A full-time force should be established to eliminate organised crime gangs involved in illicit cross-border fraud between the North and the Republic, a meeting of politicians from UK and Ireland said.
Revenue and customs commissioners north and south and criminal asset recovery and environmental agencies should be involved in the crackdown on duty free fuel and tobacco (inset), the British/Irish Parliamentary Assembly (BIPA) said.
It added on-the-spot fines could be introduced for consumers found to have knowingly bought the commodities.
Cigarette fraud alone cost the Irish Exchequer up to €575m in 2013 while the UK's "tax gap" from tobacco smuggling was £2bn in 2012/13, a report from the BIPA said.
It added: "The committee recommends that the cross-border enforcement groups establish a permanent, full-time taskforce dedicated to eliminate the activities of organised crime gangs involved with cross-border illicit trade."
The BIPA includes Westminister MPs, TDs of the Dail, the Stormont assembly and legislatures in Scotland and Wales.
It met in Leinster House yesterday.
Lucrative black market smuggling has been a problem for many years.
A new unrinsable fuel marker is to be added later this year to try to curb the incidence of diesel laundering.