It is inherently difficult to estimate with confidence the extent of any illegal activity and it is not possible, therefore, to put a figure on the cost to the Exchequer of fuel laundering. Nevertheless, the serious threat that criminal activity of this kind poses to legitimate and compliant businesses, consumers and the Exchequer is recognised, and action against it has accordingly been a priority for Revenue over recent years.
Revenue has implemented a comprehensive strategy to tackle the illegal fuel trade, including the introduction of stringent new supply chain controls underpinning a rigorous programme of enforcement action and supported by a range of new legislative measures that I brought forward in Finance Acts. In addition, Revenue and HM Revenue and Customs in the United Kingdom undertook a joint initiative to find a new fiscal marker for use in marked fuels, which was introduced in Ireland and the United Kingdom from the beginning of April 2015.
I understand that the industry view is that the measures implemented to date have been successful in curtailing fuel laundering in Ireland. I am also advised that Revenue conducted a National Random Sampling Programme in January 2016, with a view to obtaining an updated picture of the extent of the fuel laundering problem. The programme involved selecting a random sample comprising nearly one in every ten of the 2,500 holders of Auto Fuel Trader Licences (any trader that produces, sells, deals in, or keeps for sale or delivery road diesel is legally obliged to hold such a licence). Road diesel samples were taken from all traders in the programme and tested for the presence of the new marker. No evidence of the new fiscal marker was found in any of the samples tested. The random sampling programme was repeated in January 2017 and again, no evidence of the fiscal marker was found. This provides very persuasive evidence that the strategy undertaken in recent years has been successful in addressing the laundering problem.
Revenue works closely with An Garda Síochána in acting against fuel fraud, and the relevant authorities in the State also work closely with their counterparts in Northern Ireland, through cross-border enforcement groups, to target the organised crime groups that are responsible for a large proportion of this criminal activity. This work is being supported and facilitated by the setting up in 2016, in the framework of "A Fresh Start: the Stormont Agreement and Implementation Plan", of a Joint Agency Task Force, which includes Revenue as well as An Garda Síochána and their Northern Ireland counterparts. Revenue also works in close cooperation with the relevant authorities in other jurisdictions, the European Anti-Fraud Office and other international bodies and agencies in the ongoing programmes of action at international level to combat the illicit fuel trade. Since 2014 there has been just one fuel laundry detection (in December 2016 in the Castleblayney area) and the level of detections of laundered fuel has decreased considerably. The most recent detection of laundered fuel occurred during March this year at a premises in Arklow where Revenue officers seized approximately 15,000 litres of laundered fuel and an oil tanker used to transport the illicit fuel. The new marker was a significant contributor to the detection and seizure.
The penalties for offences relating to fuel fraud are laid down in section 119 of the Finance Act 2001 and section 102 of the Finance Act 1999. On conviction following summary prosecution under these provisions, a court may impose a fine of €5,000, or a term of imprisonment not exceeding 12 months, or both. Where a person is convicted for an indictable offence, the court may impose a term of imprisonment not exceeding 5 years, or a fine not exceeding €126,970, or both. In addition, for an indictable offence under section 119 of the Finance Act 2001, if the value of the fuel concerned in the fraud exceeds €250,000, including duty and taxes, the court may impose a penalty of three times the value of the fuel, or a term of imprisonment not exceeding 5 years, or both. The current levels of fines were introduced by the Finance Act 2010 and represented significant increases over the previous amounts: for example, the fine on conviction for an indictable offence was increased from €12,695 to an amount not exceeding €126,970.
The Courts decide on the amount of the fine to be imposed in any particular case and, in practice, do not apply fines up to the existing limits. There are no proposals at present to increase the level of fines available to the courts. However, the position is kept under review taking account, among other considerations, of the practical experience of the fines imposed under the current provisions.
I am satisfied that Revenue's work against fuel laundering has achieved a considerable level of success, and I am assured that action against fuel fraud will continue to be a high priority.
