Customs Bill 2014

I welcome the opportunity to speak on this Bill. This week, a cross-Border raid on properties connected to an organised tobacco smuggling outfit resulted in the seizure of millions of cigarettes and a large quantity of cash. Some 334,000 branded cigarettes were recovered, with a retail value of €167,000 and potential tax revenue of just over €100,000. This was a significant result for Customs and Excise, Revenue, the Garda and, ultimately, the Irish taxpayer. It would not have been possible without strong legislation to back these organisations up. This is why I welcome the Bill. Some of our existing legislative provisions date back to 1876 and this Bill will make some of the more outdated provisions redundant. It is important that we update and consolidate our legislation to reflect these changing times and I commend the Minister for bringing this reforming legislation to the House. It would be remiss not to commend him also for bringing us back from the point of economic Armageddon. If events had continued in the way they were looking at one stage, this would be a minor item on our agenda. We would be in the economic abyss but for the actions of the Minister and the Government.
While the Bill aims to streamline our existing customs legislation into a single entity, it also contains some additional provisions pertaining to forfeiture and the power to detain goods. These new additions are dealt with in sections 17 and 33, respectively. Section 17(3) deals with the issue of illegally imported goods and non-payment of duty. If an individual or business is found to have imported goods without paying the necessary duty, it is standard practice to impound the goods until duty is paid. There are instances where a liability for duty arises and, under this legislation, such goods will be liable to forfeiture. The Bill also reinforces the practice of the immediate forfeiture of goods which are deliberately concealed with a view to avoiding payment of duty or because they are prohibited. These are two welcome additions to existing legislation. They bring Ireland in line with our European counterparts and will harmonise the definition and the qualification of custom infringements and sanctions across all member states.
I understand that, in advance of the publication of the draft EU directive on the Union legal framework for customs infringements and sanctions, the European Union identified huge discrepancies between customs sanctioning systems amongst member states. One of the more startling differences was that the nature of sanctions for customs infringement varied widely from state to state. That is why it is so important to have this legislation in place to unify and consolidate our customs laws with our European neighbours. I was heartened to hear from Deputy Finian McGrath that we are fourth in Europe for quality and competence of our customs services. That can be overlooked when we cite dramatic cases but there is always room for improvement.
Sections 25 to 35 of Part 4 address the powers of customs officers and officials. My constituency of Cavan-Monaghan, which is a Border constituency, has seen a sharp increase in the practice of fuel laundering, petrol stretching and cigarette smuggling around the Border. Last year, Criminal Assets Bureau officers carried out a total of 25 fuel laundering and cigarette smuggling searches in the Border counties. They targeted 21 individuals and confiscated assets with a value of €1.7 million.
In Monaghan, customs officials and the Garda located a large fuel laundering plant which had the capacity to launder dyes out of approximately 20 million litres of oil every year. The dyes found are commonly used to differentiate fuels sold at lower taxes for certain industries, as with green diesel for agriculture. The estimated cost to the Exchequer in terms of lost taxes was thought to be somewhere in the region of €10.5 million per year, which is a significant sum. Some of that money would be much better invested to strengthen services and employ the necessary personnel to prevent these offences.
The impact of this activity on legitimate traders – the ordinary decent retailers who provide local jobs – cannot be overstated. I met a number of them in more recessionary times and it was heartbreaking to hear their stories. They were beset with all the difficulties, including lack of demand, that went with the recession and the collapse of construction and were experiencing a double whammy in having to compete with illegal fuel. It is a very serious matter. I am pleased with the initiative between the Revenue Commissioners and Her Majesty’s Revenue and Customs service on the new marker for rebated fuels in both countries. This is a new dye that will be used in diesel which cannot be laundered. The Minister for Finance, Deputy Michael Noonan, has welcomed this on a number of occasions and was very proactive on it. I remember being one of the facilitators of a meeting a couple of years ago with the Minister and the hauliers from this region. He heralded at that meeting the prospect of this dye and his commitment to working with the authorities to ensure it was introduced. I gather that its implementation is imminent and the Minister might comment further on that in responding to this debate.
Its effect will be enormous and its introduction will represent great progress when supplemented by patrols. To get it done from a chemical and scientific point of view would be great.
The significant achievements of our customs officials and Garda must be commended. While they are all good, as is the initiative on the dye, there are still a number of plants working North of the Border which continue to have a negative impact on our economy and citizens. While there are people who think that purchasing illegal or laundered fuel will save them money, some are unaware of the potential damage they are doing to their vehicle engines. Some people are very foolhardy. The same cautions apply to illegal cigarettes, which are often made using inferior tobacco and can have even greater health implications for smokers than genuine brands. The issue also arises in respect of other illegal drugs crossing the Border.
Sections 25 and 26 are also very important elements of this legislation. They provide customs officers with the power to enter, inspect and patrol certain locations and to stop vehicles, aircraft and vessels which they suspect are involved in smuggling activity. The new provisions outlined in section 33 will mean that customs officials who have reasonable grounds to suspect that goods are being illegally exported or imported have the power to detain said goods pending the outcome of an official enquiry under the terms and conditions of the Customs Act. The 30-day detention limit, as outlined in section 18, is important and represents a modernisation of the existing notice of claim provisions. If a customs officer is of the belief that such goods may also be used as evidence in criminal proceedings but fall outside the remit of the Customs Act, he or she will also have the power to detain these goods and hand them over to the Garda. These aspects can have operational importance in certain instances.
I welcome the inclusion of this provision in the Bill. Our customs officers do sterling work in the Border region and it is important to ensure they have the necessary legislative backing and are equipped to deal with issues. Section 41 in effect repeals the Customs and Excise Act 2001 and ensures that the Naples II Convention, which was designed to improve co-operation between customs officials in various members states, has effect in Ireland. As such, a central data bank, accessible by each member state, will now be accessible by Irish customs officials.
Fighting fuel laundering and illegal trading across the Border is one facet of normalising life between North and South. It is a huge, critical issue to normalise life for law abiding citizens, proper retailers and good employers in the area and to fight off the criminal elements who, as we recently discovered, are also polluting our natural environment with laundered fuel. These criminals are displacing jobs, revenue and services for our needy people. That is one crucial dimension to normalising the North-South situation and harmonising life on the two sides of the Border. The legislation is welcome in that context. While it is not germane to the legislation, it is important to note that as we deal with this issue we need to get an infrastructural balance between North and South, including proper connectivity of roads and byroads. Roads should be restored so that people can travel North or South with ease.
In referring to legitimate traders and the decent people who go about their business trying to earn an honest day’s pay with a local filling station employing local people, it merits mention that the fall in the value of the euro against sterling represents a huge economic opportunity for retailers south of the Border to trade into Northern Ireland and the UK. There is great potential also for Internet trading and legitimate traders. It is seldom that this happens but it does occasionally. Now is one of those times, which is all the more reason the legislation is important. It is important for proper and legitimate trading to eliminate criminality, petrol stretching, diesel laundering, cigarette smuggling and other forms of illicit drug trading. If we eliminate those and build the infrastructure, we can establish a normal trading relationship North and South.
People talk in a misty or romantic way at late hours in taverns and inns about the possibility of a united Ireland. Perhaps they sing songs. However, one will only create the proper united Ireland to which we all aspire by getting the bricks in the wall in the initial stages. That means removing the criminality, establishing normal trade along the Border through legitimate businesses with proper employment and revenue accruing to the State, and building the right infrastructure and trading practices. It is by building those core bricks and putting economic foundations and the rule of law in place that one creates the potential to implement the more grandiose plans. The superstructures will come later but one must get the small things right first.
The legislation is important in getting the small things right. It gives our Revenue services and customs personnel the legislative framework to do their job in a modern and coherent way with other EU states. It is reforming in that respect and I commend the Minister on it. With the new and critical initiative on dye in diesel, it provides confidence and hope to the legitimate traders I met a few years ago who were heartbroken at having to lay people off and whose businesses were greatly at risk.
It gives hope to the legitimate hauliers, whom I met and for whom I facilitated a meeting with the Minister some years ago, who could not run a normal haulage business because they were competing with people who used illegal diesel. Their jobs and families were at risk. I have a very distinguished colleague and friend, an eminent person in local government and a leading member of the council of the Irish Road Haulage Association, Councillor Peter McVitty. I make no apology for naming him. He is a very good, fine community person. He often told me that his business was seriously challenged by those who did haulage runs at a much more competitive rate using illegal diesel, and who were not doing their patriotic duty.
I appeal to the Minister, as the economy frees up, to keep the maximum customs enforcement personnel on the Border. They will pay for themselves over and over again through the smuggling they stop. I look forward to his response on Second Stage. I also hope the dye initiative works and that, as the years progress, we can restore normal life on the Border and get back to a sane existence in which people go about their business in an ordinary way and fully take part in society.

Senator Joe O'Reilly representing Cavan & Monaghan 2010. | An ExSite website