sligo |
1 |
1 |
0 |
|
- |
Westmeath |
2 |
0 |
0 |
|
East South East |
Kildare |
3 |
4 |
1 |
|
- |
Kilkenny |
2 |
1 |
1 |
|
- |
Laois |
1 |
0 |
2 |
|
- |
Meath |
2 |
9 |
0 |
|
- |
Tipperary |
1 |
0 |
1 |
|
- |
Waterford |
0 |
3 |
1 |
|
- |
Wexford |
0 |
0 |
3 |
|
South West |
Cork |
4 |
1 |
0 |
|
- |
Limerick |
3 |
0 |
0 |
|
TOTAL |
- |
57 |
30 |
15 |
The County breakdown for 2011 is not readily available.
It has been suggested on a number of occasions that the current system of marking lower taxed fuels should be replaced by one based on repayments to the users. However, a change of this nature would impact on a wide range of users, would be costly to implement and would, itself, be at risk from fraud. Marked gas oil has a wide variety of uses, including the propulsion of trains, in agricultural, construction and industrial machinery, for commercial sea-navigation (including fishing) and commercial and home heating purposes. A change to a rebate system would involve the establishment of an expensive and wide-ranging repayments system and would place a new administrative burden on oil traders, on the large number of users and the Revenue Commissioners. It would also impose significant cash-flow costs on those currently using marked gas oil.
Repayment schemes are vulnerable to abuse and the introduction of a wide-ranging repayment scheme would not offer greater security against fraud than the current arrangements. Fuel in respect of which a repayment of duty was made could be easily diverted to on-road use.
For these reasons, and in light of the progress made by Revenue in tackling the problem, I am satisfied that the strategy being implemented by Revenue is the best course of action. I am also confident that the introduction of the new marker here and in the United Kingdom from the end of March will reinforce the measures already implemented.
The penalties for offences relating to fuel smuggling and laundering are laid down in section 119 of the Finance Act 2001 and section 102 of the Finance Act 1999. On conviction following summary prosecution under these provisions, a court may impose a fine of €5,000, or a term of imprisonment not exceeding 12 months, or both. Where a person is convicted for an indictable offence, the court may impose a term of imprisonment not exceeding 5 years, or a fine not exceeding €126,970, or both. In addition, where a person who is licensed to retail hydrocarbon oils is convicted of the offence of dealing in illicit fuel, a court may make an order for a temporary prohibition of trade. This order prevents the person convicted from selling or supplying any mineral oil for a period of up to 7 days for a first offence and up to 30 days for a second or subsequent offence.
The fines that may be imposed on conviction were increased in the Finance Act 2010 to an amount significantly higher than that which had applied previously. For example, the fine on conviction for an indictable offence was increased from €12,695 to an amount not exceeding €126,970.
The Courts decide on the level of fine to be applied in any particular case and, in practice, they do not apply fines up to the existing limits. I have no plans at present to increase the penalties available to the Courts. However, the position is kept under review, taking account, among other considerations, of the practical experience of the application of penalties under the current provisions.
