Dáil Éireann Debate, Wednesday - 12 July 2017
133. Deputy Stephen S. Donnelly asked the Minister for Finance the additional supports that will be required in the event of smuggling increasing as a result of tariff arbitrage in the event of hard Brexit; and if he will make a statement on the matter. [33296/17]
Amharc ar fhreagra134. Deputy Stephen S. Donnelly asked the Minister for Finance the expected increased burden on IT systems for customs entries as a result of the impact of Brexit; and if he will make a statement on the matter. [33297/17]
Amharc ar fhreagra135. Deputy Stephen S. Donnelly asked the Minister for Finance his plans to increase support for IT support for customs entries as a result of the impact of Brexit; and if he will make a statement on the matter. [33298/17]
Amharc ar fhreagra136. Deputy Stephen S. Donnelly asked the Minister for Finance if the Revenue Commissioners have undertaken a review of ports here in the context of Brexit; and if he will make a statement on the matter. [33300/17]
Amharc ar fhreagraI propose to take Questions Nos. 133 to 136, inclusive, together.
Like all Government agencies, Revenue is actively engaged in examining a range of scenarios in order to support Ireland's objective of maintaining the closest possible trading relationship between the UK and the EU/Ireland, post Brexit. The precise trading arrangements that will apply after Brexit will depend on the outcome of negotiations between the EU and UK. Consequently, while Revenue do not prejudge the outcome of the political negotiations, for practical reasons Revenue’s planning is based on the full range of possibilities, including the possibility that customs controls or processes will apply between Ireland and the UK.
Revenue has advised me that its officials are engaged in researching a range of contingencies primarily related to the movement of goods. It is clear that managing the volume of trade will be one of the biggest challenges post-Brexit.
At present, approximately 1.4million customs declarations are processed each year, representing import and export trade with non-EU countries. In addition, some 57,000 transit instances are processed. After Brexit, there is likely to be an increase in processing requirements, although estimation of demand is difficult and unreliable because of the likelihood of accompanying behavioural changes, and uncertainty about the exact arrangements that will be negotiated between UK and EU. Revenue is currently involved in procuring new computer software to implement customs systems required by the 2016 Union Customs Code which must become operational in stages between 2018 and 2022. Our EU colleagues are also engaged in redeveloping their systems to implement the Union Customs Code and to deal with additional volume that may arise after Brexit. The new systems will be scaled to accommodate maximum possible demand. The time required to complete new systems, and to allow software providers to adapt their business packages, may be such that they are not fully in place if customs with the UK is required in the short term, and contingencies are being explored to deal with that eventuality.
Revenue has a presence at the ports, airports, mail and parcel depots, and is in ongoing discussion with the relevant stakeholders, including on the implications of a much higher proportion of traffic requiring customs clearance.
The serious threat that smuggling poses to legitimate and compliant businesses, consumers and the Exchequer is recognised by Revenue. It is inherently difficult to predict levels of illegal activity, but targeting and disrupting all shadow economy activities, including smuggling, is always a priority. In 2016 there were a total of 16,658 individual seizures and 1,682 summary convictions for offences related to shadow economy activities. Additionally Revenue works closely with other Member States in order to combat illegal activity and in 2016 received over 1,500 requests for assistance from other Member States. In the same period Revenue received assistance from other Member States in relation to almost 700 cases.
As regards the island of Ireland, the Government’s position in relation to the Border with Northern Ireland in the context of Brexit is very clear. Continued freedom of movement, absence of an economic border, and protection of the Good Friday Agreement are key objectives for the Irish Government. The arrangements that will apply after Brexit will depend on the outcome of negotiations between the EU and UK. The Government is clear that any manifestation of an economic border would have very negative consequences. A key priority is to ensure the continued free flow of trade on the island and the need to avoid an economic border. Clearly in this regard the closer the trading relationship between the UK and EU is more generally the better. I would point out that the EU 27 guidelines for the Article 50 negotiation, specifically refer to the need to support and protect the achievements, benefits and commitments of the Peace Process. In this regard the guidelines recognise the unique circumstances on the island of Ireland, outlining the need for flexible and imaginative solutions, including with the aim of avoiding a hard border, while respecting the integrity of the Union legal order.
I am satisfied that Revenue's preparatory work in relation to Brexit is proceeding well. A first allocation of 40 extra staff has been provided to enable scenarios to be developed and explored in conjunction with stakeholders, and as more clarity emerges in the course of EU-UK negotiation, appropriate resources will be provided to ensure a full state of readiness.
