Brian O'Shea (Waterford, Labour)
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Question 152: To ask the Minister for Finance his plans to put in place a national tobacco anti-smuggling strategy (details supplied); and if he will make a statement on the matter. [11196/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I am informed by the Revenue Commissioners who are responsible for the collection of tobacco products tax and tackling the illicit trade in cigarettes and tobacco products that their strategy for tackling this illicit trade is focused both on intercepting and seizing illicit consignments at the point of importation and on carrying out checks at retail outlets, markets and commercial premises etc. This is achieved through a combination of freight intelligence, risk profiling and scanning in the case of smuggling in maritime freight. In the case of passengers arriving by air from high risk source countries where cheap cigarettes are freely available, targeting smugglers is carried out on the basis of risk profiling by Revenue Officers based at all the main airports. Where feasible, large consignments are placed under surveillance and allowed to proceed to their destination under a controlled delivery with a view to identifying those responsible for the importation. These operations are normally carried out on a multi-agency basis with the assistance of the Garda.

Illicit cigarettes that escape detection at the point of importation are also seized inland in the course of intelligence-based checks carried out at retail outlets, markets, commercial premises etc. Follow-up investigations are conducted both at home and abroad with a view to identifying those responsible and instituting criminal proceedings where the necessary evidence has been obtained.

Revenue strategies in these areas are under continuous review. This includes the adequacy of existing staffing resources and equipment. In this regard, taking cognisance of the interception and seizure of a number of consignments of counterfeit cigarettes bearing bogus Irish tax stamps concealed in maritime freight imported from China, a new tobacco tax stamp with added security features was introduced last year. In addition, a second mobile container scanner was delivered to the Revenue Commissioners and entered service following testing in December 2009.

Revenue works closely with the individual tobacco manufacturers and the Irish Tobacco Manufacturers Advisory Committee (ITMAC) with a view to identifying illicit cigarettes on sale in the State, current trends and trading patterns. There is also close co-operation and sharing of information between Revenue and the Office of Tobacco Control (OTC). In addition, on an EU wide basis, Revenue actively co-operates and shares information with the European Anti-Fraud Office (OLAF) and with other Customs Administrations in the Member States. Furthermore, Ireland, along with the other Member States, has also ratified two international agreements concluded by OLAF with global cigarette manufacturers, Philip Morris International and Japan Tobacco International, with a view to tackling the illicit trade in counterfeit and contraband cigarettes.

Furthermore, officials from my Department met in January this year with representatives of health organisations, the tobacco industry and officials from other government Departments, at which, among other things, the problem of tobacco smuggling was discussed. Arising from that meeting I introduced provisions in the Finance Bill 2010 significantly increasing the maximum fines that the Courts can apply in relation to tobacco offences. If the value of the goods involved is €250,000 or less, the Court will be permitted to impose a fine not exceeding €126,970. If the value of the goods is greater than €250,000, the maximum fine will as at present be three times their value. The proposed change should ensure that the penalties for the offence of illegal importation of cigarettes will serve as an effective deterrent to such activity.