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Home > Written answers - Trade in illicit goods [Tobacco] [56444/12].

[Oireachtas] Written answers - Trade in illicit goods [Tobacco] [56444/12]. (18 Dec 2012)

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152. Deputy Mattie McGrath asked the Minister for Finance the steps he will take to penalise criminals involved in the sale and supply of laundered, illegal or counterfeit products such as diesel, tobacco and clothing; if he has considered increasing the fines for such activity; his view on the resources available to the Revenue Commissioners and Customs to tackle this problem; and if he will make a statement on the matter. [56444/12] 

 

Minister for Finance (Deputy Michael Noonan): I am informed by the Revenue Commissioners, who have responsibility for the collection of tobacco products tax and mineral oil tax and for tackling the importation of counterfeit goods, that they are very conscious of the threat that this illegal activity poses both to the Exchequer and to legitimate businesses. Revenue is committed to prioritising resources to tackle the shadow economy and has developed specific strategies to guide the extensive work being undertaken in this area. The approach adopted by Revenue towards intercepting contraband product, detecting illegal activity and prosecuting those involved is multi-faceted. It includes ongoing analysis of the nature and extent of illegal activity, developing and sharing intelligence on a national, EU and international basis, ongoing review of operational policies, development of analytics and detection technologies, engagement in multi-agency operations and optimum deployment of resources at the point of importation and inland.

 

For example, in response to fuel laundering, Revenue has recently strengthened the fuel-licensing regime to make it more difficult for launderers to get their product onto the market. New and enhanced licensing requirements were introduced in 2012 for anyone dealing in marked fuels and auto fuels. There will be a requirement, from 1 January 2013, for all fuel traders to make electronic monthly returns to Revenue on their fuel transactions, facilitating Revenue in detecting unusual or anomalous patterns of activity. In addition to these important changes, Revenue is pursuing a more effective fuel marker in conjunction with Her Majesty's Revenue and Customs in the UK, under a Memorandum of Understanding between the two authorities. A joint invitation for submissions from companies and other interested parties, aimed at finding a replacement for the current fuel markers, generated international interest and a number of submissions were received by the closing date of 30th November 2012. The joint evaluation of these submissions will take place over the coming months and will include rigorous technical testing to establish the resilience of the marker to existing and new laundering techniques. The evaluation is expected to be completed by mid 2013.

 

The work in tackling smuggling and trading in illicit products is ongoing and has led to significant detections and seizures of illicit product and to the prosecution and conviction of those involved. With regard to illicit tobacco and fuel, since January 2011

- Revenue has detected and closed 20 fuel-laundering plants, 11 of these in 2012;
- Since July of last year, over 70 fuel retail outlets have been closed:
- Over 2 million litres of fuel has been seized to date.
- 203 million cigarettes have been seized with a retail value of €88.2m, involving 18,237 individual seizures.
- 16,572 kilos of tobacco have been seized with a retail value of €6m, involving 2,798 seizures.
- Revenue obtained 159 convictions for cigarette smuggling, 56 of which resulted in custodial sentences and €229,850 in fines.
- Revenue achieved 131 convictions for sales of illicit cigarettes, 36 of which resulted in custodial sentences and fines of €263,900

Counterfeit and pirated goods are a threat to legitimate businesses, and can pose significant health and safety risks. The range of goods that is pirated is extensive and, as well as clothing, includes cosmetics, personal accessories, mobile phones and electronic equipment, CDs, DVDs, toys and medicines. I am informed by the Revenue Commissioners that under EU law, Customs action in relation to counterfeit goods is confined to goods being imported from or exported to countries outside the European Union, and that enforcement action in relation to intra-Community trade in such goods is a matter for An Garda Síochána. The Revenue Commissioners inform me that there is close cooperation between them and An Garda Síochána in tackling the counterfeit trade, and that there is also ongoing international cooperation on the matter. During 2011 and 2012, Revenue participated in five anti-counterfeit international operations organized under the auspices of the World Customs Organisation, and I understand that further operations of this kind are envisaged.

The quantities of counterfeit goods that are seized by Revenue are significant. In 2011, there were 4,166 seizures involving over 146,000 items (including more than 10,800 items of counterfeit clothing and personal accessories) with an estimated value of just over €9 million. In the current year, to the end of September, there were 3,959 seizures comprising 76,801 items, including more than 43,400 items of clothing and accessories, with an estimated value of €3.74 million.

Penalties for excise and counterfeit offences have increased substantially in recent years. A person convicted is liable, on summary conviction, to a fine of €5,000, or a term of imprisonment not exceeding 12 months, or both a fine and imprisonment. Where a person is convicted for that offence on prosecution on indictment, the Court may impose a fine not exceeding €126,970, of where the value of the goods concerned is greater than €250,000, not exceeding three times their value. The Court may impose a prison sentence not exceeding 5 years instead of, or in addition to, a fine.

Finally, as regards resources, the Revenue Commissioners are subject to the Employment Control Framework staffing reductions in line with Government policy to reduce public service numbers. In this context, I am satisfied that Revenue is affording priority to maintaining staffing numbers engaged in this area of work, to the greatest extent possible. 

Dáil Éireann debate - Trade in illicit goods
Tuesday, 18 December 2012

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