Written answers

Wednesday, 17 November 2010

Department of Finance

Illicit Trade in Tobacco

9:00 pm

Photo of Alan ShatterAlan Shatter (Dublin South, Fine Gael)
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Question 119: To ask the Minister for Finance the steps he is taking to reduce the amount of smuggling of cigarettes and other tobacco products into the State and to ensure that those found guilty of such offence are properly punished; if he is aware that the average fine for such smuggling in 2010 is less than €600 and if he regards this as appropriate; and if he will make a statement on the matter. [43090/10]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Minister, Department of Finance; 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 for tackling the illicit trade in cigarettes and tobacco products, that Revenue employs a multi-faceted strategy to deal with this problem. It includes ongoing analysis of the nature and extent of the problem, developing and sharing intelligence on a national, EU and international basis, ongoing review of operational policies, development of analytics and deployment of detection technologies, optimum deployment of resources at point of importation and internally to intercept the contraband product and to prosecute those involved. Revenue enforcement officers are deployed at all key ports and airports. Staff deployed at these locations are often augmented by additional staff from other areas when specific operations are organised. Interception at the point of importation is achieved through a combination of risk analysis, profiling, intelligence, and the screening of cargo, vehicles, baggage and postal packages.

Revenue enforcement officers also target this illicit trade at the post-importation level by carrying out intelligence-based operations and random checks at retail outlets, markets and private and commercial premises. In addition Revenue and An Garda Síochána carry out regular multi-agency operations, particularly in relation to large maritime importations and in checks at inland markets.

In terms of detection equipment, a second mobile X-ray container scanner, to augment the one first deployed in 2006, was commissioned by Revenue in January 2010 and is now fully operational. Smaller baggage/ parcel scanners are deployed at all major ports, airports and postal depots. Two new X-ray scanners were also purchased within the last 12 months for use in postal depots. In addition to the x-ray equipment, Revenue uses a tobacco detection dog.

Although Revenue's overall staff numbers have been reduced over the past two years in the context of Government policy on civil service numbers, Revenue has ensured that the resources deployed in this work have been maintained.

Revenue's enforcement approach in the fight against the illicit tobacco trade is under continuous review. For example, in July of this year Revenue launched a nationwide tobacco operation, which concentrated additional Revenue resources at ports, airports and at various retail points for the purpose of identifying illicit tobacco products. This resulted in 561 seizures totalling 13.7m cigarettes and 195 kgs tobacco in the course of the two-week period of the operation. A subsequent 3-day operation held earlier this month resulted in the seizure of over 900,000 cigarettes and 88 kgs of tobacco. Further such intensive operations are planned, to supplement the normal ongoing level of detection and enforcement activities.

The Revenue Commissioners have also established a high level internal group, chaired at Commissioner level to examine the risks related to tobacco excise, and to monitor and optimise performance in relation to detection of counterfeit and contraband tobacco products. This group has promoted a number of initiatives aimed at counteracting the illicit trade in tobacco. These include improved profiling of passengers and freight to identify tobacco smugglers, the recent establishment of a tobacco hotline, coordinating national blitz style operations, evaluation and acquisition of scanning and other detection technologies and learning from best practice internationally.

This multi-faceted approach that Revenue has adopted has resulted in the seizure of 164 million cigarettes and more than 2,900 kgs of tobacco to date in 2010.

With regard to the penalties available for prosecution of tobacco smuggling related offences, the penalty on summary conviction for evasion of duties is €5,000, and/or a term of imprisonment not exceeding 12 months. The penalty on indictment is up to €126,970 and/or a term of imprisonment not exceeding 5 years, or, where the value of the product concerned is greater than €250,000, up to three times the value of the products. The penalty of €126,970, which was enacted by the Oireachtas in this year's Finance Act, had been sought by Revenue and represents a significant increase on the previous penalty of €12,695. (The previous penalty also included the option of three times the value of the products and/or a term of imprisonment not exceeding 5 years). These increased penalties are considered adequate. Of course, as the Deputy is aware, the precise penalty imposed on conviction in each individual case is solely a matter for the Courts and I do not propose to make any comment in that regard.

There have been 85 convictions for cigarette smuggling to date in 2010. The fines imposed amounted to €44,580 and, in addition, 19 custodial sentences have been imposed. The average fine for cigarette smuggling offences in 2010 is €524.

A further 35 convictions were secured for illegal selling of unstamped tobacco products with total fines of €90,750, and 6 custodial sentences and 2 community service orders imposed. The average fine for cigarette selling offences in 2010 is €2,593.


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