In Committee on Finance. - Customs-Free Airport Bill, 1947—Second Stage.

I move that the Bill be now read a Second Time. An explanatory memorandum has been circulated already to Deputies in which the main provisions of the Bill are explained.

The Bill marks a further stage in the development of Shannon Airport into what we hope will be one of the best and most up-to-date airports in the world. As Deputies are aware, it is intended to provide at Shannon all the facilities which the International Civil Aviation Organisation considers necessary at a main transatlantic airport. The expenditure involved represents a substantial commitment for a country of our population and size, and our willingness to undertake it shows that we recognise that the country's geographical position imposes on it a special responsibility in providing facilities of the high order required for a transatlantic service.

The establishment of a free airport at the Shannon is a logical development of the aviation policy that has been followed since the decision was taken ten years ago to build an airport there. The runways being laid down will take the largest aircraft in commercial operation and the terminal building to be erected and other facilities to be provided will be worthy of Europe's main transatlantic airport.

By this Bill we are making the Shannon Airport the first free airport in the world. The customs-free airport is, in a sense, an Irish invention and for that reason I should, perhaps, say something on how the idea originated. Air travellers have always found the delays imposed by customs and other formalities much more vexatious than travellers proceeding by sea or by rail. Air travel is much faster than surface travel and the delay involved in clearing customs, currency and passport requirements may represent a big proportion of the time taken on an air trip, whereas it is a relatively insignificant part of a sea journey that may take many days.

At an airport like the Shannon, where most of the traffic in passengers and goods is transit traffic, there is a strong case for cutting down to the minimum the time taken by these formalities. The Government are in full sympathy with the air companies and others interested in civil aviation when they urge that a relaxation of customs, passport and other restrictions imposed upon international travellers is essential in developing the full potentialities of air transport. The Government have, therefore, been concerned to ensure the most favourable conditions in that respect at Shannon Airport.

Under the Paris Convention, which has governed the international relations of some 33 countries, including this country, in the sphere of civil aviation for the past 25 years, there was no provision for the setting up of customs-free airports. In 1944 a new convention was drawn up at Chicago to replace the Paris Convention. We availed of the opportunity to secure international recognition in principle for the establishment of customs-free airports. Our representatives took the initiative in laying down requirements for customs-free airports at a number of meetings of the Provisional International Civil Aviation Organisation at Montreal where a special division was set up to consider measures for the facilitation of international air services. Having secured international agreement on the concept and requirements of a customs-free airport, we proceeded to prepare plans for Shannon. This Bill is designed to translate these plans into action. The Bill provides that goods and passengers in transit through Shannon airport will not be subject to customs examination. Passengers landing at Shannon eastward to Europe or westward to America will not have to present their baggage for customs inspection. Goods brought by plane to Shannon will be free from all customs restrictions so long as they remain within the boundary of the free airport. There will be no customs officials within the free airport and compliance with any customs regulations that may still remain in force will be secured not by officers of customs and excise but by officers of the Department of Industry and Commerce.

Besides the customs regulations applied at customs airports in common with sea ports and land frontiers, the staff of the Revenue Commissioners enforce other restrictions such as those designed to safeguard the public health and to prevent the spread of animal and plant diseases. In addition there are certain articles the importation of which is prohibited in pursuance of international conventions to which this State has adhered. There is provision in the Bill for the making of regulations reimposing these safeguards and prohibitions at the free airport and for continuing the present currency control so long as it may be necessary. The regulations required will be made in consultation with the other Ministers concerned and compliance with the regulations will be enforced by officers to be appointed for that purpose.

It is recognised, however, that the establishment of the free airport while conferring great benefits on air travellers and on those sending goods by air, also offers temptations to persons seeking to defraud the revenue. Accordingly, powers of search are provided. One of the chief difficulties experienced in drafting the Bill related to local traffic passing through the airport and to visitors at the airport. We did not want to impose customs examination on sightseers or on people travelling by air from Shannon to Collinstown. The problem has been met by setting aside as a customs area a portion of the terminal building and part of the landing field adjacent to it. Persons travelling by air from Dublin to Shannon will disembark in that area and will not have to undergo customs examination unless they wish to enter the airport to join an aircraft for a foreign destination. Visitors coming to the airport as sightseers or to meet their friends arriving by air will be allowed into the customs area, without examination. The accommodation in the customs area will include a lounge, a restaurant and an open space in which the operations can be seen. In order to prevent abuses it will be necessary to segregate transit passengers from disembarking passengers and from local visitors. The confining of visitors and disembarking passengers to the customs area will achieve that purpose. It will be possible to make special arrangements for persons who have particular business in the free port area to pass from one section to another.

Passengers or goods entering or leaving Ireland via Shannon will pass through the customs as at present. As goods may be brought free of duty into the customs-free airport from abroad and stored there, it is thought it may be of advantage to the United States and other commercial interests to set up depots at the airport from which delivery may be made by air, to meet urgent orders from any of the many parts of Europe and North America which have direct air communication with Shannon. It is also hoped that some manufacturers may find it desirable to undertake within the free airport the packing, processing and rehandling of goods. Developments on these lines will be welcomed and every reasonable facility will be given to exporters and manufacturers who desire accommodation there. Already, even before the establishment of the free airport, a fair amount of freight is passing through Shannon. Some of the cargoes despatched from there have a very particular interest for this country. Deputies will remember, for example, the racehorses which were shipped to the United States and the shipment of greyhounds to France. It is difficult at present to assess the prospects for the carriage of freight by air, but there certainly are possibilities. It will be clear that we are anxious to encourage this development. Shannon, as I have said, is equipped to take the largest aircraft at present engaged in freight services. The developments contemplated will ensure that it will continue to be able to cater for all types of cargo aircraft that may be employed for many years to come.

As there is no similar legislation in existence here or elsewhere, some provisions of the Bill may have to be amended in the light of experience. Quite a few problems have arisen in drafting the Bill but it has been possible to surmount them because of the co-operative spirit in which they were approached by all concerned. In that connection, I might mention that the Revenue Commissioners have taken a large part in the study, by the Provisional International Civil Aviation Organisation, of the general question of facilitating international services, as well as in drawing up plans for our free airport. I have no doubt that the same co-operative spirit will enable us to overcome the difficulties that will arise in putting into effect the provisions of the Bill. I should say that all the air lines operating through Shannon have been most helpful in working out a satisfactory scheme and we can, I think, count on their continued collaboration. I am confident that if the Bill is passed, we shall be able to show the way in relieving air traffic passing through Shannon airport of some of the restrictions which air travellers all over the world are united in deploring.

We are glad to know that it is possible to make arrangements to make it easier for travellers passing through this country to land here and to get away with as little inconvenience and trouble as possible, and we welcome a movement in that direction and hope it will extend. I should like to hear from the Minister approximately what area it is contemplated will be assigned for this airport.

The customs-free airport?

Yes. The Bill says that only lands which are State lands will be used as the customs-free airport at present. I should like to know approximately what the extent of the customs-free airport will be and approximately what is the area of State lands which would be available, if it were necessary to extend it.

The Minister indicates that a certain amount of business will be transacted, either for purposes of storage, as an entrepôt trade, or for purposes of processing. That suggests that buildings of various kinds will have to be set up there, either by the Government or by bodies to whom the Government would lease land, and I should like to know whether it is the general idea that the persons who require buildings there would erect them and, if that is so, whether, in leasing lands to them, the leases would be subject to the State Lands Act.

As regards the developing of any processing business there, could the Minister give us any idea of what kind of processing he has in mind? Is it contemplated that a motor car assembly business, a machinery assembly business, or a furniture assembly business of one kind or another might be started there? What exactly is it contemplated might happen in the first year or two in regard to the development of processing there and are there any particular commodities in respect of which he knows that an entrepôt trade will start there straightway? It would be interesting to have any information the Minister has on that point.

With regard to access, will access by the various airlines to the customs-free airport be governed by any particular international agreements or by any general inter-nation agreements, or will access be open to any airlines at all? There is so much talk about the strategic aspect of the world in relation to the new outlook on war that we should like to hear if the Minister has contemplated how the use of the free airport would be affected by a war situation.

I should like to say that I personally am very glad to see this Bill. A customs-free airport can be very valuable to this country. I notice that, in the explanatory memorandum, it is stated that the free port cannot be exempt from currency restrictions, and I should like the Minister to enlarge on that and explain it for us. I can see that, as well as being of considerable benefit to the country, a customs-free airport —the same, I presume, as a customs-free port—would require to be extremely well managed. The whole scheme would require to work very smoothly and very efficiently from the legal aspect and the physical aspect. Otherwise, we might be bringing something into the country which might, in the long run, prove a source, perhaps, of corruption to some of our citizens. In other words, there might be great opportunities for smuggling in and smuggling out, and unless the whole running of that free airport were thought out in the very best fashion, we might find that we had created something here which would provide opportunities to certain international or perhaps national smugglers who wish to evade laws. I daresay the Minister has considered that, and I personally wholeheartedly welcome the Bill.

At present, Shannon Airport comprises approximately 800 acres. Provision is made in the Bill for the extension of the area of the free airport, should it become necessary, and should additional land be required for the purpose. The actual area of the free airport would include the whole of the present airport, minus the part which will be set aside for the customs airport, a small area adjacent to the terminal building, through which local traffic and disembarking passengers will pass. Persons requiring buildings for any industrial process within the airport area may either erect them themselves or lease them from the State, as circumstances may dictate. Any land leased will, of course, be subject to the general provisions from time to time enforced in legislation concerning the leasing of State lands. The only development, so far, has been the establishment of a repair and overhaul depôt by an aircraft company, and in that case the buildings are being erected by the Department and are being leased to the company.

It is impossible to forecast with any confidence the type of business that may develop as a result of the establishment of the free airport. I should think it unlikely that the assembling of motor cars or machinery, or commodities of that kind will be attracted to Shannon Airport, because clearly it is only commodities which gain in value by rapid transportation which will be concerned with air transport for some considerable time to come. Probably any business that may develop in the immediate future will rather take the form of the storage of goods for distribution to markets as required. A transit shed is being erected at the airport by the Department to facilitate that type of traffic.

Deputy Mulcahy's question concerning the use of the airport by any airline raises the whole question of the regulation of international air traffic. At present international air traffic is regulated by bilateral agreements between countries which desire to facilitate the development of air services between their respective territories. We have made a number of these bilateral agreements, as the Deputy is aware, and others are being negotiated. By these agreements we give to the airlines of other countries the right of commercial entry and the various freedoms of the air, as they are called, in return for the concession to our air companies of similar rights in other territories. It may be that at some stage there will be a multilateral agreement giving some or all of the freedoms of the air generally and without any bilateral bargaining but, as the Deputy will remember, the movement in that direction which began in Chicago was not successful and such development as has taken place in the meantime has been facilitated by bilateral agreement. Consequently, no airline would have the right to use Shannon Airport for traffic purposes unless given under Governmental agreement negotiated for that specific purpose.

I do not think that the danger of undesirable goods being smuggled into the State is greatly increased by the establishment of a customs-free airport at Shannon. I cannot see that the Revenue Commissioners will have any greater difficulty in guarding against that danger at Shannon than they have as present at the land frontier or at most of the sea ports. I think in fact the limited area of the airport and the presence of Government officials within the airport, who will have certain functions to which I have referred, will make the risk of Shannon less than at other frontier stations. It will be necessary, of course, to extend to the airport a number of the regulations in force. We are aiming to make the airport as free of formality as possible but, clearly, the restriction on the importation of animals or plants which might bring disease here cannot be safeguarded without there being specific regulations in force at the airport and there are, as I have mentioned, international conventions, relating to certain undesirable traffic, to which we are parties and which we must enforce and which will continue to be enforced at the airport by officials of the Department of Industry and Commerce. It is not possible to release air travel from all restriction but the aim of the Bill is to release it from the restrictions which have proved most irksome and which are unnecessary from the point of view of the protection of our own interests.

I would ask the Minister to explain the sentence about currency regulations.

As the Deputy is aware, there are at present in force, under Orders made by the Minister for Finance, certain restrictions upon the export and import of currency. These regulations will also be enforced—they must necessarily be enforced—at the airport, only to the extent necessary to safeguard our own position.

Mr. Corish

Is it correct to say that travellers between this country and America have not been subject to the import or export laws?

They are subject and will continue to be so.

Mr. Corish

And always have been?

They always have been. Does the Deputy refer to passengers from this country?

Mr. Corish

Visitors to Ireland returning to America—have they been subject to the laws in the past?

Yes, certainly. Anybody travelling from Ireland to the United States is subject to our regulations concerning the exportation of goods, currency, or any similar regulation of that kind.

Mr. Corish

I was under the impression that some travellers from this country to America were not subject to any of those laws, provided that they were within the stipulated weight.

No. I am not sure if I understand the Deputy. A passenger coming to Ireland from another country, spending some time here and proceeding to America, could take with him to America any goods he brought with him to this country. He would be subject, however, to the regulations concerning the export of goods of Irish origin. He could not buy goods here for export and take them out if the export of those goods was prohibited or if no licence for their export had been issued to him.

Mr. Corish

I thought he could.

Can the Minister say if it is contemplated that employment will be given to local residents in processing inside the airport?

Certainly.

Will workers of that kind be subjected to customs inspection in and out?

In theory, but arrangements will be made by the Revenue Commissioners to minimise the formalities with which they will have to comply.

Question put and agreed to.
Committee Stage ordered for Tuesday, 4th February, 1947.