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 Header Item Customs Bill 2014: Second Stage (Resumed) (Continued)
 Header Item Customs Bill 2014: Referral to Select Committee
 Header Item Estimates for Public Services 2015: Message from Select Committee

Thursday, 5 February 2015

Dáil Éireann Debate
Vol. 866 No. 3

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  4 o’clock

(Speaker Continuing)

[Deputy John Paul Phelan: Information on John Paul Phelan Zoom on John Paul Phelan]  In the area of fuel laundering, we are all familiar with people who have suffered as a result of using laundered fuel. This has happened across country, not least in my constituency. In the past five years, the proliferation of disused filling stations suddenly springing up and offering fuel at much lower prices than longer established fuel facilities rings alarm bells for most people. However, we cannot, nor should we, blame the public for shopping around and ensuring they get the best value for money when buying fuel. Some of the facilities sell illegal product. It is easy for a backbencher to seek extra resources but in this area it is self-financing. If extra expenditure is incurred in policing the activity within the economy, the knock-on benefits to the Exchequer in additional revenue from legally produced fuel will finance the venture. I encourage the Minister of State to ensure the funding is made available.

I welcome the legislation. It seems appropriate that a such a consolidation measure comes before the House. I ask the Minister of State to consider additional resources sought by me and Deputy Tony McLoughlin.

Minister of State at the Department of Finance (Deputy Simon Harris): Information on Simon Harris Zoom on Simon Harris I am glad to have the opportunity to take part in the progressing of the Customs Bill through the House. As the Minister, Deputy Noonan, said in his opening remarks, most of the current national customs legislation is old and, in the main, consists of a body of pre-Independence legislation - the Customs Consolidation Act 1876 - which has been extensively adapted and amended on many occasions over almost 140 years. One consequence is that, while the provisions in the 1876 Act are still on the Statute Book, many of them are now either redundant or of doubtful validity. From a wider perspective, the complicated and overlapping structure of the resulting legislation can, at times, be difficult to follow and to understand.

The purpose of the new Customs Bill is to consolidate, revise and modernise Ireland's existing national customs legislation. The Bill will repeal the existing legislation and will provide a single, modern piece of national legislation in substitution. The new legislation is more in keeping with the developments in trade and in technology over the years and better reflects the current social and political mores.

This legislative approach is at the core of the wider Better Regulation initiative. It will provide greater clarity and transparency and, in so doing, it will make it much easier to access the national customs legislation. This, ultimately, has the potential to reduce the administrative burden and red tape often perceived to be involved in complying with customs legislation and requirements. The Minister, Deputy Noonan, referenced the scale and context of the customs operation in modern-day Ireland that necessitated the modernisation of the underlying national legislation. Approximately 1.1 million customs declarations are made per annum, made up of roughly 600,000 declarations in respect of imports and 550,000 in respect of exports. Some €270 million in customs duty was collected last year.

A number of Deputies raised the issue of fuel laundering and petrol stretching. The Revenue offences attaching to these practices and the powers of Revenue officials relating to detection and prosecution of those involved are dealt with in excise law, principally the Finance Acts. Having said this, significant additional powers have been made available to tackle these issues. A comprehensive strategy to tackle illegal diesel laundering has been put in place, including the licensing regime for auto fuel traders was strengthened with effect from September 2011 to limit the ability of criminals to get laundered fuel onto the market. It also includes a new licensing regime for marked fuel traders, introduced in October 2012, which is designed to limit the ability of criminals to source marked fuel for laundering, and new requirements on fuel traders' records of stock movements and fuel deliveries were introduced to ensure data are available to assist in supply chain analysis. Also, following a significant investment in the required IT systems, a new supply chain reporting regime was introduced from January 2013, which requires all fuel traders to make monthly electronic returns to Revenue of their fuel transactions. Revenue is using this data to identify suspicious or anomalous transactions and patterns of distribution for investigation. We have introduced intensified targeting, in co-operation with other law enforcement agencies on both sides of the Border, of enforcement action against suspected fuel laundering operations.

Deputy Joe O'Reilly and others mentioned the introduction of a new marker. In this regard, following a joint process with Her Majesty's Revenue and Customs in the United Kingdom, a new, more effective fuel marker was identified and will be implemented in the two jurisdictions from the end of March. This will provide a significant boost in the ongoing fight against illegal laundering.

Deputy Calleary referred to the penalties for offences relating to fuel smuggling and laundering and the need to keep them under review. Such penalties are laid down in the Finance Act 2001 and 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. Deputies can be assured that the Minister will keep under review.

A number of Deputies referred to petrol stretching, which involves the illegal addition of kerosene or some other low tax commodity to petrol to defraud the Exchequer and the motorist. The financial gain for criminals of stretching petrol by the addition of kerosene is quite low in comparison to diesel laundering. Revenue estimates that petrol stretching will yield a gain of about 5 cent per litre, whereas diesel laundering will yield a gain of about 50 cent a litre. Revenue is investigating the recent reports concerning petrol stretching and has been in contact with the motor and oil trades. It has taken samples from a number of filling stations that, it has been claimed, may have been sources of such suspicious fuel and will undertake any further inquiries required as a result of reports or information it receives. These inquiries will seek to establish if there is evidence that petrol stretching has occurred and whether there is evidence to support a prosecution.

Deputies, including Deputy John Paul Phelan, raised the issue of tobacco smuggling. Deputies can be assured that combating the illicit trade in tobacco products is, and will continue to be, a high priority for the Revenue Commissioners. This includes a range of measures to identify and target those engaged in the supply or sale of illicit products.

I take on board the comments of Deputies John Paul Phelan and Tony McLoughlin with regard to resources. I will relay their views directly to the Minister for Finance, Deputy Noonan.

I thank Deputies for their constructive and thoughtful contributions during the debate. As the Minister signalled previously, a number of matters are still under consideration for inclusion in the Bill that he may bring forward on Committee Stage and he is looking forward to debating them and some of the other issues raised by Deputies today during the debate on Committee Stage. The Minister will also give consideration to any constructive suggestions put forward by Deputies so far and during the debate on Committee Stage. This is an opportunity for Ireland, in modernising and consolidating our customs law, to get it right and we look forward to a constructive engagement with Deputies on all sides. I commend the Bill to the House.

  Question put and agreed to.

Customs Bill 2014: Referral to Select Committee

Minister of State at the Department of Finance (Deputy Simon Harris): Information on Simon Harris Zoom on Simon Harris I move:

That the Bill be referred to the Select Sub-Committee on Finance pursuant to Standing Order 82A(3)(a) and (6)(a) and 126(1).

  Question put and agreed to.

Estimates for Public Services 2015: Message from Select Committee

An Leas-Cheann Comhairle: Information on Michael Kitt Zoom on Michael Kitt The Select Sub-Committee on Health has completed its consideration of Vote 38 for the year ending 31 December 2015.

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