British MPs disappointed at progress of clampdown on North’s fuel launderers

A powerful committee of British MPs has expressed bitter disappointment at the lack of progress on new measures to tackle fuel fraud in the North.

Customs officials should redouble efforts to acquire the latest marker technology to prevent rebated diesel from being sold at higher prices by criminal gangs and paramilitaries, the Northern Ireland Affairs Committee added.

Launderers who remove the dye to allow the sale of cut-price agricultural diesel to ordinary motorists cost district councils £330,000 (€397,156) for waste removal during the last five years, the committee’s report said.

Laurence Robertson, chairman of the Northern Ireland Affairs Select Committee, said: “We are bitterly disappointed at the seemingly slow pace of progress on acquiring effective technologies to tackle fuel crime.”

He urged Revenue and Customs to focus on acquiring the latest and best rebated fuel marker technology as soon as possible, commence a pilot scheme and report back to the committee before summer.

The North is estimated to have lost £70m in tax revenue due to fuel fraud in 2009/10, down from £250m five years ago.

While 4% of diesel sold in Britain is illicit, in the North the comparable figure is 12%.

The report said: “The problem is also particularly acute in Northern Ireland because of links between organised criminal gangs and paramilitaries.”

Revenue and Customs conducts random roadside testing of vehicles using technology developed in-house. The committee said it was recognised that the effectiveness and deterrence value of this testing programme would be greater if the marker added to rebated fuel was much more difficult and expensive to remove.

Revenue and Customs told the committee it is trying to strengthen the current marker and its testing methods.

Mike Norgrove, a director at Revenue and Customs, told the committee he thought current marker technology improvements would at least double the cost to launderers of removing it.

The improved marker, using the same technology, should be in use by the end of this month.

Yesterday’s report added: “We are disappointed that it has taken three years to get to this point.

“We are bitterly disappointed that, even at this late stage, the move by authorities in both the UK and the Republic of Ireland to have a single tender procedure for a marker for rebated diesel is still no further forward.”

The committee is also concerned at the apparent limited success of assets recovery as a deterrent, exacerbated by the poor record for imposing custodial sentences. Between 2001 and 2009 only four people received prison terms in the North, a worse record than in Britain.

Mr Robertson added: “Fuel fraud is carried out by organised criminal gangs, some of whom have paramilitary links and are engaged in the most serious crimes: drugs; human trafficking; money laundering. Buying and selling illicit fuels funds these activities.”

Revenue and Customs was given an extra £917m (€1097m) in 2010/11 to combat tax avoidance and evasion across Britain.