I propose to take Questions Nos. 9 and 26 together.
As Deputies will appreciate, the essential objectives in the campaign to tackle drug traffickers must be to prevent illegal drugs from entering the country, to secure the conviction of those involved and to confiscate their ill-gotten gains.
The primary role of the Revenue Commissioners in this context is exercised by the Customs Service which is responsible for deterring and preventing smuggling of illicit drugs. Revenue has devoted considerable resources to this task and Deputies will be aware that the Customs Service has made many substantial drug seizures in recent years. These seizures represent a substantial contribution to curbing the activities of those involved in the drugs trade.
The chairman of the Revenue Commissioners and the Commissioner of the Garda Síochána have recently signed a memorandum of understanding, which has been endorsed by the Minister for Justice and myself, which delineates the respective roles of the Customs Service and the Garda and introduces arrangements to maximise co-operation between them in regard to smuggling of drugs. This brings to fruition one of the key proposals in the package of antidrugs measures decided upon by the Government last July and I am confident that it will contribute to greater effectiveness in combating drug smuggling and the apprehending of those involved by the Garda.
As regards the taxation of profits from drug trafficking, the question raised by Deputy McCreevy, I am assured by the Revenue Commissioners that they are committed to following up any such cases of which they become aware, in accordance with their duty to recover tax from any persons who make taxable profits irrespective of the activity involved.
It is obvious that there are many difficulties in establishing a tax liability against those who profit from drug trafficking or any illegal activity. Such persons do not wear the normal badges of trade, nor are there any of the conventions of normal trading which characterise legitimate business activity. There are no trading records to be examined, and what banking arrangements may exist are carefully concealed. It is essentially a cash-based business, using sophisticated money laundering techniques which have frequently defied the best efforts of police and revenue agencies all over the world. Where, however, hard information is received, from the Garda or otherwise, which shows that these people have a lifestyle inconsistent with their declared income, the Revenue will pursue those cases for tax assessment purposes.
The legal difficulties involved in attributing illegal profits to a particular source have been clearly recognised by the Oireachtas in its enactment of section 19 of the Finance Act, 1983 which reflected rulings made by the Supreme Court in this sensitive area. That section provides that profits which arise from a source which is unlawful or unknown may nevertheless be assessed to income tax as "Miscellaneous Income". In other words, the Revenue does not have to prove that profits are derived from drug trafficking, and for the reasons just mentioned, would be most unlikely to be able to do so.
For this reason, Revenue records do not make a distinction between unknown and unlawful sources, nor has there been a separate record kept which would enable it to indicate the total tax collected in section 19 cases. However, in seven cases which could readily be identified for the period in question, a sum in the region of £1 million was collected in respect of section 19 assessments. A number of further cases are currently being examined, which the Revenue hopes will result in section 19 assessments.
It is against this background that the Revenue and the Garda have been carrying out a joint review of certain recommendations made by the Law Reform Commission, in relation to co-operation between the two bodies, in its 1991 report on the confiscation of the proceeds of crime. As part of this, the review is looking also at the use of section 63 of the Criminal Justice Act, 1994 which implemented some of the key recommendations of the Law Reform Commission, and which allows the Garda, subject to compliance with certain procedures and safeguards for individual rights, to obtain information from various bodies, including the Revenue Commissioners, which may be useful to the Garda in discharging their functions in relation to the confiscation of illegal profits under that Act. The Revenue has informed me that it is happy to co-operate with the Garda in the use of this provision. The Garda have also indicated in the course of the review that they will provide information to the Revenue Commissioners where they identify assets suspected to be the profits of drug trafficking with a view to the Revenue exercising its powers under section 19 of the Finance Act, 1983.
While the Government originally set a deadline of four months for the completion of the report the task has taken a little longer because of the complex issues involved. The Revenue Commissioners have kept me fully informed on progress and I am satisfied that there is absolutely no basis for the suggestion in Deputy Sargent's question that the Revenue has been delaying the report. The report has just been finalised and will shortly be considered by the Minister for Justice and myself before it is brought to the Government. Any decisions that may be made on the basis of the report, and which are suitable for publication, will be announced in due course.
