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Until recently, red diesel laundering
Page 37
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has been mostly V. concentrated in orthern Ireland he rest of the rgely escaped
it effects. owever, plants have recently rted springing the mainland tw-if you haven't offered some chances are ou will soon. iles Brignall reports.
magine you're sitting in the pub and a man offers you a load of half-price diesel. A tanker would arrive early one morning, fill up your bunker and, a wad of cash later, he'd be away. Two days later the fuel would be used up and the fraud long forgotten. It doesn't take much imagination to see that to a haulier in financial difficulty, this could be a very tempting offer— and one likely to be facing more UK operators in the future if the huge rise in seizures of red diesel plants is anything to go by.
Over the last five years red diesel laundering and cross-border fuel smuggling have become such a part of everyday life in Ireland that some vehicle owners may not have bought a legitimate litre of fuel for years. Run by paramilitary groups from both sides of the sectarian divide, the proble.m was effectively allowed to get out of hand as the authorities chose to concentrate on the more pressing matter of containing terrorism. The fact that these rackets were run by some very dangerous people, often in remote areas, made it difficult for Customs 8, Excise, and even they would admit they lost control for a time
Customs has estimated that in the year 2000, the revenue lost from use of non-UK duty paid petrol and diesel in Northern Ireland was approximately £38.0m: Li5om on petrol and /23om on diesel. While some of this was the result of legitimate cross-border shopping, most was due to the smuggling of fuel from the Republic and the misuse, laundering and mixing of rebated and duty-free fuels. Given the sums it is no surprise that Customs decided it had to take action in Northern Ireland. Since April 2000, Customs has increased the number of staff tackling this form of fraud from 25 to 16o. Seizures of fuel since have more than doubled, vehicle seizures have trebled, and in the first 18 months 12 plants fur laundering the chemical markers in rebated fuels were dismantled. However, this was nothing next to more recent successes. In June this year, officers uncovered four red diesel laundering plants in as many weeks.
The last one was typical. Situated in farm buildings on the outskirts of Cookstown, Co. Tyrone, it had sufficient capacity to process over roo,000 litres of diesel per week. Officers seized around 47,000 litres of laundered fuel and an estimated f5o,000 of pumping, storage and filtration equipment. The trail also led them to close three filling stations, seize over ioo vehicles and arrest two local men.
While it is difficult to judge whether Customs has really cracked the problem of fuel laundering in Northern Ireland, the House of Commons Northern Ireland Select Committee recently noted that sales of legitimate fuel had gone up for the first time in five years.
Where did it go?
One question that has never really been answered is where does all the fuel end up? Many of the Irish plants have been producing so much laundered fuel that some of it must have been exported both to the UK mainland and to the Republic. The Northern Irish economy simply isn't big enough to absorb that much illegal fuel and over the years CM has received a number of unsubstantiated reports of hauliers using bulk food tankers to import cheap diesel from abroad.
What is clear is that the problem has now arrived on the mainland UK. It appears that the launderers, fed up with losing equipment in Northern Ireland, have crossed the Irish Sea to continue operations over here.
Until relatively recently the great majority of oils fraud in the rest of the UK involved the misuse of red diesel and kerosene, the latter being intended for domestic heating and carrying no duty at all. Customs estimates the losses resulting exclusively from
diesel fraud in z000 to have bee: around f45om, the equivalent c 4% of the mainland UK marke.
However, all the indications ar that these figures are set to rise The Northern Ireland Select con mittee recently reported that it ha evidence that showed the parami itary groups had joined forces wit organised criminal gangs to set u a number of laundering plant across the UK. Often combine with other activities such as cigz rette smuggling, fuel launderin over here appears to be followin the pattern set in Norther Ireland. In the past few month. Customs have had some succes in shutting plants down on th mainland, but history sugges1 these are just the tip of the iceberi In June. Customs office] uncovered two illegal fuel-lam dering plants in Lancashire. Bot were designed to make appa ently legal road fuel by launde ing red diesel and mixing it wit kerosene. Each contained sophi ticated equipment designed 1 produce thousands of litres week. Operation Jackrabbits sa Customs raid a farm at Unswort near Bury and seize two artici lated tankers, a van, a 4x4 vehicl 8o , 000 litres of illegal fue 4,000 litres of acid sludge ar sulphuric acid as well as all ti laundering equipment. CM h; heard rumours that there are se eral other plants operating in ti Liverpool area and there a: bound to be more springing u Some criminals are not eve bothering to launder it. In Api Customs officers seized nearly 4 vehicles after uncovering a re diesel distribution racket in Son Wales. In that operation they co fiscated a tanker and 7o,oc litres of red diesel that was de tined for road use. Recent sirnil successes have occurred Plymouth and East Anglia.
Name and shame
When Customs catch an operat they seize the vehicle and I them with a large fine, b because the process rarely goes court— it's quicker for Custon and usually cheaper for ti haulier—operators are effective given anonymity. Legitima operators have long argued th anyone caught using red or lau clered diesel should be exposed customers and peers and it is d ficult to argue with this. After every operator knows what redt ing their fuel bill would do their profitability.