Joan Burton (Dublin West, Labour)
Link to this: Individually | In context | Oireachtas source

96. To ask the Minister for Finance his plans to increase enforcement and sanctions for fuel laundering in view of the programme for Government commitment and the estimates in the British-Irish Parliamentary Assembly report on cross-Border crime of the loss to the Eexchequer by fuel fraud to be in the range of €140 to €260 million per year; if he has met his Northern Irish counterpart on this issue; and if he will make a statement on the matter. [34106/16]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am advised by Revenue, who are responsible for combating fiscal fraud, that action against fuel laundering and related forms of criminal activity is a central element of their work.

I am advised also that it is inherently difficult to estimate with confidence the extent of any illegal activity and that it is not possible, therefore, to put a figure on the cost to the Exchequer of fuel fraud. Nevertheless, the serious threat that criminal activity of this kind poses to legitimate and compliant businesses, consumers and the Exchequer is recognised, and action against it has accordingly been a priority for Revenue over recent years.

Revenue has implemented a comprehensive strategy to tackle the illegal fuel trade, including the introduction of stringent new supply chain controls underpinning a rigorous programme of enforcement action and supported by a range of new legislative measures that I brought forward in Finance Bills. In addition, Revenue and HM Revenue and Customs in the United Kingdom undertook a joint initiative to find a new fiscal marker for use in marked fuels, which was introduced in Ireland and the United Kingdom from the beginning of April 2015.

In addition, Revenue works closely with An Garda Síochána in acting against fuel fraud, and the relevant authorities in the State also work closely with their counterparts in Northern Ireland, through cross-border enforcement groups, to target the organised crime groups that are responsible for a large proportion of this criminal activity. I believe that this work is being supported and facilitated by the setting up earlier this year, in the framework of "A Fresh Start: the Stormont Agreement and Implementation Plan", of the Joint Agency Task Force, which includes Revenue. I understand that strategic and tactical plans have been agreed by all stakeholders to ensure that the activities of the agencies concerned are targeted as effectively as possible against those responsible for this form of criminality.

Revenue works in close cooperation also with the relevant authorities in other jurisdictions, the European Anti-Fraud Office and other international bodies and agencies in the ongoing programmes of action at international level to combat the illicit fuel trade.

An analysis of the oil market undertaken by Revenue in 2015 indicates that the wide-ranging programmes of action taken against fuel fraud have had a significant impact on illegal activity. This is borne out by feedback from fuel traders and their representative bodies, who report a significant reduction in the incidence of laundered fuel. In addition, Revenue carried out an extensive random sampling programme early in 2016 which tested for the presence of the new fuel marker in the storage tanks of forecourt fuel retailers. No samples tested positive for the new fuel marker.

The penalties for offences relating to fuel smuggling and laundering are laid down in section 119 of the Finance Act 2001 and section 102 of the Finance Act 1999. On conviction following summary prosecution under these provisions, a court may impose a fine of €5,000, or a term of imprisonment not exceeding 12 months, or both. Where a person is convicted for an indictable offence, the court may impose a term of imprisonment not exceeding 5 years, or a fine not exceeding €126,970, or both. In addition, for an indictable offence under section 119 of the Finance Act 2001, if the value of the smuggled fuel concerned exceeds €250,000, including duty and taxes, the court may impose a penalty of three times the value of the fuel, or a term of imprisonment not exceeding 5 years, or both. The penalties were increased in the Finance Act 2010 to an amount significantly higher than that which had applied previously. For example, the fine on conviction for an indictable offence was increased from €12,695 to an amount not exceeding €126,970.

The courts decide on the level of fine to be applied in any particular case and, in practice, they do not apply fines up to the existing limits. There are no proposals at present to increase the level of fines available to the courts. However, the position is kept under review, taking account, among other considerations, of the practical experience of the fines imposed under the current provisions.

I am satisfied that Revenue's work against fuel laundering has achieved a considerable level of success, and I am assured that action against fuel fraud will continue to be a high priority.