Seán Sherlock (Cork East, Labour)
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Question 88: To ask the Tánaiste and Minister for Finance if he will propose measures, particularly but not exclusively focusing on smaller and regional airports, to clamp down on the evasion of VAT and excise duties on alcohol and cigarettes through the smuggling of these goods; and if he will make a statement on the matter. [2329/08]

Brian Cowen (Laois-Offaly, Fianna Fail)
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Persons arriving in Ireland from another country may be liable to pay duties and tax on goods purchased abroad. The amount, if any, of duty and tax to be paid depends on whether:

The goods were purchased in an EU Member State or in a country outside the EU — a third country.

The goods are for personal or commercial use.

In the case of alcohol and tobacco products, Revenue have set indicative quantities of these products which, if not exceeded, will be regarded as for personal use, provided there is no indication or suspicion of commerciality. If these quantities are exceeded, the passenger must prove that the goods are for personal use.

There are separate limits on the amount of tobacco products that can be brought into Ireland for personal use which have been purchased in certain EU countries. Accordingly, it is important to note that depending on the circumstances, substantial quantities of alcohol and cigarettes may be brought into Ireland completely legally and without incurring any tax or duty liability.

Goods imported for commercial purposes are liable to customs duty (if imported from outside the EU), excise duty (depending on the type of goods) and VAT.

In this context, I am advised by the Revenue Commissioners (who are responsible for Customs controls at all airports in the State, including the smaller regional airports) that checks are carried out on the basis of the risks involved; and that the risk criteria are subject to continuous review. There are 14 airports in the State licensed by the Irish Aviation Authority for public use, including Dublin, Cork and Shannon airports.

Techniques and methodologies used by Customs in combating smuggling reflect international best practice by maximising the use of intelligence and risk profiling in order to target resources on areas of most risk. Equipment and resources used, including x-ray scanning and detector dogs, form part of the overall strategy. In addition, cognisance is taken of the latest international smuggling trends, patterns and methods; and individual routes are regularly risk tested. Flights with origins and destinations carrying a high-risk rating attract particular attention. It is important to note that the vast majority of air traffic to the smaller airports is intra-Community.

A full-time, year-round presence is maintained at Dublin airport on account of its volume of air traffic and passengers, while at Cork and Shannon, there is a reduced presence based on times of flights. Checks and attendance at other smaller airports are based on flight patterns and volume and mobile enforcement officers carry out controls there.

Smuggling of alcohol by air has not been identified as a significant risk for a number of reasons, including weight and the security restrictions on carrying liquids. However, the potential for smuggling tobacco products constitutes a considerable revenue threat, in particular cigarettes sourced in some of the new accession states of the European Union, where excise duty rates are particularly low. The threat posed to the Exchequer from organised cigarette smuggling from these States is significant and resources are specifically targeted at this area.

The enforcement environment for Customs has been largely shaped by the introduction of the Internal Market and the principles of freedom of movement. Of specific relevance are the abolition of random checks on intra-Community goods and passengers. Intervention in the movement of Intra-Community traffic requires a reasonable suspicion that restricted or prohibited goods are being carried; and this places increased enforcement emphasis and reliance on already proven intelligence and profiling techniques.

The Revenue Commissioners advise me that, while the effectiveness of their anti-smuggling controls is subject to ongoing evaluation and review, they are satisfied that the existing individual risk assessment and deployment of personnel and resources at the State's airports constitute an effective deterrent to the smuggling of fiscal and prohibited goods.