Countryside near Castlederg, Co Tyrone, part of a former smuggling route covering both sides of the Irish border (Michael McHugh/PA)

Washing powder smuggling across the Irish border is becoming an issue, Westminster's Brexit committee has heard.

The revelation came as a number of high-ranking Northern Ireland business representatives met with the House of Common's Exiting the European Union Committee in London.

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Business representatives warned that changes to customs rules and regulations between Northern Ireland and the Republic of Ireland could lead to greater fraud and smuggling following Brexit.

There is a lack of certainty around the customs arrangements for Northern Ireland following Brexit on March 29 2019.

In the event that Northern Ireland exists the EU customs union and single market there are likely to be greater trade differences between Northern Ireland and the Irish Republic.

It has been speculated that this could require further security and customs checks at the Irish border, although both the European Union and UK government have said they want to avoid this.

Former head of the Northern Ireland branch of the Confederation of British Industry Declan Billington explained that there was already a large fraud issue on the Irish border and warned that Brexit would only make it worse.

"If we have a border with tariff differentials then you can see for example, cheap meat coming in from Brazil would be packaged, remember horsegate, to come off as Irish. I don't think those people will be too concerned about food hygiene standards," he told the committee.

"Honest businesses will work the systems that are tabled, dishonest businesses will take advantage of any loophole. At the moment only three (tariff) differentials exist, food, tobacco and alcohol.

"If we bring a larger portfolio of things in due course then without strong enforcement we are at serious risk of having a serious fraud issue."

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Asked by Conservative MP Sir Christopher Chope if there were insufficient border checks in place at the moment, Seamus Leheney Policy Manager at the Freight Transport Association said that fuel duty had "decimated the transport industry in Northern Ireland".

Mr Billington said that more police and security on the border may reduce the fraud but that you then look at "going back to the bad old times" and that former paramilitaries would "play" on the division that would create.

Chief Executive of Manufacturing NI Stephen Kelly said there had been reports of washing powder "now making its way into the smugglers interest".

"When you begin to widen out the tariff differentials and the price differentials from one customs territory to another then there becomes an attraction for one group of people to try and mess that system up and start to input goods illegally. Because there's a huge price differential there's money to be made," he said.

"Right now we have a limited set because we share a set of common rules across a common market, once we begin to remove ourselves from that then we present much more opportunities to have many more items come in to the sights of those criminal elements.

"The likelihood is you would end up with the need for more security, more checks, more difficulties on the Irish border as a result of that.

Sir Christopher Chope said that the current situation was "licensed anarchy" and questioned why it was allowed to happen and suggested that it was a "double-standard" to say that post-Brexit there would be additional border issues given the ones at the moment.

Mr Billington said that there was ongoing cross-border work to minimize the existing issues and that "if you expand the range of opportunities, you expand the criminal element despite your best endeavours."

Belfast Telegraph