Ship seizure costs Revenue €410,000, mostly in Dublin berthing charges

A ship seized four years ago with illegal cigarettes and tobacco has cost the Revenue Commissioners €410,000 and they cannot sell it because it contains asbestos, according to the State’s financial watchdog.

The Comptroller and Auditor General (C&AG) found that most of the cost was linked to berthing fees charged by Dublin Port Company.

It also reported that an estimated 13 per cent of cigarettes smoked in Ireland are deemed illegal and that Revenue puts the loss of income at €229 million.

The auditor noted the Project Sun – European Union, Norway and Switzerland – survey that Ireland has the third highest rate of counterfeit and contraband cigarettes in the EU in 2016 at 17.5 per cent.

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The State also has the highest cigarette price in the EU at €12, and second highest after Norway (€12.30) in continental Europe.

In an assessment of Ireland's progress in tackling tobacco smuggling the C&AG highlights a costly case for the Revenue when it seized the MV Shingle in June 2014 at Drogheda Port in Co Louth, with 32 million cigarettes and 4,000kg of tobacco.

The consignment, which came from Slovenia via Portugal, represented a potential loss of €13 million to the exchequer.

The vessel was transferred to Dublin Port but could not be sold for another three years until legal proceedings, including an appeal, were completed.

Revenue initially planned to sell the vessel but in poor condition and containing asbestos it was to be disposed of instead through specialist recycling.

Liability

A marine surveyor in 2015 warned that the vessel was “nothing but a liability” and that “if arrangements are not made to deal with the ship within a reasonable time span, there is the potential of substantial additional costs being incurred”.

Three years later, by August 2018, the Revenue had incurred costs of €410,000, most of it charged by the Dublin Port Company for berthing.

The C&AG said recycling costs were likely to be “significant in light of the costs already incurred by Revenue”.

Revenue seized four ships and 265 vehicles between 2013 and March this year and €556,243 in cash.

The commissioners took fewer summary prosecutions in 2017 but had a higher rate of conviction than in previous years and more indictable prosecutions with fewer convictions.

Last year, cigarettes and tobacco valued at more than €20 million were seized, with a potential loss to the exchequer of more than €16 million in taxes and duties.

However, the number and value of seizures has dropped from close to 10,000 in 2012 worth €40 million, to 4,000 worth €20 million last year.