Examination of Witnesses (Questions 140
- 159)
WEDNESDAY 24 MARCH 1999
MR MIKE
NORGROVE, MISS
HEATHER MASSIE
and MR BILL
LOGAN
140. Ever?
(Mr Norgrove) I have got no evidence of our ever
having pulled out of an operation or prospective operations for
fear of our safety.
Mr Hunter
141. Forgive me, Mr Norgrove, for pressing
you on this but I notice that three times you used the expression
"We have no evidence", but with regard to the members
of your staff, have you received allegations or interpretations
as opposed to evidence?
(Mr Norgrove) I am not aware of any such allegations
but I ought to check with the Collector.
(Mr Logan) I think that it is clear that over
the years we have worked throughout the whole of the Province
in a range of duties and we have continued to go throughout the
whole of the Province. There are occasions when levels of activity
are such in certain areas that the managers of the staff would
not allow them to go into a particular area at that time. However,
as far as the revenue matters are concerned, certainly I am not
aware of us not being able to pursue the matter, albeit it may
take longer in order to do so.
Mr McCabe
142. I think, as one of my colleagues indicated
earlier, obviously we heard some criticism from the Legitimate
Oil Pressure Group about your performance. I wonder if I can ask:
how would you describe the level of support you get from the trade
in terms of your effort to detect and stamp out smuggling?
(Mr Norgrove) I will give my view first, if I
may.
143. Yes?
(Mr Norgrove) My view is that the relations between
the two parties are very good and that co-operation between the
two parties is very good. The evidence on which we can act is
sometimes not always there and that must be frustrating for those
involved in this industry in the North of Ireland.
(Mr Logan) I would very much support that and
I think we started from a position of recognising the frustration
that was within the industry and attempting to discuss it. I think
that we would now attempt with looking at our whole strategy to
look at how best we can work together. I think there are areas
where we can communicate better with the trade and equally I would
expect that there are areas where the trade could communicate
better with us.
144. Would it be right to say that, allowing
for the fact that there are areas, as you have just indicated,
where you might have some improvements, would it be fair to say
that you are happy with the level of support and it has improved
over a period of time, is that accurate?
(Mr Logan) I have noted a very considerable improvement
and particularly by some of the members. They have been very,
very constructive.
145. What about the public view of fuel
smuggling? Do you detect any change in the public's attitude towards
the smuggling of fuel?
(Mr Logan) In terms of the number of telephone
calls and the number of particular events where we are invited
to talk to public groups, there is a greater interest and greater
awareness. I think that is the one additional issue that we would
wish to get on to the front foot and communicate with the public
in order to bring them in and make them aware of what we are doing.
146. You do not have the impression there
is any greater tolerance of fuel smuggling on the part of the
public but if anything the reverse, is that accurate?
(Mr Logan) I think that it is clear that there
are people, particularly in border areas, who are benefitting
from their cross-border legitimate travel, it is a talking point
day and night throughout Northern Ireland, but I think that there
are lots of anecdotal issues and I think one has to be very careful
about precisely what the issues are. I think that is the area
that we can help and improve the communication with the public.
147. If I can just ask about a slightly
different area. I understand that one of your objectives is to
identify and recover the proceeds of oil smuggling. I wonder really
what sort of success you are having in this area and how much
you involve other agencies like, in particular, the Inland Revenue?
(Mr Logan) As far as I am aware, the proceeds
from oil, and we have taken a policy decision that all seized
vehicles are not returned, they are disposed of and that in itself
has been an issue as to where and how, etc., however, as far as
the assets are concerned, we have provision but it has to be under
criminal investigation or criminal prosecution. In those particular
cases, yes, we will be seeking to confiscate the assets.
(Mr Norgrove) Through you, Chairman, if I may,
Mr McCabe, you will be aware of the Government's initiative on
confiscation of assets on which there has recently been a consultation
through the Home Office. I think the period of consultation has
ended now. The Home Office are now evaluating the contributions
they have. We will need to play a part in that and see what role
that unit might have for us or us for them.
148. Is there any evidence from the equipment
you are able to seize at the moment, I am thinking particularly
about the vehicles that you have cited, is there any evidence
that this support has any deterrent impact on the smugglers?
(Mr Logan) It is very difficult to give any hard
evidence in that sort of case.
Mr Hesford: In terms
of practical measures, what advantages, if any, would accrue from
(1) having a licensing system for distributors of oil products
capable of use in road vehicles?
Chairman
149. If this is a question you would rather
give a reflective answer on hereafter please do not hesitate to
do so, says I taking the matter out of Mr Hesford's hands.
(Mr Norgrove) I think we need to think about that
to give you a proper answer.
Mr Hesford
150. You may want to think about this one.
Same idea: reverting to charging excise duty ex depot rather than
ex refinery?
(Mr Norgrove) That is a difficult one for us because
I think that the constraints of European law would possibly impinge
on us here.
(Miss Massie) If I understand you correctly, the
question that you are asking is whether there would be a benefit
in essentially moving the duty point further downstream so that
instead of the duty being charged when the product left the refinery
it would be charged when it left the distribution depot. Generally
speaking, we found that the move of the duty point quite a few
years ago back to the refinery enabled us to tighten our controls
because there was less duty suspended product in circulation,
it was not stored in warehouses and it was not being moved between
warehouses and everything outside the refinery gates should be
duty paid. But in the context of smuggling across land boundaries
I think I would like to take up your offer to reflect on whether
there might be any advantages there and we could revert to you
on that.
151. Thank you for that. Whilst you are
doing that could you also take into account, and perhaps deal
with, whether or not either of those positions would be an excessive
on unwarranted additional burden on the trade.
(Mr Norgrove) We will certainly include that in
our deliberations.
Mr Hunter
152. We have been told many times that diesel
and gas oil (red diesel) are chemically very similar and the washing
process can take place but within the United Kingdom jurisdiction,
forgetting in the Republic that there is a duty discrepancy of
high duty on diesel and low on red diesel, do you have any evidence
of washing of red diesel within either Northern Ireland or the
United Kingdom as a whole?
(Mr Norgrove) We have evidence of laundering and
washing on both sides of the water.
153. Can you quantify it at all or could
you in correspondence later?
(Mr Norgrove) I could not do it today certainly
and if we can do I will happily write to you.
154. What would be interesting is to see
how the figures compare with the changes in the duty levels over
the past few years.
(Mr Norgrove) Yes.
(Miss Massie) I think we will certainly, as Mike
Norgrove says, look at it but one of the fundamental problems
with this is that it is always extremely difficult to estimate
the extent of any illegal activity. We obviously can look at our
success in countering laundering but it is always extremely difficult
to quantify what we are not detecting.
(Mr Norgrove) What we might be able to help you
with is when we have, say, stopped a vehicle and subjected its
fuel to scientific testing, then in those instances where there
is evidence not just of use of rebated fuel but use of washed
rebated fuel, we should have figures on that.
155. Still on this subject of washing or
laundering, obviously a chemical or chemicals are needed to perform
that process. A very considerable volume of red diesel is being
laundered or washed. That means quite significant quantities of
chemicals are being used in that process. Is there any way, do
you think, of monitoring the sale of substances which could be
used in washing and laundering red diesel?
(Mr Norgrove) That is something that would be
outside our formal bailiwick.
156. I am asking for an opinion.
(Miss Massie) I believe that, in cases in the
past, instances of extremely large purchases of unusual materials
have been a factor in intelligence which have led to successful
detections. So it has been a factor in the past but I think it
arises less from regular monitoring than from the observation
of an unusual activity, possibly the sort of thing that one might
detect on a VAT visit.
157. I think we put this question to various
other witnesses but maybe you can speak with some authority on
this. What is the evidence of the quantity of smuggled fuel which
originates in the Republic finishing up in Great Britain as opposed
to Northern Ireland? Is that yet happening?
(Mr Norgrove) We have some evidence of that happening
but on a very small scale so far. Although there are a lot of
anecdotes about it we have very little evidence of that having
happened although there have been one or two instances of fuel
having been seized at Liverpool.
158. Presumably the additional cost of transport
is something of a disincentive?
(Mr Norgrove) I think that must be one factor.
159. What might be the others?
(Mr Norgrove) I suppose it is the difference between
a tanker travelling along the roads of Northern Ireland for example,
which in itself is not exceptional, whereas on ferries from the
North to liverpool it is a much rarer occurrence so it would tend
to stand out like a sore thumb.
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