Cross-border Crime

Naomi Long Excerpts

Wednesday 11th March 2015 Commons Chamber

[Dr William McCrea (South Antrim) (DUP)]

I beg to move,

That this House notes with concern the continued prevalence of serious organised criminal activity in Northern Ireland on a cross-border basis in relation to fuel smuggling, fuel laundering and the counterfeiting of consumer goods; recognises that this has had a significant and detrimental impact on HM Treasury; regrets the lack of prosecutions in relation to this activity; and calls on the Government to ensure greater co-operation between HM Revenue and Customs, the National Crime Agency and the PSNI so that this criminal activity can be eradicated.

It is a great pleasure to move the motion tabled by my right hon. and hon. Friends.

According to the Home Secretary, organised crime costs the UK at least £24 billion a year. In Northern Ireland, police assessments indicate that there are more than 140 organised criminal gangs in operation. We are all acutely aware of the audacious attempts by such gangs to carry out all sorts of crimes, including the laundering and selling of illegal fuel, and the counterfeiting of consumer goods.

Although the criminals respect neither borders nor victims in their illegal pursuits, Northern Ireland is unique within the United Kingdom in that it shares a land border with a foreign country. The findings of a recent British-Irish Parliamentary Assembly report show that law enforcement agencies in both jurisdictions work together; that illicit trade and smuggling are some of the largest challenges faced by cross-border agencies; and that the number of border area fuel laundering plants, and the number of filling stations selling illicit fuel, is alarming. The report called for a cross-border approach with a permanent multi-agency taskforce to deal with illegal activity and to tackle tobacco fraud, and for legal changes to prevent filling stations prosecuted in connection with illegal fuel from reopening within months of conviction.

I echo the comments made by Fine Gael TD Patrick O’Donovan when he spoke in a debate at the British-Irish Parliamentary Assembly on the report. He said that authorities were turning a blind eye to illegal activity in the border area, motivated by an “appeasement” process of replacing the cowardly butchery wing of the IRA with the racketeering wing, in what has effectively been considered a bandit area, which has helped to support claims that the Real IRA is the ninth richest terror group in the world.

Fuel laundering is currently worth around £400 million a year in lost tax revenues in Great Britain, and £80 million in Northern Ireland, where the problem is particularly acute. According to Mr Pat Curtis, a senior official at Her Majesty’s Revenue and Customs, organised crime gangs have established sophisticated laundering plants to remove the giveaway dye, sourcing chemicals from China and using the internet to improve their techniques.

Figures for 2012-13 indicate that the illicit market is worth 13% of the total. HMRC is responsible for investigating fuel fraud, including fuel laundering—as part of that work, it cleans any sites it uncovers—but in 2012 the Northern Ireland Environment Agency commenced a fly-tipping pilot in partnership with local councils. Between June 2012 and January 2015, Antrim borough council, which is in my constituency, had one fly-tipping incident. The cost incurred by NIEA was £346.76. In the same period and in stark contrast, Armagh city and district council had 114 incidents at a cost of £266,743.65, and Newry and Mourne district council had 198 incidents at a cost of £585,333.94. Those figures are startling.

In 2013-14, some 38 fuel laundering plants were dismantled in Northern Ireland compared with 13 plants in 2003-04. Although a fuel laundering plant is detected every 10 days in Northern Ireland, and despite the fact that this criminality is filling terrorists’ coffers and bankrolling the IRA and Real IRA, no one has been jailed for fuel fraud since 2002. Such statistics are preposterous, and the Northern Ireland public have a right to know whether that is the price of keeping republicans bought off for the sake of the peace process, or whether fuel launderers are tipped off ahead of raids.

[Naomi Long (Belfast East) (Alliance)]

One challenge is that the nature of the fuel laundering process means that people do not need to be present. Part of the difficulty is catching the right evidence. The Northern Ireland Department of Justice is trying to ensure that evasion of the duty becomes a criminal offence so that people can be put in jail for it. That is much easier to prosecute.

[Dr McCrea]

I thank the hon. Lady for that helpful comment. I trust that that will be a warning to those participating in that illegal activity.

--- Later in debate ---

[Naomi Long (Belfast East) (Alliance)]

I pay tribute to the hon. Member for South Antrim (Dr McCrea) for bringing this motion to the House today. This important issue is often overlooked because in many ways it is a hidden crime, and, as the hon. Member for Amber Valley (Nigel Mills) said, it is often viewed as a victimless crime. It is anything but. It is important that as well as trying to combat it through the various agencies that have a role in addressing organised crime, we communicate carefully with the public about their role in combating it and about the risk it poses to them. People often simply see cheaper goods and that is the only aspect they see of organised crime; they do not see the risks to them, the other criminality that goes with it, the danger, or the money taken from revenue that would otherwise be invested in services.

Obviously this is a complex area. Others have mentioned how difficult it has been to secure convictions, and I shall move on to discuss that. First, however, I pay tribute to the law-enforcement agencies for the work they are doing on both sides of the border. A complex collection of agencies has to deal with this complex area of crime. We have the Police Service of Northern Ireland, Garda Siochana and the National Crime Agency. We welcome the fact that we now have the additional resource of the NCA, because while we focus on one border, criminals operate across many borders, so having that national organisation involved is hugely important. Her Majesty’s Revenue and Customs, Revenue commissioners and Border Force work closely together in order to share intelligence, to disrupt those who try to perpetrate crimes and to ensure that they are eventually brought before the courts. When people are brought before the courts for participation in organised crime or for benefiting from taking goods that are clearly only available as a result of organised crime, the penalties should be a deterrent.

The impact of fuel laundering has been discussed at considerable length. The scale of the problem in Northern Ireland is undeniable. Fuel laundering is not just a cross-border issue: the uncollected revenue from fraudulent diesel in Northern Ireland was estimated by HMRC to be £80 million in 2012-13, which is 13% of the overall market share in Northern Ireland. That is a significant sum of money, especially when we compare it with the GB figure for illicit market share, which was about 2% in the same year. That gives us a clear indication of the scale of the problem, but it is not just a Northern Ireland issue, because that revenue is being denied to the UK as a whole. There is a genuine interest here in Parliament to address the issue robustly, because it is Great Britain’s schools and hospitals as well as our schools and hospitals that lose out as a result of the revenue not being collected.

The nature of fuel laundering means that sites themselves are not regularly attended, which can make it difficult to establish a clear link to the perpetrators. In Northern Ireland, we often say that everyone knows who does things, but knowing and proving are two different things when it comes to the law. Part of the strategy is to disrupt those who are involved in illegal activity, and part of it is to try to catch them. Trying to balance those two things can be very difficult. It is often hard to make that clear link to the perpetrators. It requires the seizure of records and the scene of crime work, which is complex and slow. Prosecutions in this field often do not come to court for many years after the breaking up of the illegal fuel laundering plant.

There has been an increase in the number of fuel laundering plants dismantled—the number has risen quite quickly over the past few years. There has also been an increase in the number of convictions, but the problem is that not one person has received a custodial sentence of more than 10 years, which seems ludicrous given the impact that the crime has on society.

The challenge in making arrests and obtaining the evidence is something of which the Department of Justice and my colleague David Ford are fully aware. As the Minister rightly said, the Department of Justice has introduced legislation adding the evasion of duty in relation to fuel and tobacco to the list of offences that can be referred by the Director of Public Prosecutions from the Crown court to the Court of Appeal when a sentence is considered to be unduly lenient. That does not resolve the issue entirely, but it does mean that there is a fall-back position when judges are seen not to have taken seriously enough someone who is brought before them in connection with these crimes.

[Dr McCrea]

Does the hon. Lady accept that there is another difficulty? In the instance I mentioned, laptops and documents were destroyed or burned before HMRC arrived at the scene. The concern was that there had been a tip-off.

[Naomi Long]

There is no doubt that that is a concern, and it has been a concern for some time. There is evidence that when HMRC or the PSNI has turned up on site, people have scattered and taken with them some of the critical evidence, which suggests that they were aware that those organisations were coming. Obviously, we can look at that in two ways. The first is that someone could be tipping off those launderers. The alternative is that these are complex organisations that have their own intelligence. They are observing the movements of the police, HMRC and others in the area and may well become aware that operations are moving against them. In some ways, we need the intelligence on the legal side of the fence to be much more robust than the intelligence on the other side. We should not rule out the possibility that the criminals themselves are gathering intelligence about what is happening in their neighbourhoods that helps them to evade capture.

I want to move on to the wider issue of the impact of this crime. I have referred to the fact that this is not a victimless crime, and it is worth talking now about some of the victims.

[Dr Murrison]

The point about intelligence is well made. It is important not to provide organised criminals with information if we can possibly avoid it, which recalls the letter from my right hon. Friend the Member for Loughborough (Nicky Morgan) to the Chair of the Northern Ireland Affairs Committee. I have not seen the letter so cannot comment on it in any detail, but I think it is probably wise not to put such a letter in the public domain if it would give succour to organised criminals. We must be careful not to display our tactics and what we do to those who might wish to make use of them in a way that is contrary to national security or good order.

[Naomi Long]

I understand the Minister’s point, but there is a wider point about how Members can raise their concerns about these issues. They have done so via correspondence and in private evidence sessions, as the Northern Ireland Affairs Committee has done here with Her Majesty’s Revenue and Customs and in other places. It appears not to have been taken seriously. That is the concern expressed by Members on this side of the Chamber. I certainly would not wish to put anything into the public domain that would give any succour or encouragement to any criminal; neither would I want to rely on a marker if there was evidence that it could be easily removed.

We also need to acknowledge that this is a multi-billion pound business for the people involved. Whatever marker is used, they will invest in the technology that will allow them to evade it. All that we are trying to do—all that we can ever do in these circumstances—is stay ahead in the game. We need to be realistic about the fact that when it comes to protecting the public, what we are trying to do is stay ahead of the criminals in the technology we use: they will no doubt be chasing that technology as soon as it is included as a marker.

As I said, I want to move on to the wider issue of the impact on the victims. I have already mentioned that this is not a victimless crime. I want to talk about the wider impact of fuel smuggling and fuel laundering and the wider counterfeiting of consumer goods. The motion ranges slightly wider than fuel, although fuel obviously exercises us all because of its significance. There are two separate but linked issues. The illicit and counterfeit goods themselves have an element of risk attached to them. They defraud the public. People often purchase inferior goods in the belief that they are getting the real thing, and that in itself can be extremely dangerous.

For example, when fuel is stretched rather than laundered or smuggled, it can seriously damage vehicles. Often the people who purchase it are unaware that it has been stretched. There are two classes of people in that regard: those who know that they are buying fuel at a ridiculously low price and that they are risking their vehicles; and those who stop at what looks like a reasonable petrol station and purchase fuel, only to find out subsequently that it has damaged their vehicles because it was illicit. That is a different issue, but it causes real damage to vehicles, and is the public need to be made aware of that. Frankly, it may well provide a bigger deterrent against buying laundered fuel than almost anything else we could say to motorists.

Counterfeiting also places the public at risk in other ways. Reference has already been made to the discovery that some counterfeit cigarettes contain asbestos. Counterfeit cigarettes sold in Northern Ireland in the past have been found to contain arsenic. The people who make these products do not really care what goes into them or what impact they might have on health. When people purchase counterfeit and illicit goods, they are placing themselves at considerable risk. Another example is that of products made of flammable materials being brought into the household. People might think that those products meet the regular standards, unaware that they are actually bringing materials into their home that could put their family at serious risk.

I also want to highlight the conditions of those involved in counterfeiting these goods, because often they are being held against their will in other countries, having been trafficked as slaves in order to produce them. The abuse often reaches much further than consumers and the public here in Britain; it also affects those producing the goods further afield.

As the hon. Member for East Antrim (Sammy Wilson) rightly, if rather surprisingly, said, significant environmental damage is caused when people get involved in fuel laundering. The mess that is left around the countryside in Northern Ireland not only costs millions of pounds to clean up but will take many years to be ameliorated. It will leave an almost indelible mark on parts of our countryside, on our water supply, and on many other things, so these illicit and counterfeit goods have a significant impact on the public.

The other aspect is smuggled goods—the stuff that is brought in through smuggling routes. Those who open up those routes do so not for one particular set of goods; once they are available they will use them for anything. When they have good routes for smuggling fuel, consumer goods or cigarettes, we can be sure that they will use the same routes for smuggling people and drugs—and all human misery is there. It is about opening up routes around the world so they can smuggle goods, and they do not care whether it is people or goods being trafficked.

In all cases, whether counterfeiting and laundering or smuggled goods, people are evading their tax and Revenue payments. That brings us back to the issue of robbing public services. Those who purchase cheap cigarettes or cheap petrol and diesel, and thereby counterfeit goods, may think that it makes no difference. However, when they turn up at the hospital and face long waiting times for accident and emergency services, or cannot get a bed and are lying on a trolley for 48 hours, they should realise that those problems are due to money not going to the Revenue. We have to be honest with the public and say: “You are only stealing from yourself when you purchase goods in this way; you are not doing anything to help your own situation.” We need to try to disabuse people of the notion that this is a victimless crime.

In Northern Ireland, as several hon. Members have said, this has a more sinister element in that much of the money raised in this way is being funnelled into further illegal activity and, in particular, paramilitary activity. That should be a matter of concern to us all. We want a stable and peaceful future, but most of all we want a safe and secure future for the people we represent. We need to say to people: “When you purchase smuggled goods at the petrol pump or elsewhere, bear in mind the fact that you are putting money in the pockets of people who are quite happy to set out with murder in mind and take lives for political gain. Those are the people who benefit from this.” It is not only republicans but loyalists who are willing, through organised crime, to work in drug smuggling, drug dealing, counterfeiting, and all the other things. Criminals will work together where there is money to be made. That will be more important to them than any political objectives they may claim to have, and much more important than the lives and the security of the people in their communities.

It is important in this debate that we spend a little time considering the fact that this is not a victimless crime but a complex and difficult one that requires a multi-agency approach. I have no doubt that the agencies are pushing very hard to bring it to an end, but we need to secure public support. With that support, it will be much easier to find those who are behind these smuggling rings, hold them to account in the courts, and see them serve jail time for what they are doing. I commend the hon. Member for South Antrim for bringing this motion to the House.