Brendan Smith (Cavan-Monaghan, Fianna Fail)
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88. To ask the Minister for Finance the additional measures he proposes to implement to deal with the issue of illegal trading in diesel and petrol products, which is impacting severely on small legitimate businesses and on many motorists due to damage to vehicle engines, particularly in the Border areas; and if he will make a statement on the matter. [15107/15]

Michael Noonan (Limerick City, Fine Gael)
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I am advised by the Revenue Commissioners that they recognise the serious threats that fuel fraud poses to legitimate businesses, motorists and Exchequer revenues. Action against this illegal activity is, therefore, a priority for them, and they are implementing a wide-ranging programme of measures to tackle the problem. Key elements of this programme include the following.

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

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

- New requirements for the keeping by fuel traders of records of stock movements and fuel deliveries were brought in to ensure that data would be available to support supply chain analysis.

- Following a significant investment in the necessary IT systems, new supply chain controls were initiated from January 2013. These require all licensed fuel traders, whether dealing in road fuel or marked fuel, to make monthly electronic returns of their fuel transactions to Revenue, providing data that can be used to identify suspicious or anomalous transactions or patterns of fuel distribution.

- Close cooperation, 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 fuel fraud problem on an all-island basis.

- The introduction from the start of this month of a new and more effective product for marking rebated fuels that was identified as a result of a joint process conducted with HM Revenue and Customs in the UK. In addition, I have introduced a range of legislative measures in recent years to support Revenue in their work against fuel fraud, including reckless trading provisions that ensure that 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 the supply or delivery of fuel, he or she was participating in a transaction or series of transactions connected to the evasion of that 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 nor comply with excise law, does not maintain adequate stock management systems and records, or provides false or misleading information. Revenue's ongoing action against fuel fraud has yielded significant results. Since mid-2011, 136 filling stations were closed for breaches of licensing conditions or for unlicensed trading, over 3 million litres of fuel have been seized and 31 oil laundries were detected and closed down. Industry sources report a much-reduced incidence of laundered fuel on the market and increased road diesel consumption. Obviously other economic factors have contributed to this growth but reduced fraud is also an important factor. I am advised also that the Revenue Commissioners have, since last summer, received reports from around the country of problems relating to petrol quality, and suggestions that these problems are attributable to petrol stretching. Petrol stretching involves the illegal addition of a low-tax commodity to petrol, and the motive of the criminals who engage in this activity is to profit from the sale of the adulterated petrol, thereby defrauding motorists and the State. Every filling station about which a complaint was made has been visited by Revenue enforcement officers and fuel samples taken from them have been sent to the State Laboratory for analysis. The scientific analysis required is complex and time-consuming, and the State laboratory has conducted an extensive series of tests and re-tests on the samples. Despite this extensive testing, evidence of the presence of prohibited stretching agents has been found in only two samples, both from one location. The conclusive results received from those tests led to the seizure of the product, and files are being prepared with a view to prosecution. Following a series of further tests conducted by the State Laboratory, results were received which indicated the presence of road diesel in several samples from a variety of locations. This could indicate that petrol was contaminated with road diesel at some point in time. If the problems that have come to light were caused by unintended contamination as a result of diesel being inadvertently mixed with petrol at some point along the supply chain, there would be no Revenue offence involved. However, the Revenue Commissioners are investigating the possibility of tax fraud being associated with the identified problems. In any instance where the analysis of samples by the State Laboratory indicates the presence of illegal stretching agents in petrol, Revenue will take swift and robust action and pursue prosecutions against alleged offenders where possible. I am satisfied that the Revenue Commissioners  are undertaking a wide-ranging and effective programme of action against all forms of fuel fraud and am assured that combating this illegal activity will continue to be a key priority for them.