…..[Deputy Peadar Tóibín:] It is important to understand in the context of the customs union. My party is happy to support the passage of the Bill to Committee Stage where we will examine it in detail and possibly propose some amendments based on the issues I spoke about today.

Deputy Finian McGrath: I thank the Acting Chairman for the opportunity to speak on the Customs Bill 2014. I welcome the debate and the legislation. It is important to examine reform and the legislation dealing with customs.

I thank the staff who work in customs and commend them on an excellent job, which is thankless at times. They are dedicated public servants who sometimes put their lives at risk to serve the public good. It is important to say that in the debate. Over 2,000 staff are engaged in activities dedicated to target and confront non-compliance. The front-line activities include anti-smuggling, anti-evasion, investigation, prosecution, audit, assurance checks, anti-avoidance, returns compliance and debt collection. At times this can be a thankless and a dangerous job but they should focus on these issues. It is important these people get out and deal with it on the front line. They should focus on the concerns and protection of the citizens of this State.

A number of colleagues referred to the issue of illegal cigarettes. It is a major industry in the country. As well as being illegal, we are missing out on a couple of hundred million euro in taxes and revenue. We must focus on this. We must stop beating up smokers, which happens a lot. In recent days, we have started beating up e-smokers. While 150,000 of them are trying to give up cigarettes, Senators are prancing around trying to make life more difficult for those on e-cigarettes. This is the kind of nanny-state activity and distraction politics that must always be challenged. The real issue is illegal cigarettes and trying to get in a few extra bob. Every day, the Minister for Finance is looking for an extra few bob. Customs is a strong part of it and we should strongly support its activities. This is important.

We also have a drugs crisis in the State. Drugs are being smuggled in and, every now and again, we hear about the shipment being caught. However, most of them are getting through to many gangs in the city that are causing havoc, wrecking communities and intimidating whole streets. That is why we should be strong on this issue and vigilant about our coasts. We are an island nation and our coasts need to be protected and patrolled. The average customs man or woman on the front line would say that we do not have enough resources. These people play a major role in trying to protect the citizens of the State. I raise these issues in the broader context of the legislation.

The legislation is positive. It seeks to consolidate and modernise the national legislation relating to the administration of customs into a single item of legislation. That is common sense and part of the modernising process. It is also important to consider the European dimension to customs and, in particular, the EU's customs code. The current code and its implementing provisions set out the rules for importing and exporting goods and impose legal requirements and obligations on importers and exporters. In Ireland, customs controls are enforced by the Office of the Revenue Commissioners, administering the customs regime for the control of imports and exports and collection of duties and levies on behalf of the EU. Import duties collected by customs remain an important source of income for the EU. In 2012, they represented nearly 13% of the EU budget, which amounts to €16.3 billion. That is a very important figure yet most people have never heard of it. According to the Revenue Commissioners annual report for 2013, Ireland is fourth in Europe for efficiency of customs administration and fifth in the world. That is a high ranking, although not as high as the Acting Chairman, Deputy Bernard Durkan, who had the highest speaking time in the Dáil in 2014. I congratulate him on getting the number one slot. Many people are not aware of that and I hope the Minister appreciates the importance that we are up there in the premiership.

According to the Revenue Commissioners annual report for 2013, there were 1,170,989 customs declarations in 2013, an increase in 4% over 2012. With regard to drug seizures, the 2013 figures show 724 seizures of cannabis, amounting to a value of €11.31 million. There were 116 seizures of cocaine and heroin, amounting to €4.54 million, while there were 5,690 seizures of ecstasy and other drugs, amounting to a value of €4.96 million. The total number of seizures in 2013 was 6,530 and the value was €20.81 million. That is a lot of money. I warned the Minister for Justice and Equality and the Minister for Finance that this is the tip of the iceberg. Many drug shipments are getting through. The sad reality is that they are destroying our cities and towns. While we are modernising and making the legislation and the customs service more efficient, we should never take our eye off the ball. While we are at the top in terms of efficiency, we should be interested in upping our game.

Customs are in a unique position today to be able to facilitate trade and protect the interests of the EU and its citizens. I focus on our own State, which is very important. The custom systems can regulate and collect customs and excise duties, check commercial goods, and carry out security and safety checks, which are an important dimension, as well as monitoring to prevent organised crime and terrorism. I mentioned the drugs issue but there are organised crime elements, particularly in Dublin city, that have moved away from drugs because of the hassle from the drugs squad and the Garda Síochána. They have moved into illegal cigarettes, where there is more money to be made than in cocaine, cannabis and heroin. Customs have an important part to play in this.

The powers of seizure and forfeiture of goods have been known to the law and have been used in varied areas of legislation including firearms, drugs, fishing, counterfeiting and the proceeds of crime. Under the Bill, in addition to fines and imprisonment, goods can be detained, seized and declared forfeit. Customs officers have powers under Part 4 of the Bill, sections 25 to 35, to assist them in detection, including powers of stop, search, examination and arrest. This is dealt with in legislation but the important aspect is the safety of the staff.

Customs, at its most basic definition, means taxes on imports and exports. The Revenue Commissioners are responsible for regulation of the customs system in Ireland. It is important to focus on the issue. I welcome the legislation and I will support it because it consolidates all national customs provisions.

…….[Deputy Tony McLoughlin:] I do not need to elaborate here how this activity is affecting their business trade, at a time when revenues are already dwindling. Three small retailers closed in Sligo town just last week.

Not one red cent of this €3 will make its way back to the Exchequer, and in fact, it will more than likely be used by criminal organisations to further their criminality and increase their profits in this country and beyond. Just this week we have seen the extent to which these criminal gangs will go in order to evade both the Irish Customs officials and their counterparts in the United Kingdom. The massive seizure of over €2 million worth of raw tobacco in a joint raid by Customs and Excise, the PSNI and An Garda Síochána shows the smugglers' intent and capabilities.

Another area where the Customs Bill will be beneficial is in the State's attempts to tackle the rise in the online purchasing of counterfeit goods from which the State receives no VAT. This practice is on the rise internationally, and greater co-operation between Irish Customs and our international partners is needed to combat this trend. A number of retailers in my constituency have informed me that this practice is having a damaging effect on local retailers.

While I strongly support the contents of the Bill, I believe that fine of just €5,000, listed in a number of sections of this Bill, for a person convicted of an offence under customs law is too lenient and should be examined again. This fine needs to be higher, as it will not deter people from taking the chance of smuggling illegal or prohibited goods, both into and out of the State at its current level.

Along with this welcome modernised customs legislation, I also strongly believe the State needs to invest more funding in the resources available to Customs and Excise, in order to help further combat the threat our country faces from smugglers and criminal gangs.

I have stated before that an agency similar to the Criminal Assist Bureau should be established within Customs and Excise and the Garda solely to tackle the importation and distribution of illegal tobacco products. There needs to be an intelligence-led strategy with officers seconded to this unit from the Garda and Customs and Excise who will target the importers and distributors throughout the country. It will cost money but this funding can be obtained through a levy or tax on cigarettes, rather than directly from the Exchequer. However, it would need a proper budget and mandate to tackle the crime of tobacco smuggling, which is estimated to cost the taxpayer €450 million per year.

It is clear from the facts that we are not winning the battle with these criminal gangs and smugglers at present. More financial resources for Customs and Excise and the Garda are needed along with this new legislation. However, I welcome the legislation and I hope it will be beneficial to their efforts.

I pay tribute to and commend the work the Irish Customs and Excise service does in protecting our State. It is often a thankless job and it is important that their hard work and effort is recognised and commended while discussing this new and welcome customs legislation.

Deputy John Paul Phelan: I pick up where Deputy McLoughlin left off. I thank the Customs and Excise service and An Garda Síochána for their efforts in protecting our borders commercially. The Deputy pointed out that they may need more resources. I know there is a constant demand on Ministers for more resources. I will make that point later in my contribution.

We are dealing with legislation in the customs area that goes back to 1876, which is a long time ago. The importation of articles and material into the country has changed considerably in that 140 year period. I welcome the measures in the legislation which take account of the changes that have taken place in the intervening period, not least the effect of European Union regulation and law in this area. I know that is part of the Bill we are discussing and the Minister referred to it in his opening comments. I welcome that the Bill carries forward the existing customs appeals procedures.

Further to Deputy McLoughlin's contribution, my major focus is on the importation of illegal or counterfeit goods and other materials, principally tobacco and fuel. I am a member of a committee of the British-Irish Parliamentary Assembly that is investigating mainly fuel laundering and counterfeit importation in general. We have been presented with pretty strong evidence of such illegal activities that continue in the country. I appeal to the Minister of State on the issue of counterfeit cigarettes. I speak as somebody who from time to time socially avails of tobacco. Some people might say I have a vested interest. I can assure the House that my vested interest is in protecting people's health and protecting the taxpayer.

Many of these counterfeit cigarettes are of a particularly dangerous quality and standard. That goes above and beyond the obvious negative health effects smoking has on individuals. That is one factor to be taken into consideration. The other is the loss to the Exchequer, which is hard to quantify for sure. In my part of the world there is considerable anecdotal evidence of significant sales of counterfeit tobacco products. Representatives of those involved in the legal sale of tobacco have supplied me with evidence of particular activities that go on in some of our port towns and the surrounding hinterland. They report significant reductions in the sales of tobacco products at times when significant ships come into that port town. I know it is anecdotal evidence and it is hard to quantify it exactly. However, all these retail representatives tell me the same story.

Kilkenny is an unusual area in that it is an inland county with two ports - the Port of New Ross and the Port of Waterford. The Port of New Ross, partly, and the Port of Waterford, wholly, are located in County Kilkenny. Significant evidence has been presented to me of activities that coincide with the arrival of certain vessels from certain areas into those port facilities and the resultant decline in the sale of legal tobacco products in outlets in the immediate hinterlands of those ports. It is also obvious that certain individuals, who have no other obvious source of wealth or income, manage to live lifestyles that are incompatible with what their legal income might be determined to be because they are allegedly, at least, involved in these activities.

I know there has been investment in recent years in additional scanning facilities at our ports. There is at least one mobile scanning unit and there may be others. I ask the Minister of State to clarify that in his concluding remarks. More investment is needed in this area because it will have a knock-on beneficial effect for the Exchequer in terms of ensuring that the tobacco products sold here are legal....