Gay Mitchell
Question:4 Mr. G. Mitchell asked the Minister for Justice the plans, if any, she has to reform procedure for the granting of naturalisation to foreign persons.
Ceisteanna—Questions. Oral Answers. - Naturalisation Grants.
Eamon Gilmore
Question:5 Mr. Gilmore asked the Minister for Justice the original terms of reference of the interdepartmental committee examining the operation of the business migration scheme; the amended terms of reference following the statement by the Tánaiste and Minister for Foreign Affairs on 1 June 1994; the membership of the committee; the number of occasions on which it has met; when it is expected to conclude its business; if it is intended to publish its report; and if she will make a statement on the matter.
Question:
6 Mr. McDowell asked the Minister for Justice the proposals, if any, there are in Europe to deal with the granting of nationality to non-resident investors; and if she will make a statement on the matter.
I propose to take Questions Nos. 4, 5 and 6 together.
Recognising that there were various questions down for answer yesterday on the subject of naturalisation and some others today and that all or most of them have very likely been tabled because of recent controversy concerning naturalisation, I hope that the House will bear with me while I make certain lengthy comments about naturalisation which have relevance to all of these questions but which, if repeated in whole or in part in reply to each question, would make for a very cumbersome and time-wasting procedure.
The House will bear with the Minister but please ensure we will have an opportunity to cross-examine the Minister.
The Chair will facilitate Deputies, in so far as he can, to elicit information but the Deputy will appreciate the Chair is bound by Standing Orders in respect of the time limit for Priority Questions.
There are two broad naturalisation categories which, for the sake of convenience, I will describe as general naturalisations and investment-based naturalisations.
The vast majority of applications granted fall into the general category. These are naturalisation certificates granted by the Minister for Justice to persons who have a certain period of residence in the State and fulfil other specific conditions set out in the Irish nationality and citizenship legislation. While I have certain ideas concerning these naturalisations which I shall mention in dealing with Deputy Mitchell's specific question, all I want to say at this point is that these cases have not been central to the recent controversy, apart perhaps from one point.
It has been suggested that the Department of Justice, or at least some of the officials within the Department of Justice who deal with naturalisation, apply discriminatory or racist policies in dealing with naturalisation irrespective of the category into which the particular application falls.
I sincerely hope that these allegations will not be repeated. I have no wish to engage in dispute with Deputies on this subject. It is quite simply too serious to have discord in this House on a matter which may give rise to offence or become the subject of concern to the nationals of any country when there is simply no basis for it. If anybody has evidence of discrimination I would urge that they supply me with the facts.
Turning to naturalisation applications granted on the basis of investments made, I have already outlined the background to these cases in the course of a lengthy statement I made to the House on 31 May last and I do not think that it would be right to waste the time of the House by going through all of these details again.
However, it is important to stress some points because various statements made about investment-based naturalisation, since I made my statement in the Dáil, leave the impression that certain matters have not been fully understood.
The first point is that the scheme which we now have is, subject to what I will say later, the scheme which has existed since the Government decided that inward based investment, provided that the amount involved was sufficient, should constitute grounds for deeming the investor to have qualified for naturalisation on the basis of what the legislation describes as "Irish associations".
As I explained in my statement last month what the legislation provides is, first, that the granting of naturalisation on the basis of "Irish associations" is in the absolute discretion of the Minister for Justice and, second, that none of the other conditions specified in that Act need to be satisfied.
The Department of Justice itself, however, adopted certain informal working rules, the more important of which were that an investment of about £500,000 would be required and that the applicants would demonstrate an intention of residing in the State by purchasing a residence. Although these working rules were submitted to the Government, the Government's decision was that the question of granting or refusing naturalisation in individual cases should be left in the absolute discretion of the Minister for Justice. Despite this, Justice Ministers have operated on the basis that investments of the order mentioned would be required and that intention to reside in the country for a reasonable period — to be evidenced, basically, by the purchase of a residence — would be required also.
Having looked over various cases since the recent controversy began, it is fair to say that the Ministers who dealt with these cases operated these rather informal arrangements in a very similar manner.
Nobody could deny with the benefit of hindsight — which tends invariably to produce the very best insights — that the informality of the scheme, while in one way an asset, was, in other ways, a feature which left it wide open to criticism. The strength of the scheme's informality was that it enabled favourable decisions to be made quite quickly in cases where there appeared to be a reasonable prospect of getting investment into the country and thereby creating or maintaining jobs. It is fair to say, however, that in judging whether a particular investment proposal had a reasonable prospect of coming to fruition and producing or saving jobs, Ministers tended to exercise discretion in favour of the investor without, as a matter of routine, insisting on all the certainties that might well be required if a more formal arrangement was in place.
For example, it is not, and never has been, the practice to seek police reports on the investors concerned. Deputy O'Malley has tabled a specific question on this aspect of the matter to which I propose to respond separately and in more detail. It was not the practice to insist on a positive recommendation from the Industrial Development Authority. It was usual to consult the IDA and to have regard to its views on particular investments. However, in the end the judgment as to whether a particular investment was sufficiently attractive in job-creating or job-maintaining terms was a political one, to be exercised by the Minister.
It was not essential that the investment should fall into a particular category. If there was inward investment likely to produce or save jobs — even if that investment took the form of what is known as a "soft loan"— the inclination was to grant rather than refuse naturalisation to secure the investment. The only significant development in this regard — indeed the only significant development of the scheme since it began — was a Government decision of March 1992 that the interpretation of "Irish associations" should be interpreted liberally not to confine the requirement to investment in industry, for example, tourist related projects could be included, but property should be excluded.
There was no automatic follow-up system. In other words, it was not part of routine practice to check, say, six or 12 months later to see whether the persons naturalised had been resident in the country for a reasonable period, etc. Deputy Rabbitte has tabled a specific question on this aspect of the matter to which I also propose to respond separately.
While the flexibility of the whole scheme had its advantages in terms of securing investments that might otherwise be lost, and while Ministers tended to decide cases in all good faith to secure those investments, there is now a clear view that more formal and indeed more transparent arrangements are called for.
There certainly is.
The Government fully agrees with this and has already acted. This brings me to the two Priority Questions from Deputies Mitchell and Gilmore and Deputy McDowell's question. With regard to Deputy Mitchell's question, the position is as follows. Last year, the Government established an interdepartmental committee of senior officials to examine policy and practice with regard to non-Irish persons resident in the State, and in relation to persons who apply for refugee status. A report has already been published on applications for refugee status and, having considered the proposals, the Government gave formal approval for drafting a Bill. That Bill will be introduced as soon as possible and, when the work on its drafting has been completed, I will arrange for its immediate publication.
The interdepartmental committee is continuing its work and preparing recommendations with regard to the procedures and policies governing the admission and residence of non-Irish nationals. I have asked the committee to consider specifically the existing procedures for the granting of naturalisation to non-nationals in the light of the commitment in the Programme for a Partnership Government that policy towards the treatment of immigrants will meet the highest international standards. I hope to have its report in the near future and, when I have considered its recommendations, including those of the area of naturalisation procedures, I will act on them as soon as possible. Action will include amending legislation, if that is required.
With regard to Deputy Gilmore's question, the position is as follows. On the basis of my experience in dealing with the "Irish associations" provision in the nationality and citizenship legislation, I formed the view that, in addition to having the interdepartmental committee to which I have just referred and which will consider broad policy issues, the Minister for Justice should immediately have available the ongoing advice of an appropriately qualified group of people on individual applications under the present scheme for investment-based naturalisation.
On my recommendations, therefore, the Government agreed last April to establish such an advisory group consisting of representatives of my Department, the Departments of Foreign Affairs, Enterprise and Employment, Finance and the Government agency engaged in the support and development of indigenous industry, Forbairt. This advisory group was established with the function of examining each application for naturalisation on the basis of "Irish associations" linked to investment in the State and making a recommendation in each instance to the Minister for Justice.
In establishing the latter advisory group, the Government decided that the Minister for Justice would bring its terms of reference to Government for approval at an early date. Since then, the Tánaiste and Minister for Foreign Affairs has written formally to me setting out in detail his broad views on the future arrangements that should apply in these cases. I have asked the interdepartmental committee which has been working since last year to consider the broad policy matters raised by the Tánaiste and Minister for Foreign Affairs. With regard to terms of reference for the group which will now advise the Minister for Justice on all future investment-based naturalisation applications, the position is that these terms of reference will be considered in the first instance by a Cabinet sub-committee which has been formed specially to advise the Government on the matter. That sub-committee consists of the Tánaiste and Minister for Foreign Affairs, the Minister for Enterprise and Employment, the Minister for Tourism and Trade, the Minister for Finance and the Minister for Justice. I will make the terms of reference of the advisory group known publicly when they have been settled by the Government. In the meantime I assure the House that no further investment-based naturalisation will be decided by me until the advisory group is fully operational and in a position to give me its advice on each case.
With regard to Deputy McDowell's question, the position is that, in the context of the Treaty on European Union, the nationality of member states is not regarded as a matter of common interest for the purpose of achieving the objectives of the Union. The question of proposals to deal with the granting of nationality does not, therefore, arise.
Unfortunately, I have not been in a position to provide all the statistical information which Deputies have sought in the various other naturalisation questions, particularly those which were for answer yesterday. To do so would require an enormous amount of detailed research in a section within my Department which already has a sizeable arrears problem due to the enormous increase in workload which has arisen in recent years in the area of general naturalisation and citizenship.
I will endeavour to provide whatever information can conveniently be provided from the records though I will adhere to the principle of not discussing the details of individual cases out of regard for the privacy rights of the individuals concerned and the rights of various companies who have provided information to my Department concerning their business affairs, their investment plans, etc. on a strictly confidential basis.
How did the Minister omit from her very lengthy reply the information she gave to the House in reply to a parliamentary question on 9 March last that if a foreign national was prepared to be associated with Ireland by making a substantial contribution, purchasing a home and living here he or she would be considered for naturalisation by her Department? Did the investors in C & D Foods Limited ever live in Ireland and, if so, do they continue to live here? Why have the details of this application not been put before the House? Despite her statement about the need for greater transparency, will the Minister agree that, conveniently, the waters have been muddied in this case? Am I correct in saying that this company, in which the Taoiseach said he remains a 41 per cent shareholder, has received a loan or gift —it is not a shareholding in the company —repayable in the event of the passports being revoked? In other words, do these new naturalised Irish citizens have a sword hanging over their heads and if they ever call in or withdraw their loan or gift their passports will be withdrawn? What is the precise status of this so-called investment in C & D Foods Limited?
I have given very lengthy replies in this House and elsewhere about the investment in C & D Foods Limited. I have been very forthcoming with all the information about the investment available to me and on file in my Department. My reply was very long and Deputies may have missed some of the points I made. I said that intention to reside in the country for a reasonable period was one of the informal rules. In reply to a Private Notice Question I said that the Department of Justice or the State could not compel people to live here — the people make the decision themselves. Successive Minister for Justice have taken the view that when people purchase a residence here it is a very strong indication that they will spend a certain amount of their time here each year. There has been no folow up procedure whereas every six, 12 or 18 months or two years the Department of Justice, the IDA or some other body look at these investments to see if they are still in place, whether the loan has been repaid and the circumstances surrounding the case. I do not have the information the Deputy seeks. There is no sword left hanging over the people if and when they withdraw their loan, that in some way interferes with their right of citizenship or nationality.
Is not the whole nub of this problem that for some time past this State has been operating a two-tier system of naturalisation, one law for those who can afford to buy their way into Irish citizenship and quite a different law for those who cannot afford to do so? Would the Minister agree that, in all of these various reviews about which she now speaks, perhaps what should emerge is a level playing pitch for all applications for naturalisation, irrespective of whether applicants are in a position to invest large sums of money in a Minister's or in the Taoiseach's company, or whether they be somebody who is simply coming in here to rejoin his family? By all means we should have an open and generous system of naturalisation but one which applies the same rules to everybody. Second, in relation to the myriad of committees and advisory groups to which the Minister referred, is my understanding correct that there was in place an interdepartmental committee examining general applications for naturalisation and the question of refugees but not the business migration scheme and, furthermore, that the advisory group to which the Minister referred has been established only recently and held its first meeting only on Friday last and that the Cabinet subcommittee to which she referred has been established only since the present controversy arose? Could the Minister clarify that for me, please?
There is no myriad of groups, although it may have appeared like that when I was replying. In effect there are two groups comprised of public servants. Deputy Gilmore is correct in saying that we have the interdepartmental committee which was set up by me because I felt it was important to have transparency and openness in relation to nationality and citizenship and the way we treat refugees and that we should live up to the standards accepted internationally, particularly with reference to the United Nations High Commissioners for Refugees and her recommendations. The first objective of that interdepartmental committee was to examine the overall issue of refugee status and to ascertain what should be done in relation to it. That interdepartmental committee furnished me with a report which was made known, resulting from which the refugees Bill has been drawn up which is now in final stages of drafting in the paraliamentary draftman's office. It will be published before the Dáil goes into recess if that is possible.
The second matter the interdepartmental committee examined was that of general naturalisations. I cited the different between general and investment-based applications in my reply. General naturalisations comprised the second matter the interdepartmental committee was examining. It is coming to finalisation of a report on the way this country should treat applications for general naturalisation. If that final report includes recommendation for changes in the law, statutory regulations or whatever, I will do as I did in relation to the refugees report — I will be quite happy to get the agreement of Government in relation to it.
Third, in relation to the advisory committee, Deputy Gilmore is correct in saying that I asked the Government to set up an advisory committee specifically in relation to the business migration scheme, or investment-based naturalisation, on the basis that I felt it was important to have some formal group of people who would examine the companies involved and the persons who wished to make an investment and make a recommendation to me. That group would be broadly-based, comprised of officials of the Departments to which I referred. That advisory committee will get its guidelines and terms of reference from the Cabinet subcommittee which the Deputy is correct in saying was established since this controversy — as he referred to it — blew up. I hope that answers the Deputy's questions.
The Minister informed the House that the vast majority of these applications fall into the general category and a small number only into the specific category. If that is the case, why was one of this small number, the one in relation to C & D Foods Limited, not submitted to the Industrial Development Authority in the normal way? Will the Minister tell the House why the IDA was by-passed? Will she inform the House what was the role of the Minister for the Environment, Deputy Michael Smith, in all of this? Was it unusual that when he made further representation on behalf of Mr. Masri, senior, he was replied to not by the Minister, or the Minister's office, as would be the normal procedure, but rather by a civil servant in the Department of Justice? Why was that? I am advised that is an unusual thing to happen.
Leaving aside the general and welcome changes the Minister is introducing at the request of Members of the House, will she agree to an independent examination of the specific investment in C & D Foods Limited and the granting of passports to the Masris, so that we can get to the end of what is a source of public scandal which will not go away simply because a Cabinet subcommittee has been established to investigate the general problem?
I will take the last part of the Deputy's supplementary first. I reject the implication in Deputy Mitchell's statement that the investment in C & D Foods Limited is a source of public scandal. The investment in C & D Foods Limited was made on the very same basis as many other investment-based naturalisations concluded by all of my predecessors since this scheme was first initiated. There was nothing unusual, nothing different in it. Nothing was by-passed. There was no difference between the way that application was treated and the way every other application for investment based naturalisation is treated within the Department of Justice.
What about the Industrial Development Authority?
I referred specifically in my reply to the Industrial Development Authority and said it was not the practice to insist on a positive recommendation by the IDA. I said it was usual to consult the IDA and made it quite clear in the House, whenever the answer——
Usual but——
Please, Deputy, let us hear the Minister.
Pehaps Deputy Mitchell will let me continue. I said in the House that when inquiries were made in relation to the investment, as they are normally made through the consultant in each case, there was no difference in relation to C & D Foods Limited. The inquiries were made through the consultant who submitted the application, the reply having come back very clearly that the overall project in C & D Foods Limited was IDA grant-assisted. As far as the Department was concerned that was enough to indicate that the IDA was supporting the project and, therefore, that there was no difficulty in relation to the investment.
How very convenient. The IDA was not asked.
In relation to the role of the Minister for the Environment, Deputy Michael Smith, there was nothing strange or different about that. I have looked at the scheme since this overall issue was raised and since early April when I asked the Government to agree to the establishment of the advisory committee. I ascertained that on the vast majority of occasions on which these type of applications were made to the Department, they are brought by a Minister of the Government, by a Minister of State or Members of this House. There is nothing different in the fact that the Minister for the Environment, Deputy Michael Smith, happened to be the Minister who brought this particular application to the notice of the Department of Justice.
I thank the Minister for having confirmed that the interdepartmental committee examining the business migration scheme was established following this controversy. Can the Minister confirm that the statement made by the Tánaiste on 2 June in which he stated that that committee was already in place and was examining the scheme was incorrect and that his statement on that occasion was no more than a political covering of tracks? In relation to the Masri case, will the Minister agree that the value of the soft loans provided to C & D Foods Limited — which I understand were at a rate of 5 per cent as against 16 per cent, which was the market rate at the time — was the equivalent of £600,000 and was a very significant boost to that company but a very cheap price to pay for an Irish passport?
I said before that the investment in C & D Foods was £1.1 million.
It was not an investment. It was a loan, for God's sake. Keep it within the realms of reality.
Deputy Rabbitte, you may not intervene at this juncture.
Surely you do not expect me to sit here and hear the Minister talk about an investment.
Deputy Rabbitte, you may not intervene. Supplementary questions are confined to the Members who tabled questions. You may not intervene.
In fairness to Deputy Rabbitte, he has a difficulty in that he did not hear my original reply which dealt with that particular issue.
It was a loan.
It was a gift.
Let me read exactly what I said. The inward investment was acceptable even if that investment took the form of what is known as a soft loan. There were no regulations requiring that it had to be a direct grant to the company.
It was a soft loan.
Deputy Rabbitte, if you persist in intervening I must ask you to leave the House.
It was a loan, not an investment.
Deputy Rabbitte, you know the procedure very well.
I do, Sir, but the Minister may not mislead the House. It was not an investment.
The Chair is merely administering the rules of this House. Only the Members who tabled questions may ask supplementaries.
I fully appreciate that, but after all the controversy we have been through a Member of this House cannot sit here and hear the Minister say it was an investment. It was a package of preferential soft loans.
Deputy Rabbitte, if you find it difficult to listen to what the Minister has to say you have a remedy.
I have listened with great forbearance so far.
There are many exits from this Chamber and you might take one before you are compelled to do so.
May we have some straight talking?
In relation to the first part of Deputy Gilmore's supplementary the Tánaiste was correct when he said in the House that the advisory committee was already in place.
It was not in place. It was a different committee.
No, I am sorry, the Deputy is under a misapprehension.
No, I asked about that and the Minister clarified it.
May I intervene? The reply which we had from the Minister was inordinately long and the Chair has had regard to that fact and is anxious to permit Members who have tabled the questions to put supplementary questions to elicit information. There must be finality to that matter. We know the time factor involved. I think the Members concerned will agree that the Chair has been generous. I now ask that we bring this matter to finality quickly. When the Minister has concluded her reply I will hear the two Members again very briefly.
There were two committees in existence. The reason for the lengthy reply was that I was anxious that further confusion should not be created in people's minds as a result of my reply today. Last year I set up an interdepartmental committee to look at two issues, refugees and general naturalisations, and I said what had happened as a result. Last April the Government agreed to my recommendation to have an advisory committee to the Minister for Justice and that that committee should comprise representatives from the various Departments involved plus a representative from Forbairt because they would have an intimate knowledge of companies, business and marketing and so on and would have an expertise which I and my officals in the Department would not be expected to have. That advisory committee was asked to look at the whole area of business or investment-based naturalisation. It was correct for the Tánaiste to say that the advisory committee was in existence. To make it absolutely clear, what has happened since is that the Government has decided, again on my recommendation, to set up a Cabinet subcommittee which will lay down the criteria and the guidelines — the terms of reference—for the advisory committee. I intend to publish those terms of reference when the Cabinet subcommittee has agreed them.
A brief and relevant question from Deputy Gay Mitchell and Deputy Gilmore.
Will the Minister reply to the question I asked? Will she allow an independent examination of this particular investment?
Can we avoid repetition?
Yes, if the Minister answers the questions I put to her. Can we have a specific reply to the question on C & D Foods investment? Will the Minister permit an independent examination of the file by either the Select Committee on Security and Legislation or the Committee of Public Accounts? Will the Minister extend to me as the Fine Gael spokesperson on justice the the same courtesy that has been extended to the Tánaiste? May I see the file? If there is nothing to hide, what is wrong with my seeing the file? When the Masris' application in Iris Oifigiúil was noted the address given was simply Haddington Road, not 46B or any number in Haddington Road. Haddington Road is a long road comprising many houses and many apartments. Why did the Department of Justice approve an application simply with the address “Haddington Road”? It was the only application from Dublin in that entry in Iris Oifigiúil which did not have a number. Are the successful applicants living in the State and, if not, where are they living?
In answer to the final supplementary, I have no idea where the Masris are living. In relation to the address given in Iris Oifigiúil, there is no requirement other than that given on the application and that is what was put in Iris Oifigiúil. I omitted to answer a previous question posed by Deputy Mitchell in which he made the comment that there were very few of these investment-based applications. It is important to put the record straight. There were 17 successful applications in 1992.
I said there were very few.
There were 15 successful applications in 1993 and seven successful applications in 1994 to date. It is useful to know that because the public is inclined to think there are thousands of applications every year. The request for an independent examination of the file seems to suggest something which is very serious, a Cheann Comhairle, and which I hope you have listened to carefully. It seems to suggest that in some way, as Minister for Justice, I am telling lies, interfering with the file or that somebody in my Department is doing so. I hope Deputy Mitchell is not suggesting that because, if so, I would have to deal with it separately.
The Minister can take whatever inferences she wishes. May I see the file and make up my own mind on that?
We cannot afford the luxury of repetition. Time is fast running out.
May I see the file?
Deputy Mitchell, please allow questions to proceed. I am calling Deputy Gilmore.
I have asked if I may see the file. If the Minister does not wish to show the file she must have something to hide. Why does the Minister not open the file? What are we to think if the Minister does not show the file?
Please, the Deputy has had a fair innings.
I wish to clarify two matters. Will the Minister agree that the value of the £1.1 million soft loan — not an investment of £1.1 million as has been portrayed — at a 5 per cent preferential rate of interest during the period concerned is £600,000 and that the two Irish passports came very cheap? My second question relates to the interdepartmental committees. The interdepartmental committee established to examine the business migration scheme, as distinct from the interdepartmental committee which was examining the general naturalisation issue, had not commenced its work at the time the Tánaiste stated it had commenced its work. He gave the impression that it was operational and that the scheme was under review. In fact that group did not have its first meeting until last Friday and was put together in a hasty manner following this controversy in order to save political embarrassment.
It is not true to say that the advisory committee was set up after the controversy blew up.
When did it first meet?
I do not have on file the date of the first meeting.
The first meeting took place last Friday.
Let us hear the Minister.
When I answered questions previously I said that the advisory committee was set up on my recommendation on the basis that I felt it would be important for me as Minister to have a group who would be able to advise me and make recommendations to me and that I would prefer to operate the system on that basis. A substantial amount of work had been done in my Department on this scheme and the difficulties I see with it before this controversy blew up. I will not go down the road of explaining what the advisory committee will do and how they will do it. I do not know the value of £1.1 million in soft loans.
Two passports.
All I am saying is that soft loans were accepted by all my predecessors as investment-based reasons for naturalisation. This application was not treated differently from any of those dealt with by my predecessors.