42. Deputy Brendan Smith asked the Minister for Finance his plans to introduce additional measures to deal with the cross border smuggling of illicit products such as tobacco and diesel; and if he will make a statement on the matter. [50800/17]

Minister for Finance (Deputy Paschal Donohoe): The serious threat that fuel fraud and the illicit tobacco trade pose to legitimate business, to consumers and the Exchequer is recognised and I am advised by Revenue that tackling this criminal activity has been one of its priorities over recent years.

Revenue’s comprehensive strategy for combatting the illegal fuel trade has included the introduction of stringent new supply chain controls and reporting requirements for fuel transactions, to minimise the scope for fraud.  It also included a rigorous programme of enforcement action, underpinned by legislative changes that have been introduced over a number of Finance Acts to strengthen Revenue’s powers for dealing with fraud of this nature. 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.

I understand that the industry view is that the measures implemented to date have been successful in significantly curtailing fuel fraud in Ireland.  This view is supported by a significant increase in tax revenues from road diesel over the past three years.  I am also advised that Revenue conducted a National Random Sampling Programme in January 2016, with a view to obtaining an updated picture of the extent of the fuel laundering problem.  The programme involved selecting a random sample comprising nearly one in every ten of the 2,500 holders of Auto Fuel Trader Licences (any trader that produces, sells, deals in, or keeps for sale or delivery road diesel is legally obliged to hold such a licence).  Road diesel samples were taken from all traders in the programme and tested for the presence of the new marker.  No evidence of the new marker was found in any of the samples tested.  The random sampling programme was repeated in January 2017 and, again, no evidence of the marker was found.  This provides very persuasive evidence that the strategy undertaken in recent years has been successful in addressing and significantly curtailing the laundering problem. 

Action is taken against all aspects of the illegal tobacco trade and includes a range of measures to identify and target persons engaged in the supply or sale of illicit products, with a view to seizing the illicit products and prosecuting those involved.  Revenue’s multifaceted strategy encompasses, also, ongoing analysis of the nature and extent of the problem, extensive cooperation (including the development and sharing of intelligence) on a national, EU and international basis, use of analytics and detection technologies and optimising the deployment of resources.

A combination of risk analysis, profiling and intelligence and the screening of cargo, vehicles, baggage and postal packages contribute to the effectiveness of Revenue’s goal of intercepting the supply of illicit tobacco products. Revenue also target the illicit trade at post-importation level by carrying out intelligence-based operations and random checks at retail outlets, markets and private and commercial premises.

In addition, and as in the case of fuel, action has been taken through Finance Acts over recent years to ensure that Revenue has the statutory powers necessary for undertaking its important work against the illegal tobacco trade.

In terms of assessing the overall performance in tackling the illegal tobacco trade, a reliable measure is provided by the annual surveys of illegal tobacco products carried out by IPSOS/MRBI for Revenue and the National Tobacco Control Office of the Health Services Executive. The survey in 2016 found that 10% of cigarette packs encountered in the course of the project were illicit, down from the levels of 15% and 13% found in 2011 and 2012 respectively.

Revenue works closely with An Garda Síochána in acting against fuel and tobacco 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 responsible for a large proportion of this criminal activity. This work is being supported and facilitated by the setting up in 2016, within the framework of “A Fresh Start: the Stormont Agreement and Implementation Plan”, of a Joint Agency Task Force, which includes Revenue as well as An Garda Síochána and their Northern Ireland counterparts.  Revenue also works in close cooperation 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 both the illicit fuel and tobacco trades.

I am satisfied that Revenue’s work against fuel fraud and the illicit tobacco trade has achieved a considerable level of success, and I am assured that action in these areas will continue to be given high priority. In addition, I assure the Deputy that I will give careful consideration to any further proposals for legislative change that may be brought forward by Revenue to enhance its capacity to deal effectively with fraud and criminality in these areas.