Michael McGrath (Cork South Central, Fianna Fail)
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111. To ask the Minister for Finance the annual cost to the Exchequer of the use of illegal washed diesel; and if he will make a statement on the matter. [32457/14]

Michael Noonan (Limerick City, Fine Gael)
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The Revenue Commissioners, who are responsible for tackling fuel laundering, advise me that there is no reliable estimate of the cost to the exchequer of fuel laundering. However, removal of the marker from rebated fuel represents a significant threat to the exchequer and therefore Revenue has made action against this illegal activity one of its priorities and is implementing a comprehensive strategy to tackle the problem through enhanced supply chain controls, the acquisition of a more effective fuel marker and continued robust enforcement action.

Supply chain controls have been enhanced progressively since 2011 with the objective of reducing the capacity of criminals to source marked diesel for laundering or to get laundered fuel onto the market. The supply chain controls introduced include new licensing conditions for all fuel traders and the introduction from January 2013 of a requirement that all licensed fuel traders, whether dealing in road fuel or marked fuel, make detailed monthly electronic returns to Revenue of their fuel transactions. Revenue is using this data to identify suspicious transactions and patterns of distribution for investigation. Revenue has also intensified its targeting, in co-operation with other law enforcement agencies on both sides of the border, of enforcement action against suspected fuel laundering operations.

To support further the integrity of the distribution system and minimise the risk of fraud, I introduced a provision in the Finance (No. 2) Act 2013 that will make a supplier who is reckless in supplying rebated fuel for a use connected with excise fraud liable for the duty at the standard rate of tax. This new provision will strengthen Revenue's hand in dealing with those traders supplying rebated fuel recklessly to dubious customers and will provide a further disincentive to such activity. Revenue has published guidelines for mineral oil traders which will assist them in identifying and avoiding such transactions.

Revenue works very closely with fuel sector representative bodies in tackling the problem and they have been very supportive of the measures introduced to combat fuel laundering.  The evidence available to Revenue, in terms of feedback from the legitimate trade and increased consumption of road diesel, indicates that this strategy has been very effective.

In addition to the measures implemented to date, Revenue and Her Majesty's Revenue and Customs in the UK completed an Invitation to Make Submissions process to identify a new fuel marker and it is expected that a new marker will be introduced in both jurisdictions early in 2015, following consultation with the oil industry and other stakeholders.