Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

The Revenue Commissioners inform me that they are acutely aware of the threat posed by fuel laundering to remove the marker added to rebated fuel for off-road use. Fuel laundering to remove the marker from rebated fuel has been a persistent problem during the years. However, it remained a marginal activity because the sulphur content of marked fuel was higher than that of road fuel. Accordingly, the sulphur content continued to distinguish laundered fuel from genuine road fuel. Environmental standards for the sulphur content of fuel changed from the beginning of 2011 which resulted in marked fuel with the same sulphur content as road fuel coming onto the market. With this change, fuel laundering became more viable and criminal gangs intensified their laundering and distribution activities dramatically from the first half of 2011.

Revenue collects some €1.1 billion annually in excise duty on road diesel. Therefore, the potential for loss of tax revenue from this fraud is significant. This type of criminality also undermines the competitiveness of legitimate businesses, damages the environment, can damage consumers' vehicles and sustains organised criminal gangs which are the prime movers in this illegality.

Recognising the threat this illegal activity poses to the Exchequer and legitimate business, the Revenue Commissioners have made action against illegal fuel-related activities one of their top corporate priorities, adopting a comprehensive strategy to tackle the problem with several elements. The licensing regime for auto fuel traders was strengthened with effect from September 2011 to limit the ability of the fuel criminals to get laundered fuel onto the market. A new licensing regime was introduced for marked fuel traders in October 2012, which is designed to limit the ability of criminals to source marked fuel for laundering. New supply chain controls were introduced from January 2013 that required all licensed fuel traders to make monthly electronic returns to Revenue of their fuel transactions. The first returns were received by Revenue in February. It is using the data to identify suspicious activity and is investigating several traders.

Enforcement action, involving close co-operation with other law enforcement agencies on both sides of the Border, has been intensified with the aim of closing down fuel laundries and dismantling criminal networks involved in the activity. Revenue and HM Revenue and Customs are co-operating closely to ensure both agencies pursue an effective and joined-up approach to tackling the problem. In particular, Revenue and HM Revenue and Customs are working together to identify a more effective marker for use in both jurisdictions. A joint invitation to make submissions process is close to conclusion and a decision on the new marker is expected shortly.

Revenue regularly reminds motorists and the public generally that, in addition to its impact on the Exchequer and legitimate trade, they should be aware of the risks posed to their vehicles by using laundered fuel, as well as the fact that sourcing fuel in this way is funding criminal activity. Retailers who suspect or have evidence that laundered diesel is being sold in their area can help by reporting their suspicions to Revenue either directly or through their representative associations. Such reports are treated as confidential and fully investigated by Revenue.

Revenue's enforcement strategy in the fuel sector continues to yield results. In the past two years 107 filling stations across the State were closed for breaches of licensing conditions. Including the most recent detection in Waterford, over 2.9 million litres of fuel have been seized and 28 oil laundries closed down since 2011, including eight oil laundries to date in 2013.

The illegal laundry detected in Waterford had the capacity to launder approximately 10 million litres of fuel per annum, with a potential loss to the Exchequer of approximately €5 million per annum. A number of large tanks and ancillary equipment were seized and the laundering plant was dismantled. Investigations into the laundry operation are continuing.

I am satisfied that the strategy being implemented by Revenue is proving successful. Legitimate traders have welcomed the new supply chain controls and provided anecdotal evidence of reduced competition from rogue traders and reduced availability of laundered fuel. Consumption of auto diesel has increased by some 5% in the 12 month period to October 2013, in comparison to previous years when consumption was largely unchanged. I strongly support the current strategy being implemented by Revenue and I am confident that it will succeed with the co-operation and support of the legitimate trade. I am informed by the Revenue Commissioners that the industry has worked very closely with them in developing and implementing their strategy. We are grateful to Revenue, the Customs service and the Garda Síochána for their ongoing work in this area.

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