The threat that fuel fraud and the illicit alcohol and tobacco trades pose to legitimate business, to consumers and the Exchequer is clear. I am satisfied that combatting such activity and criminality has been and continues to be a priority for Revenue.
Steps taken by Revenue to combat the illegal fuel trade include the introduction of stringent supply chain controls and reporting requirements, and a rigorous programme of enforcement action. In addition, Revenue and the UK Revenue and Customs undertook a joint initiative to introduce a new marker for use in marked fuels, from April 2015.
The industry view is that the action taken has been successful in curtailing fuel fraud. I am advised also that Revenue conducted random National Sampling Programmes in 2016 and 2017 to assess the extent of fuel laundering. The programmes each involved nearly one in ten of some 2,500 holders of auto fuel trader licences, and tests of diesel samples taken from the randomly selected traders found no evidence of the new marker in any of them. The results of this sampling are a clear indication that Revenue’s actions have resulted in the near elimination of the selling of laundered products at retail level. The 2018 sampling programme was expanded to include hauliers and other businesses in the transport sector. A very small number of samples from this programme tested positive, and another sampling programme will take place this year.
Illicit trade in alcohol can occur through the diversion of untaxed alcohol on to the market, through the production of counterfeit alcohol and through smuggling from countries with lower taxes. While there has been little evidence of large-scale illegal activity, as indicated by the low value of seizures in 2017 (€0.91million) when set against the overall value of the alcohol market (€6.1billion), I am assured that Revenue remains vigilant and takes appropriate action where illicit activity is detected. This action is informed by, inter alia, intelligence on criminal activity and risk-based examination of commercial traffic and stock in retail premises. Key results of this activity include the seizure of almost 200,000 litres of beer, believed to be associated with diversion fraud, since September 2017; the uncovering in November 2017 of a large-scale counterfeit vodka production plant processing highly dangerous denatured industrial alcohol and the detention in June 2018 at Dublin Port of a container carrying a quantity of raw alcohol with the capacity to produce over 50,000 litres of illicit alcohol. On 16 January 2019, officers at Dublin Port seized over 11,000 litres of alcohol with a retail value of over €403,000. The smuggled alcohol, which included over 10,200 litres of blended Scotch whiskey and 800 litres of alcopops, represents a potential loss to the exchequer of over €255,000.
Revenue acts against all aspects of the illegal tobacco trade, so that the illicit products involved can be seized and those responsible for smuggling or supplying them can be prosecuted. A combination of risk analysis, profiling and intelligence, and the risk-based screening of cargo, vehicles, baggage and postal packages is used to intercept illicit products. Action after importation includes checks at retail outlets, markets and private and commercial premises. This action has delivered considerable success, with the seizure in 2018 of almost 68 million cigarettes and approximately 1,900 kilograms of tobacco. In March 2018, a joint operation between Revenue and An Garda Síochána led to the closing down of a major illicit cigarette factory in Jenkinstown, County Louth. Over 20 million cigarettes and 70 tonnes of tobacco were seized at this facility, which could produce 250,000 illicit cigarettes an hour. At the end of October last, Revenue seized 7.2 million cigarettes that arrived into Dublin Port from Rotterdam. At the end of last November, Revenue seized over eight million smuggled cigarettes that arrived into Dublin Port from Rotterdam.
I know that Revenue and An Garda Síochána collaborate closely in acting against fuel, alcohol and tobacco crime, and also cooperate closely with their counterparts in Northern Ireland, in the framework of the North-South Joint Agency Taskforce. I am advised that this co-operation plays a key role in targeting the organised crime groups responsible for much of this criminality, who operate across jurisdictions.
I am satisfied that Revenue’s work against fuel fraud and the illicit alcohol and tobacco trades has delivered significant results. Revenue is, however, conscious of the resourcefulness of those involved in these forms of criminal activity and is vigilant for, and ready to respond to, any new developments in these areas. For my part, I will fully consider any additional proposals for legislative change or additional resources that may be brought forward by Revenue, which would enhance its capacity to deal effectively with fraud and criminality in these areas.