Dáil Éireann Debate, Tuesday - 18 September 2012
195. Deputy Michael Healy-Rae asked the Minister for Finance in view of the statistics and figures regarding the usage of illegal road diesel, the measures he intends introducing to stamp out this illegal activity which is costing the Exchequer hundreds of millions in lost revenue every year; and if he will make a statement on the matter. [37981/12]
Amharc ar fhreagra350. Deputy Brendan Smith asked the Minister for Finance the proposals that he has to implement further measures to deal with diesel laundering and the resulting revenue loss to the Exchequer; and if he will make a statement on the matter. [39349/12]
Amharc ar fhreagraI propose to take Questions Nos. 195 and 350 together.
I am informed by the Revenue Commissioners, who have responsibility for mineral oil tax, that tackling the illicit trade in laundered diesel is a priority for them. Revenue has responded very aggressively to the threat posed to the exchequer and to legitimate business by this criminal activity and has a comprehensive action plan in place to tackle the problem. The key elements of the Revenue strategy are: more effective monitoring and control of the mineral oil distribution chain; robust and sustained enforcement action; and cooperation with Her Majesty’s Revenue and Customs (HMRC) in the UK.
A number of legislative provisions have been made, in this year’s Finance Act and in Revenue Commissioners’ Regulations, to underpin and support Revenue’s monitoring and control of the fuel supply chain, to make it more difficult for launderers to source marked fuel for laundering and to supply laundered fuel to retail outlets. The existing requirement for traders, who sell, deliver or deal in any other way with road fuels, to be licensed by Revenue is extended by the Finance Act, from 1 October this year, to traders who deal with marked diesel and marked kerosene. Road fuel and marked fuel may only be delivered from a premises or place for which the appropriate licence is in force or, in the case of cross-border deliveries, under the appropriate intra-EU procedures.
All licences are subject to conditions set by Revenue relating to the security and suitability of the premises or place concerned. A licence must be refused where an applicant cannot satisfy Revenue that those conditions can be met, does not hold a tax clearance certificate, or has, in the previous ten years, been guilty of an indictable tax offence. A licence may be revoked for failure to satisfy the specified conditions, on conviction for an indictable tax offence, or for any breach of excise law in relation to dealings with mineral oil.
The Mineral Oil Tax Regulations 2012 support and complement these Finance Bill provisions by setting down detailed procedures for deliveries of mineral oil, and for the keeping of records relating to those deliveries, and all mineral oil at the licensed premises or place. All deliveries must be carried out under a delivery document procedure, with copies to be held by that consignor, the consignee, and the person in charge of the delivery vehicle. There is a simplified procedure for small-scale deliveries to private individuals. A requirement is also introduced for a monthly electronic return to be made by mineral oil traders, setting out the details of their dealings in mineral oil. These new control requirements will come into operation on 1 January 2013, when the necessary systems and administrative arrangements, for the fuel traders and Revenue, are in place. The new Regulations also clarify the requirements for the records to be kept by the trader and made available to Revenue. The information from these delivery documents, returns and other records will provide Revenue with information essential to checks and audits at all points in the fuel supply chain, and the identification of suspect deliveries and anomalous transactions.
Revenue is committed to applying more of its compliance resources to combating the illicit trade in mineral oil, and continues to apply a broad range of compliance and enforcement strategies to detect and counteract illegal practices involving mineral oils. These include ongoing analysis of the nature and extent of the problem, development and sharing of intelligence with agencies on both sides of the border; the conduct of intelligence driven operations using covert surveillance to identify oil laundry locations; seizure of illicit product, laundering equipment and vehicles; physical sampling at road checkpoints; closure of unlicensed or improperly licensed outlets and seizure of stock, and prosecution of those involved in illegal activities in relation to mineral oils.
In 2011 nine oil laundries and 327,000 litres of laundered fuel were seized, together with nine oil tankers and twenty-nine other vehicles. Sixteen persons were arrested in the course of these operations and files have been sent to the DPP, who has to date issued directions to prosecute on indictment in respect of five of these cases and on summary disposal in a further case. In addition, over 718,000 litres of illicit fuel has been seized, the bulk of it at, or in the course of delivery to, retail outlets. To date in 2012 six oil laundries and 135,050 litres of fuel has been seized together with one oil tanker and nine other vehicles. Two people were arrested in the course of these operations. In addition to this over 548,000 litres of illicit mineral oil has been seized, the bulk of it at, or in the course of delivery to retail outlets. There have been two court convictions for laundered oil offences with a fine of €2,500 imposed in one case and a two-year suspended sentence in the other.
Revenue is also engaged in an ongoing and vigorous campaign targeting specific locations nationwide, with the intention of immediate closure of unlicensed outlets and challenging of instances of non-compliance. In 2011 thirty-two filling stations were shut down by Revenue because they did not have a licence or were in breach of licensing conditions. To date in 2012, twenty-seven such outlets have been closed.
Revenue enforcement is carried on in close cooperation with HM Revenue and Customs (HMRC) by sharing intelligence and identifying and investigating the criminals involved in fuel fraud. In addition, Revenue and HMRC have been working in partnership to identify a new fuel marker that will be more resistant to fuel laundering, and a Memorandum of Understanding has been signed between the two authorities. A joint invitation for proposals was published in June and a joint information seminar was held for potential applicants on 24 July. Both authorities are committed to seeking the widest possible range of proposals, so that the most effective marker for the future can be identified.
