Tommy Broughan (Dublin North East, Labour)
Link to this: Individually | In context

Question 146: To ask the Minister for Finance the initiatives being undertaken to address the problem of millions of euro worth of cigarettes being smuggled through ports in Ireland; and if he will make a statement on the matter. [28582/09]

Tommy Broughan (Dublin North East, Labour)
Link to this: Individually | In context

Question 165: To ask the Minister for Finance if up to 25% of cigarettes smoked in Ireland have been imported and sold illegally; if the illegal sale of cigarettes is costing retailers here approximately €496 million in lost sales turnover; if the forecasted loss to the Exchequer in 2010 for the illegal importation and sale of cigarettes is set to reach €528 million; if he will report on the illegal importation of cigarettes from the USA; his views on the allegation that a certain percentage of cigarettes are produced in the US for illegal sale abroad; the efforts being taken to address this problem; and if he will make a statement on the matter. [28581/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

I propose taking Parliamentary Questions Nos. 146 and 164 together.

I am informed by the Revenue Commissioners that they are not in a position to confirm the Deputy's various estimates of tax loss from cigarette smuggling or to attempt to forecast the tax loss on cigarettes in 2010, as there is no reliable method for determining such figures. However, a tentative estimate was given by Revenue earlier this year that about 20% of cigarettes consumed in Ireland may be untaxed, but it is important to emphasise that this includes both legitimate cross- border purchases for personal consumption and contraband and counterfeit cigarettes. Cigarette clearances on payment of tax for the first five months of 2009 are broadly in line with the same period in 2008.

As regards the illegal importation of cigarettes from the USA, I am informed that this illicit traffic was detected by Revenue some years ago and these detections resulted in the European Anti-Fraud Office, (OLAF), opening an international investigation that involved several Member States and the US Authorities. This investigation has culminated in the arrest of a US national who is due to go on trial in Florida on 3 August 2009 on a number of indictments relating to the shipment of cigarettes to several Member States including Ireland. However, none of the cigarettes in question were manufactured in the USA but Florida was used as the transit route into Europe.

Approximately 42m cigarettes with a retail value of €17.5m have been seized in the first six months of 2009. The efforts that are being made by Revenue to tackle cigarette smuggling include a continuous review of resource deployment both at points of importation and inland with a view to increasing the number of seizures and prosecutions, the procurement of a second Mobile Container Scanner that is expected to be completed this year, continued liaison with An Garda Síochána and where appropriate, the mounting of multi-agency international operations. In addition, Revenue will continue to liaise closely with the legitimate tobacco manufacturers and the Office of Tobacco Control, and will also maintain close contact with the authorities in other Member States and OLAF.

With regard to legislation, I can inform the Deputy that existing enforcement legislation is considered adequate for tackling cigarette smuggling. Current penalties on summary conviction for evasion of duties are €5,000 and/or a term of imprisonment not exceeding twelve months. These reflect the maximum statutory penalties that can be imposed by the District Courts. The penalty for conviction on indictment is currently €12,695 or treble the duty paid value of the goods, whichever is the greater, and/or a term of imprisonment not exceeding five years.