Joe Costello (Dublin Central, Labour)
Link to this: Individually | In context

Question 297: To ask the Minister for Finance the extent of illegal operators and fuel smuggling in border areas; the steps he has taken to confront the problem; the extent to which fuel smuggling and illegal operators create issues for the haulage industry; and if he will make a statement on the matter. [42717/10]

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

I am informed by the Revenue Commissioners, who are responsible for the collection of mineral oil tax and for tackling the illicit trade in mineral oil products that they are aware of the various illegal activities that lead to a loss to the Exchequer of mineral oil tax. The most serious risk in this regard is the large scale laundering of markers from mineral oil, [including marked ultra low sulphur gas oil (ULSGO)], which is subject to a reduced rate of mineral oil tax on condition that it is not used in road vehicles. Such activity is usually carried out in remote rural locations. The Deputy will appreciate that, due to its nature, it is impossible to provide a reliably accurate estimate of the extent of any illegal activity. The Revenue Commissioners are committed to tackling mineral oil fraud. Their goal is to prevent a loss of revenue to the state and at the same time to ensure that a level playing pitch exists for the benefit of legitimate trade interests, including the road haulage industry. In this regard Revenue employs a broad range of compliance and enforcement strategies to detect illicit practices involving mineral oils. These strategies include ongoing analysis of the nature and extent of the problem, development and sharing of intelligence with agencies on both sides of the border, development of analytics and deployment of detection technologies, optimum deployment of resources to intercept illicit product and to prosecute those involved, conduct of intelligence driven operations using covert surveillance to identify oil laundry locations and also physical sampling at selected road checkpoint locations.

Revenue enforcement officers are deployed at key locations along the border. The staff are regularly augmented by additional staff from other areas when specific operations are organised. While the physical environment and separation of law enforcement in border areas is exploited by criminals to conduct this illegal activity, the Commissioners advise me that such operations are not solely confined to those areas. This is borne out by two recent detections of oil laundries on farms in the midlands.

Revenue's operations are under continuous review. The Revenue Commissioners are presently reviewing the existing marker system and are exploring the introduction of new markers as well as new detection equipment.

For the past two years Revenue has played an integral role as part of a cross border multi-agency Organised Crime Task Force which has been set up specifically to deal with the illicit trade in mineral oil in the border area. Members of this group include Revenue, An Garda Síochána and various law enforcement agencies from Northern Ireland. Since its inception it has successfully targeted a number of illegal operators in the border area. In one such cross-border operation, in April 2009, three oil laundering plants were detected in Armagh, with consequential seizures of over 100,000 litres of fuel in Monaghan. These multi-agency operations are in addition to daily enforcement activity.

In 2010 Revenue enforcement staff detected four laundering plants in this jurisdiction and seized a total of 268,000 litres of laundered fuel. These cases are under active investigation and it is Revenue's intention to initiate criminal proceedings and prosecute individuals where sufficient evidence of involvement is established.

Also in 2010 there were 1,192 detections in individual motor vehicles of the illicit use of mineral oil, resulting in the seizure of 167 vehicles. There were 222 criminal convictions for such offences resulting in Court penalties of €678,150. A further number of these cases were settled by means of compromise penalties amounting to €669,778.

A provision was enacted in Finance (No 2) Act 2008 enabling Revenue to raise assessments on companies and individuals in respect of evaded excise duty on excisable products, including mineral oils.

The penalties provided under the Finance Acts for conviction for mineral oil related offences are on summary conviction €5,000, and/or a term of imprisonment not exceeding 12 months and on conviction on indictment up to €126,970. The latter penalty, which was enacted in the Finance Act 2010, represents a significant increase on the previous penalty of €12,695.