Thursday, 26 September 2019

Questions (8)

Brendan Smith


8. Deputy Brendan Smith asked the Minister for Finance the additional measures he plans to introduce to counteract cross-Border smuggling and illicit trade in tobacco, drink and fuel products; and if he will make a statement on the matter. [39042/19]

View answer

Oral answers (7 contributions) (Question to Finance)

Permission has been given to Deputy Breathnach to take Deputy Brendan Smith's question.

I speak in the absence of Deputy Brendan Smith, but I am reflecting the view of all Border Deputies. What additional resources does the Minister plan to introduce to counteract cross-Border smuggling and illicit trade, especially in tobacco, drink and fuel products? Will he make a statement on the matter?

Revenue has assured me that it has implemented a comprehensive risk-based intervention programme to identify, target and disrupt all forms of cross-Border smuggling and criminality. Revenue’s focus on such activity will continue regardless of the outcome of Brexit. I am satisfied that its focus on cross-Border smuggling is appropriate and well targeted. I know that Revenue keeps such matters under active review and is committed to quickly confronting any new risks as they emerge.

The threat that smuggling and the illicit trade in tobacco, drink and fuel products pose to legitimate business, consumers and the Exchequer is clear and I am assured by Revenue that combatting such criminality continues to be its highest priority. Steps it has taken, of which I am sure the Deputy will be aware, include the introduction of stringent supply chain controls and reporting requirements, and a rigorous programme of enforcement action. In addition, Revenue and Her Majesty's Revenue and Customs undertook a joint initiative to introduce a new marker for use in marked fuels, which came into operation from April 2015. Revenue has also conducted random national sampling programmes in the years 2016 to 2019 to assess the extent of fuel laundering. The industry view is that the actions taken have been successful in curtailing fuel fraud and the results of Revenue’s sampling programmes continue to support such a view.

The Revenue Commissioners act against all aspects of the illegal tobacco trade and use a combination of risk analysis, profiling and intelligence and the screening of cargo, vehicles, baggage and postal packages to intercept illicit products. Action after importation includes checks at retail outlets, markets and private and commercial premises.

I thank the Minister for his response. I want to make a number of suggestions that he might consider. I commend the work of the Revenue Commissioners and the Customs service. I commend the resilience of Border traders who have struggled during the years owing to volatility which is much greater in the context of Brexit. I would like the Minister to consider providing extra staff and for an amendment to the Finance Act 2001 to include members of An Garda Síochána in the definition of the term "officer", giving them the same search warrant rights as officers of the Revenue Commissioners. This is badly needed.

I wish to raise the issues of carbon taxes and minimum alcohol pricing, about which I spoke to the Minister at a meeting of the Committee on Budgetary Oversight. Minimum alcohol pricing which is due to be introduced will have a serious impact. Smokeless coal from the North will also have an impact and cause more problems for the health of people living in the region.

The effects of minimum alcohol pricing on the movement of goods and decisions to shop across the Border are well understood by me. I absolutely take the Deputy's point that if there is to be a change in the price of a product that is so inherently mobile and valuable, we need to take great care in assessing its impact on the retail trade in this country.

I will certainly take the Deputy's suggestions on board. I always do my best to respond favourably to any request to me from the Revenue Commissioners in looking for additional resources or support. Let me give the Deputy a sense of the scale of current activity. For example, on 16 January, officers at Dublin Port seized over 11,000 l of alcohol. The smuggled alcohol included over 10,000 l of blended Scotch whiskey and over 800 l of alcopops. The effect of the sale and distribution of these products on decent, law-abiding retailers is really clear and serious. The Deputy will be aware that, as recently as last November, Revenue officers seized 8 million cigarettes at Dublin Port.

We must be cognisant that it is not just a question of illicit trade; ultimately, people along the Border and beyond seek a bargain. They cannot be blamed for this, but the problem is that, when they seek to buy the cheaper products, they will also do their weekly shopping, which further affects revenue streams in the South. I have an illicit trade Bill that is being promoted by Retailers Against Smuggling. The Minister might consider introducing it as part of further measures, particularly in the context of Brexit. I have said and continue to say that unless there is physical alignment of taxes and VAT in the North and the South, issues will arise. I do not believe it will happen. It is difficult enough to achieve regulatory alignment, but without fiscal alignment, we will continue to see a major leakage of trade. I am reflecting the view of most Border Deputies in saying this is of serious concern, particularly to smaller retailers whose businesses will be greatly affected.

I remember the work the Deputy did in proposing the Private Members' legislation to deal with the issue for Border communities and communities beyond. At the time I had a concern that the Bill, as drafted, would not have the effect the Deputy desired and felt the powers available to the Revenue Commissioners were what were needed and proportionate. However, I entirely agree with the Deputy that this issue has a really big effect on those working in legitimate, law-abiding employments, particularly in the Border counties. I will be well aware of the issue in making any possible decision on minimum alcohol pricing. It is not so long ago that the amount of cross-Border shopping was having a serious effect on the national finances. Thankfully, we have avoided some of it to date. I am aware, however, of the possible effect of further movement in the value of sterling. If it is exacerbated by the illegal activity to which the Deputy referred, we must consider ways in which to respond. I offer the support the Revenue Commissioners sought and will continue to consider whether there are new ideas or new things we need to do.