John McGuinness (Carlow-Kilkenny, Fianna Fail)
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242. To ask the Minister for Finance the amount of lost revenue to the State by diesel laundering over each of the past five years; the number of cases successfully prosecuted of those involved in the practice; the revenue collected by the State, arising from successful prosecutions; the level of resources allocated to investigate such matters; and if he will make a statement on the matter. [8091/15]

Michael Noonan (Limerick City, Fine Gael)
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The Deputy will appreciate that it is inherently difficult to estimate the scale of any illegal activity or the impact of that activity on the Exchequer. The Revenue Commissioners advise me that, while there is no reliable estimate of the extent of illegal activity in the fuel sector, they recognise that fuel fraud, including the laundering of markers from rebated fuel, is a significant threat to Exchequer revenues. Action against this illegal activity is, therefore, a priority for Revenue, which is implementing a comprehensive strategy to tackle the problem. Key elements of this strategy include the following:

- The licensing regime for auto fuel traders was strengthened with effect from September 2011 to limit the ability of fuel criminals to place laundered fuel on the market.

- A new licensing regime was introduced for marked fuel traders in October 2012, designed to limit the ability of criminals to source marked fuel for laundering.

- New requirements in relation to fuel traders' records of stock movements and fuel deliveries were introduced to ensure that data would be available to support supply chain analysis.

- Following a significant investment in the required IT systems, new supply chain controls were introduced from January 2013. These controls require all licensed fuel traders, whether dealing in road fuel or marked fuel, to make monthly electronic returns of their fuel transactions to Revenue. These data are being used to identify suspicious or anomalous transactions and patterns of distribution that will support follow-up enforcement action where necessary.

- Close co-operation, in the framework of the Cross Border Fuel Fraud Enforcement Group, with other enforcement authorities in this jurisdiction and in Northern Ireland in combating the all-island problem of fuel fraud. This has proven effective in supporting the identification and targeting of the organised crime groups, many with links to paramilitaries and former paramilitaries, which are responsible for the bulk of fuel fraud.

- Following a joint process, Revenue and HM Revenue and Customs have identified a new and more effective product to mark rebated fuels. The new marker will be produced by Dow Chemical Company and will be introduced in the State and in the UK from the end of March 2015, providing a significant boost in the fight against illegal fuel laundering in both jurisdictions. In addition, I have introduced a range of legislative measures in recent years to support Revenue's work in fighting fuel fraud, including reckless trading provisions that ensure a mineral oil trader is liable for the mineral oil tax evaded where that trader knew, or was reckless as to whether or not, in making a supply or delivery, he or she was participating in a transaction or series of transactions connected to the evasion of mineral oil tax. In the Finance Act 2014, I introduced measures to further strengthen Revenue's ability to refuse or revoke a mineral oil trader's licence where the trader does not comply with excise law, does not maintain adequate stock management systems and records, or provides false or misleading information. Revenue's strategy has yielded significant results. Since mid-2011, 134 filling stations were closed for breaches of licensing conditions, over 3 million litres of oil have been seized and 31 oil laundries were detected and closed down. Industry sources indicate a much-reduced incidence of laundered fuel on the market, and road diesel consumption and tax revenues have risen significantly compared with a couple of years ago. Obviously, other economic factors have contributed to this growth but reduced fraud is also an important factor. There were four convictions between 2010 and 2014 for offences related to the illegal laundering of markers from fuel. In addition, there were twelve convictions in that period for offences related to the sale or distribution of laundered fuel, in respect of which the penalties imposed by the Courts included fines amounting to €37,000. The Revenue Commissioners are not responsible for the collection of fines imposed by the Courts and would not have details about their payment. The Revenue Commissioners work to ensure also that the tax affairs on any persons found to be involved in the illegal laundering of fuel are subjected to full and rigorous examination, and that monies owed, including interest and penalties where applicable, are recovered. In relation to the resources allocated to investigate this form of fuel fraud, I am informed by the Revenue Commissioners that they are a fully integrated tax and customs administration and that it is not possible to disaggregate resources deployed exclusively at any given time on action against fuel laundering. Revenue currently has approximately 2,000 staff engaged on activities that are dedicated to targeting and confronting non-compliance. These front-line activities include anti-smuggling and anti-evasion, investigation and prosecution, audit, assurance checks, anti-avoidance, returns compliance and debt collection. The Revenue Commissioners were subject to the Employment Control Framework staffing reductions imposed since 2009. Revenue's overall staffing levels have reduced from a total of 6,581 full-time equivalents at the end of 2008 to the current level of 5,661. Notwithstanding this reduction, Revenue staff resources assigned to compliance activities have been maintained at around 2,000. I am advised by the Revenue Commissioners that they are committed to ensuring that, despite the staffing reductions, enforcement work generally, and action against fuel fraud specifically, will continue to be resourced to the maximum extent possible.