Brendan Smith (Cavan-Monaghan, Fianna Fail)
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322. To ask the Minister for Finance his plans to introduce additional measures to deal with the problem of smuggling and illegal trading in diesel and tobacco products; if specific measures will be introduced to deal with the mixing of kerosene and petrol, commonly referred to as petrol stretching which is resulting in damage to vehicles on a wide spread basis; and if he will make a statement on the matter. [34691/14]

Michael Noonan (Limerick City, Fine Gael)
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I am advised by the Revenue Commissioners that tackling fuel fraud and illicit tobacco is, and will continue to be, a high priority for them.

The Deputy will be aware of the significant threat posed by fuel laundering since 2011 and the successful action taken by the Revenue Commissioners to tackle the problem, including the introduction of 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 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.

I have introduced the necessary legislative provisions for these new measures, and introduced a further 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.

In addition to the measures implemented to date, Revenue and Her Majesty's Revenue and Customs in the UK completed a joint  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.

Revenue has also adopted a comprehensive strategy to tackle illicit tobacco, based on the development of improved intelligence on international and domestic distribution networks and risk based checks on cargo and passengers.  Revenue officers also target the illicit trade at the post-importation level by carrying out intelligence-based operations and random checks at retail outlets, markets and private or commercial premises.  

There is extensive cooperation with An Garda Síochána in combating these illicit trades, and the relevant agencies in the State also work closely with their counterparts in Northern Ireland, through cross-border groups on tobacco and oils enforcement, to target the organised crime groups that are responsible for large proportions of these illicit markets. In addition, cooperation takes place with other revenue administrations and with the European Anti-Fraud Office, OLAF, in the ongoing programmes at international level to tackle these forms of crime.

Considerable success is being achieved in Revenue's action against the illicit trades. Over 245 million cigarettes have been seized in the period 2011 2013. Seizures this year include one of some 32.2 million cigarettes, as well as 4.5 tonnes of water pipe tobacco, from a vessel at Drogheda Port. This was the largest seizure to date in Europe this year, and was the result of an intelligence-led operation targeting the activities of an international organised crime group headed up by Irish and UK nationals and based in Europe.

Action against the illicit oil trade in the period since 2011 has led to the detection and shutting down of 30 oil laundries and to seizure of some 3 million litres of illicit fuel. In addition, more than 120 filling stations were closed for trading without a licence or for breach of licence conditions.  

The Revenue Commissioners review their strategies in relation to fuel fraud and illicit tobacco on a continuous basis and where they identify a need for legislative provisions to strengthen the legal framework for tackling illegal activity and protecting legitimate business I will consider such proposals very carefully. 

I am satisfied with the progress made by Revenue in tackling fuel fraud and illicit tobacco and with the excellent cooperation between Revenue and the fuel sector in implementing very significant supply chain controls over the past three years. I am also pleased with the positive feedback from the fuel sector about the positive impact of the measures and the reduced incidence of laundered fuel on the market. I look forward to continued cooperation with the implementation of the new fuel marker and in tackling continuing problems in the fuel sector, including petrol-stretching, which has recently been reported as causing serious damage to car engines. I understand that Revenue, as part of their investigation of this illegal activity, is in contact with the fuel and motor trades. Motorists should be encouraged to report their suspicions concerning the source of stretched petrol to Revenue. 

The interests of consumers and compliant businesses are best served by them playing their part in combating shadow economy activity by knowing their suppliers and providing information, anonymously or otherwise, to Revenue or to other relevant State agencies on persons involved in the shadow economy.  In that regard, Revenue has recently launched a dedicated section of its website specifically on the shadow economy and this includes an electronic reporting facility for anyone who has information about shadow economy practices.