Dáil Éireann Debate, Tuesday - 19 October 2010
222 Deputy Michael Noonan asked the Minister for Finance the seizures and prosecutions arising to date in 2010 from the Revenue Commissioners’ Operation Downstream; the way these figures compare with operation activities in 2008 and 2009; and if he will make a statement on the matter. [37724/10]
Amharc ar fhreagra223 Deputy Michael Noonan asked the Minister for Finance the position regarding the Revenue Commissioners’ analysis of the economics of tobacco here; the terms of reference, methodology, persons conducting and objectives of this study; the anticipated completion date; if it will be published; and if he will make a statement on the matter. [37725/10]
Amharc ar fhreagra224 Deputy Michael Noonan asked the Minister for Finance the number of persons who have telephoned Revenue’s cigarette smuggling hotline since its introduction; the number of these telephone calls which have directly led to cigarette seizures; and if he will make a statement on the matter. [37726/10]
Amharc ar fhreagra225 Deputy Michael Noonan asked the Minister for Finance his views on whether Ireland has the highest level of cigarette smuggling in all of the 27 EU countries; from the information which he has received both from secondary and primary sources, where, in his view, Ireland ranks compared to other EU countries and globally for cigarette smuggling proportionate to our population; and if he will make a statement on the matter. [37727/10]
Amharc ar fhreagraI propose to take Questions Nos. 222 to 225, inclusive, together.
I am informed by the Revenue Commissioners, who are responsible for the collection of tobacco products tax, and for tackling the illicit trade in cigarettes and tobacco products, that the figures for seizures and prosecutions arising from "Operation Downstream" from January 2008 to September 30th 2010 are as follows:
|
Year |
Number of detections |
Quantity of cigarettes seized |
Quantity of tobacco seized |
|
2008 |
128 |
6.44m |
Nil |
|
2009 |
284 |
9.74m |
Nil |
|
2010 (to 30th Sept) |
278 |
12.22m |
1,064 kgs |
|
Year |
Number of prosecutions |
Fines imposed |
Number of Custodial sentences |
|
€ |
|||
|
2008 |
4 |
7,000 |
1 |
|
2009 |
19 |
33,150 |
6 |
|
2010 (to 30th Sept) |
30 |
74,300 |
9 |
The Revenue Commissioners launched Operation Downstream in December 2007. It specifically targets the sale of illegal tobacco products at inland locations. As part of this ongoing operation, Revenue enforcement officers regularly conduct both intelligence-driven and random checks at shops, markets, and other points of retail sale, as well as private and commercial premises. The operation forms an important part of Revenue's strategy to tackle the problem of illicit trade in tobacco products.
As part of Operation Downstream, 95 seizures amounting to 2.04m cigarettes and 195kgs tobacco were made at inland locations in the course of a specific two-week national tobacco operation, which took place in July 2010.
In relation to Revenue's illegal cigarettes hotline, I am advised that 121 calls have been received to date since its introduction in July 2010. A total of 8 calls have contributed directly or indirectly to seizures of illicit cigarettes, and enquiries are ongoing in a number of other cases.
With regard to comparisons between the levels of smuggling in Ireland and other EU states, I am informed that there is no internationally recognised method for precisely determining the levels of tobacco smuggling in any one country. However, on the basis of a 2009 survey carried out independently on behalf of the Revenue Commissioners and the Office of Tobacco Control, Revenue estimates that approximately 20% of cigarettes consumed in the State had not been taxed in this jurisdiction. Revenue would further tentatively estimate that this figure of 20% comprises 14% illicit product and 6% legal cross-border purchases.
I am advised by the Revenue Commissioners that as part of its obligations under a legally binding tobacco agreement signed with the European Anti Fraud Office (OLAF) and the Member States a report estimating the size of the illicit tobacco trade has been commissioned by a major international cigarette manufacturer annually since 2007. This report has not been published nor has it been made available to Member States. Each Member State is given information relating only to itself, and on a strictly confidential basis.
Any analysis of illicit tobacco movements must take account of a variety of factors including population, geographical location, size of the illicit market, level of taxation, price in neighbouring jurisdictions etc. A significant factor is whether or not the country is a source, transit or destination country. Ireland is considered to be both a transit and a destination country. For example, the brands seized under "Operation Samhna", where more than 120 million cigarettes were seized in October 2009, would indicate that this shipment was not intended for the Irish market.
I am also informed by the Revenue Commissioners that the European Anti Fraud Office (OLAF) has a special unit entitled OLAF Task Group Cigarettes, which co-ordinates both international operations and other countermeasures undertaken by the authorities of the Member States against cigarette smuggling. OLAF also maintains a database of cigarette seizures reported by the authorities of the Member States. In this regard, the number of cigarettes seized by Ireland in 2009 was 9th in the table of seizures. Comparative data published by the World Customs Organisation in relation only to very large seizures, shows Ireland as the 6th and 13th highest respectively out of 18 countries in Western Europe for the quantities of cigarettes seized and the numbers of seizures.
I am satisfied that overall Ireland performs very well in relation to cigarette seizures. However, given that Ireland is a transit country for tobacco smugglers, simple extrapolation from the volume of seizures of tobacco products to estimate the scale of the illicit tobacco trade in the domestic market is, in my view, not valid.
The problem of tobacco smuggling is a global one and requires a very high level of international co-operation. In this regard Revenue's Customs Service works very closely with enforcement agencies throughout the E.U. and with OLAF. This high level of co-operation has resulted in many successful detections of illicit products and in the prosecution of those responsible.
It was my privilege last month to open an international conference in Dublin co-hosted by Revenue Commissioners and OLAF on the illicit tobacco trade. The conference, which was the first of its kind, brought investigators and prosecutors from all 27 Member States together with their counterparts from law enforcement agencies from across the U.S.A.
In relation to the economics of tobacco research project, this is being conducted by economists in Revenue's Research and Analytics Branch. The research is an econometric analysis of the price elasticity of demand for taxed cigarettes in Ireland based on time series data. The econometric model measures the sensitivity of cigarette demand to a variety of economic and social factors. The current research findings are in draft form and are being considered by the Department of Finance and the Tax Strategy Group in the context of the Budget. I am advised that the Revenue Commissioners intend to publish the research in due course.
In recent years, Revenue has signed Memoranda of Understanding with two of the main cigarette manufacturers, ITL and JTI, to further co-operation in relation to the illicit tobacco trade. In addition, Revenue meets regularly with the trade association representing the leading tobacco companies as well as the four major global manufacturers.
