The Provisional IRA got three-quarters of its funding from smuggling fuel illegally into Northern Ireland, an investigation by the British government revealed in 2000.
Dissident republicans also made hundreds of thousands of pounds from the practice, as well as criminals, according to internal cabinet documents released by the National Archives in London.
Then Northern Ireland secretary Peter Mandelson said the 30 per cent difference in fuel prices between the Republic and Northern Ireland at the time, as well as a favourable exchange rate, meant terrorists could profit by buying fuel in the Republic and bringing it across the Border.
“Quite apart from the substantial loss to the exchequer, I am concerned about the implications of this level of smuggling in the financing of terrorist organisations,” he wrote in a memo to the chancellor, Gordon Brown.
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IRA got 75% of its funding in 2000 from fuel smuggling, UK inquiry found
“The largest terrorist group in Northern Ireland, the Provisional IRA, gets almost three-quarters of its funding from smuggling fuel into Northern Ireland. The ‘real IRA’, the perpetrators of the Omagh bomb outrage, also raises hundreds of thousands of pounds from this source, while other criminal elements use the system to defraud the exchequer of enormous sums.”
In the autumn of 2000, fuel shortages brought Britain to a virtual standstill as protests over prices led to the pumps running dry on many filling station forecourts.
Mandelson said that there had not been the same level of protest in Northern Ireland but an investigation into the level of fuel duty had led to “disturbing” results.
The Road Haulage Federation had told him that many operators were buying fuel in the Republic and bringing it into Northern Ireland in order to stay in business at a time of widespread smuggling.
Mandelson said that he wanted to stop terrorist groups operating in this way and generating so much money in the process. The general public perception, he said, was that there had been a lack of government resources committed to tackling fuel smuggling.
“I strongly believe that a concerted attempt must be made by all statutory agencies to tackle smuggling and I hope you will actively support this,” he wrote to Brown.