Dáil Éireann Debate, Wednesday - 1 February 2012
63 Deputy Regina Doherty asked the Minister for Finance the measures in place to tackle the illegal tobacco trade and its benefactors; his views on the success or failure of the measures; and if he will make a statement on the matter. [5712/12]
Amharc ar fhreagraI 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 strategy employed by Revenue to tackle this illicit trade is multi-faceted. It includes ongoing analysis of the nature and extent of the problem, developing and sharing intelligence on a national, EU and international basis, ongoing review of operational policies, development of analytics and detection technologies, and optimum deployment of resources at point of importation and inland, in order to intercept the contraband product and to prosecute those involved. Interception at the point of importation is achieved through a combination of risk analysis, profiling, intelligence, and the screening of cargo, vehicles, baggage and postal packages. Revenue enforcement officers also target this illicit trade at the post-importation level by carrying out intelligence-based operations and random checks at retail outlets, markets and private and commercial premises. Since mid- 2010, Revenue has conducted a series of nationwide intensive tobacco "blitz" type operations, which concentrated additional Revenue resources at ports, airports and at various inland retail points, including markets, for the purpose of identifying illicit tobacco products. To date, Revenue has conducted nine such national tobacco "blitz" operations resulting in the seizure of over 34.6 million cigarettes and 1,715 kg of tobacco. These intensive operations are of course additional to Revenue's ongoing day-to-day illicit tobacco operations.
Revenue also carries out regular multi-agency operations, particularly in relation to large maritime importations. Revenue both provides and receives intelligence from other Customs Administrations and works closely with the European Anti-Fraud Office, OLAF, in its efforts to tackle the illicit sale of tobacco at an international level. This international cooperation and sharing of intelligence and expertise plays an important role in combating illegal tobacco smuggling on a global basis.
In the course of 2011 Revenue enforcement officers seized 109 million cigarettes with a retail value of €46 million and 11,158 kg of tobacco with a retail value of €4 million. In addition Revenue secured one hundred and one court convictions for cigarette smuggling, with thirty custodial sentences, of which twenty were suspended, and fines of €136,300 imposed. Another fifty-seven convictions were secured for the sale of unstamped tobacco products with thirteen custodial sentences, of which seven were suspended, and fines of €115,850 imposed.
To date in 2012 Revenue enforcement officers have seized 1.5 million cigarettes with a retail value of €635,000 and 615 kg of tobacco with a retail value of €220,000. In addition Revenue secured four court convictions for cigarette smuggling, with one custodial sentence of fifteen months, one suspended sentence of three years and fines totalling €5,000 imposed in the other two cases. Another two convictions were secured for the sale of unstamped tobacco products with fines totalling €5,000 imposed.
The Revenue Commissioners have established a high level internal group, chaired at Commissioner level, to examine the risks related to tobacco products tax evasion and to oversee and optimise the detection of contraband and counterfeit tobacco products. This group has promoted a number of initiatives aimed at counteracting the illicit trade in tobacco. These include the adoption of a comprehensive tobacco strategy, which is underpinned by annual action plans. This 3-year (2011-2013) strategy, which is published on Revenue's website www.revenue.ie, includes a number of programmes, which are designed to complement each other in targeting the supply and demand sides of the market for contraband tobacco in Ireland.
Revenue's strategic level plans include the taking of steps to ensure that the legitimate trade remains compliant, delivering more effective and visible interventions through enhanced capability and better deployment of its resources, further development of cooperation and intelligence sharing at organisational, national and international level, a commitment to prosecute all serious cases of tobacco tax evasion and a focus, in partnership with other Government agencies, on reducing the demand for contraband tobacco.
I understand the Deputy's reference to benefactors to mean those groups that derive a benefit from the illegal tobacco trade. The individual activities that produce a profit from this criminal activity are many and varied. On the international front the bulk smuggling of tobacco products in maritime containers is carried out mostly by organised criminal elements, while smaller scale smuggling by individuals and "ant smugglers" takes place by air and passenger ferry from countries having a low rate of tobacco tax. Ant smuggling involves the organised and co-ordinated use of groups of air travellers to smuggle individual suitcase amounts of tobacco products. At the domestic level organised crime also plays a role in the distribution of smuggled tobacco product, together with a variety of groups and individuals involved in street level transport and sale at locations such as markets and housing estates.
I am advised that there is no internationally recognised method for precisely determining the level of the illicit trade in cigarettes and consequently no method will exactly reflect the impact of Revenue's ongoing compliance and enforcement strategy on the illicit tobacco trade. However, a survey commissioned by Revenue and the Office of Tobacco Control in 2009 estimated that 20% of cigarettes consumed in the State had not been taxed in this jurisdiction. The 20% figure was further broken down as 14% illegal product and 6% legally imported by passengers arriving into the State from other jurisdictions. Revenue and the Office of Tobacco Control commissioned a similar survey in the last quarter of 2010 and the results of this latest survey show a consistency with the 2009 figures i.e. 20% of all cigarettes consumed in the State were not taxed in the State with 14% again classified as illegal product and 6% classified as legal non-Irish duty paid product. A further survey is currently under way.
