I move: "That the Bill be now read a Second Time."
Proceeds of Crime (Amendment) Bill, 1999: Second Stage.
Is anyone else doing anything?
The Proceeds of Crime (Amendment) Bill, 1999, is a relatively short Bill whose primary aim is to tighten up on and reinforce certain provisions of the 1996 Act so that it will be more effective in accomplishing the purpose for which it was enacted. A central plank of the 1996 Act is the power which it gives for the making, by the High Court, of orders freezing certain assets and possible eventual disposal of those assets for the benefit of the Exchequer. The court order may be an interim or interlocutory one. The former is a temporary measure and remains in force for up to 21 days. Where an interlocutory order is in force for seven years, the court may make a disposal order whereby the proceeds are paid into or disposed of for the benefit of the Exchequer. While the assets are frozen it prevents the person who had possession or control of those assets from disposing or otherwise dealing with them.
A question which has been raised about the effect of an order freezing the assets is who is in possession or control of those assets following the making of the order? One interpretation which has been canvassed is that possession or control has passed to the member of the Garda Síochána or the officer of the Revenue Commissioners who made the application for the order. The implications of such an interpretation, if correct, would be to place ridiculous obstacles in the way of the effective operation of the 1996 Act and would be contrary to the purpose for which it was enacted.
By way of example, let us suppose that the High Court, on the application of a member of the Garda, has made an interim order freezing certain assets, which would remain in place for only a maximum of 21 days, and that the Garda then applied for an interlocutory order. If the effect of the interim order was to transfer possession and control, for the purpose of the Act, to the garda who made the application, the question to be asked is, who is to be named as respondent in the application for the interlocutory order? It would be illogical to think that the garda who sought the interim order should now be named as respondent.
I am sure Deputies would consider that resorting to the fiction that possession and control had passed to the garda would be wholly unacceptable in that it would mean that the applicant and respondent at the interlocutory stage would be gardaí. That is not the intention of the Act. When this interpretation of possession and control for the purpose of the Act was considered by the High Court, it had no difficulty deciding that such a construction would defeat its purpose. Having regard to the scheme and purpose of the Act, the court decided that possession and control remains with the respondent.
Although the High Court has upheld the interpretation, which I believe is the only sensible one, I am advised that it is desirable that the matter should be spelled out unequivocally in the Act itself. Accordingly, in this Bill I propose to amend the 1996 Act so that it is stated therein that a person remains in possession and control of property for the purpose of the Act notwithstanding that it is lawfully in the possession of a member of the Garda or an officer of the Revenue Commissioners or is the subject of a court order pro hibiting it being disposed of or being dealt with or being diminished in value.
The Bill makes further amendments with the purpose of streamlining the operation of the 1996 Act. To this end it contains provisions which will permit the varying of court orders affecting assets so that certain disbursements, such as living expenses and tax liabilities, can be made as well as allowing applications to court in the name of the Criminal Assets Bureau in addition to, as at present, applications in the name of individual members of the bureau. The Bill also amends the 1996 Act in relation to tendering of evidence in the course of applications to court. It makes clear that certain information provided by a respondent in compliance with the terms of the 1996 Act may not be used in subsequent criminal proceedings against the person providing it. I will return to the actual provisions of the Bill later in my contribution.
I am sure the House will understand if at this stage I remind Deputies that the 1996 Act was the product of my own efforts while in Opposition when I brought forward the Organised Crime (Restraint and Disposal of Illicit Assets) Bill. The Government of the day had no option, given the public mood at the time about the activities of criminals who appeared to be beyond the reach of the law, but to accept my Bill, which was subsequently renamed the Proceeds of Crime Act, 1996.
They were generous.
That Act was pioneering legislation in that it tackled the then well documented problem of criminals, who had no obvious lawful means of income, living lifestyles which were clearly beyond their known means. The Garda was powerless as matters stood to confront the often blatant display of illegally acquired wealth. The 1996 Act, for the first time, put the Garda ahead of the criminals in the battle to curtail their activities and to hit them where it hurt most – in their pockets.
(Mayo): The Minister has lost the ground again.
The Act achieves this by providing for the freezing of property which is the proceeds of crime through the grant of an interim or interlocutory order, the effect of which is to prevent any person from dealing with or disposing of or diminishing the value of the property. An interim order will remain in force for a period of 21 days. While under an interlocutory order the property remains frozen for seven years after which, unless the court determines that it is not the proceeds of crime, a disposal order may be sought. The moneys realised as a result are paid into or disposed of for the benefit of the Exchequer. There is also provision for the appointment of a receiver over property which is the subject of an interim or interlocutory order.
The Criminal Assets Bureau has enjoyed considerable success in depriving criminals of the proceeds of their criminal activities. Since its establishment in 1996, and up to the end of 1999, it has obtained interim orders on property to the value of over £7.6 million and interlocutory orders on property to the value of over £5.4 million under the provisions of sections 2 and 3, respectively, of the Proceeds of Crime Act, 1996. During the same period the bureau demanded in excess of £32 million in the payment of tax and interest from persons suspected of involvement in criminal activity, and social welfare determinations and savings amounted to in excess of £1.5 million.
The bureau is regarded by many people, both nationally and internationally, as a model operation. In its evaluation report on Ireland's anti-money laundering measures, the financial action task force concluded that in relation to certain measures, such as the Proceeds of Crime Act and the Criminal Assets Bureau, Ireland has implemented an innovative legislative and administrative scheme, which could provide a model for other countries. Similarly, in its report on Ireland's mutual legal assistance regime, the evaluation team under the remit of the European Union's Multi-disciplinary Group on Organised Crime, concluded that the Irish authorities have shown that they are prepared to be innovative in their approach to international organised crime, and in particular, with the Criminal Assets Bureau, have produced a model for other countries in Europe.
The fight against criminality, and drug crime in particular, has involved a number of inter-related elements. One such element is legislative, which has the twin aims of depriving criminals of the benefit of their illegal gains and of ensuring that when they are caught and convicted they will serve lengthy sentences. I have already mentioned the 1996 Act and the Criminal Assets Bureau. I should also mention the Criminal Justice Act, 1994, which contains anti-money laundering provisions as well as provisions for the confiscation of the proceeds of drug trafficking and the forfeiture of property used in the commission of crime. The Criminal Justice Act, 1999, specifies that any person found guilty of drug trafficking, where the value of the drugs is £10,000 or more, will be liable to receive a mandatory ten year prison sentence. This measure was aimed at keeping off the streets for a considerable time those engaged in peddling the misery which is the drugs trade and sent a powerful message to anyone considering engaging in drug trafficking that they faced lengthy incarceration in this jurisdiction.
Some statistics might help to illustrate the success which there has been in this area. During the period from January 1998 to December 1999, drug seizures amounting to an estimated street value in excess of £120 million were made. In the same period, Garda operations Dóchas, Cleanstreet and Mainstreet, aimed at combating drug dealing at local level, yielded seizures of illicit drugs with an estimated street value of around £20 million and resulted in over 20,000 arrests.
The second element in the fight against crime can be seen in the various initiatives which have been put in place to steer people, young people in particular, away from crime. This involves a multi-agency approach, bringing together a number of different agencies to develop and put in place a series of programmes to divert young people and help to re-build communities which have suffered most from the effects of crime.
I remind Deputies of the tremendous progress that has been made through the allocation of funding by this Government under various schemes. A figure of £10 million has been allocated on an annual basis, to support the implementation of over 200 projects proposed by local drugs task forces in their own areas. A further £15 million over a two year period was allocated in August last year to support the development of new service development plans by the local drugs task forces.
The Government has allocated a sum of £35 million over three years, under the young people's facilities and services fund, to assist in the development of preventative strategies, in a targeted manner, through the development of youth, sport and recreational facilities and services in disadvantaged areas where a significant drug problem exists or has the potential to develop.
The Department also provides funding for Garda youth diversion projects and there is £4 million available this year for the existing projects and the expansion of new projects. Recently, I announced the establishment of ten new projects throughout the country which will bring the total number of projects to 39. The National Development Plan 2000-2006 provides additional funding of £16 million for this initiative.
These projects are operated by multi-agency management and advisory committees involving the Garda, probation and welfare service personnel, voluntary youth organisations, and representatives of local communities and are targeted at young people in the ten to 18 age group, particularly those who are seriously at risk of becoming involved in the drugs and crime cycle, who are already involved in crime or are likely to drop out of the education system prematurely. The projects aim to divert young people from becoming involved in criminal/anti-social behaviour by providing suitable activities to facilitate personal development and encourage civic responsibility, and thus prevent crime and support Garda/community relations.
The projects are currently being evaluated by external evaluators to assess their impact, to identify examples of best practice within the management, operation and organisation of individual projects and to identify the potential for improving links with other statutory and voluntary agencies which are providing related services in the same areas.
On top of this funding, significant amounts are being made available to deal with the issues of social exclusion and disadvantage under the national development plan. In addition to the £16 million which I secured for the Garda youth diversion programme, I have also secured in the region of £70 million for additional crime prevention measures, including pre-employment training and personal development courses for individuals who come to the attention of the criminal justice system under the probation and welfare service, and labour market training for offenders while in prison, with the objective of breaking the cycle of crime and reducing the rate of recidivism.
I have outlined these initiatives for the benefit of Deputies because I think it is important they are aware of the commitment of this Government to assisting people to contribute positively to society and, at the same time, to demonstrate our desire to defeat crime by advancing on all fronts simultaneously. I will now deal briefly with the details of the Bill.
Section 1 is a standard provision. Section 2 makes two amendments to section 1 of the 1996 Act, which deals with definitions. The first is the term "applicant". As I have already outlined, the Act provides that applications for interim and interlocutory orders are at present made by a member of the Garda Síochána or an officer of the Revenue Commissioners. In practice, these orders have been made in the name of the chief superintendent of the Criminal Assets Bureau. In addition to permitting the applications in the name of an individual, the Bill proposes that they should also be made in the name of the bureau itself. Under the Criminal Assets Bureau Act, 1996, the bureau is a body corporate and it is only logical that applications should be capable of being made in its own name. The amendment permits this.
The second amendment I propose to make to section 1 of the 1996 Act is to insert a new definition to make it clear that a person remains in possession of property, even where the property is in the lawful possession of the Garda or the Revenue Commissioners or is subject to an interim or interlocutory order, or where the person is otherwise prevented from disposing of or dealing with the property. I have already referred to doubts which were raised as to when a person may be said to be in possession or control of property for the purposes of the Act. The advice I have received indicates that it is desirable that the 1996 Act be amended in this respect in order to remove any further doubts on the subject. This amendment provides accordingly.
Section 3 makes three amendments to section 2 of the 1996 Act, which deals with interim orders. The first is a technical amendment, necessitated by the earlier amendment, to provide for applications to be made in the name of the Criminal Assets Bureau itself. To this end, it includes the bureau as a body which may apply for an interim order.
The second amendment to section 2 of the 1996 Act provides that an interim order may be varied by the court to permit the recovery of income tax, or other sums owing on foot of court orders. At present, section 2(3) of the 1996 Act provides that a respondent, that is, the person against whom the order has been made, or any other person claiming ownership of the property may apply for the discharge or variation of an interim order. Although the Garda Síochána and other specified persons could apply for a discharge of the interim order, there is no provision permitting them to seek a variation on it for the purpose of allowing certain disbursements to be made. The Bill's proposal meets that need and will enhance the effectiveness of the procedure by inserting a new subsection, subsection (3A). This will allow the court to vary interim orders on the application of the Garda, Revenue Commissioners or the Criminal Assets Bureau in order to permit the discharge of certain payments, for example, payment of court costs or income tax.
The third amendment is a consequential amendment relating to the giving of notice to the respondent of applications for the discharge or variation of interim orders which are made by the Garda, Revenue Commissioners or the Criminal Assets Bureau.
Section 4 amends section 3 of the 1996 Act in three respects in relation to interlocutory orders. These amendments mirror those made by the previous section of the Bill, that is, they provide for applications in the name of the Criminal Assets Bureau, allow for the variation of interlocutory orders on the application of the Criminal Assets Bureau to permit the discharge of certain disbursements and provide for the giving of notice to the respondent of applications by the bureau to discharge or vary interlocutory orders.
In reviewing the 1996 Act, it seemed to me desirable to address again the practicalities of the procedures put in place in relation to the tendering of evidence of belief that property is the proceeds of crime. In this regard I am at all times conscious of the need to balance the rights of the individual with the needs of the State. However, practical experience gained over the past few years has suggested that there are opportunities to increase the efficiency and effectiveness of the procedures, without encroaching on the rights of the individual.
Section 6, which is consequential on the amendment proposed in section 4, amends section 8 of the 1996 Act. At present, section 8 permits the giving of evidence by affidavit at an application for an interim order. However, it requires that such evidence must always be given orally at the interlocutory stage. In my view, this is not always necessary. Therefore, I propose greater flexibility in this regard by providing that such evidence may now be given on affidavit. At the same time, I recognise there are occasions when it is desirable for such evidence to be given orally, for example, to facilitate cross-examination. Accordingly, it will still be possible to have evidence given orally where the respondent requires it or where the court directs it.
Section 6 also provides for the insertion of an additional subsection in section 8 of the 1996 Act to the effect that a document purporting to be issued by the Criminal Assets Bureau is to be deemed to be such a document, unless the contrary is shown.
Returning to section 5, the Bill proposes to extend section 6 of the 1996 Act by providing that any person affected by the freezing of property under either an interim or an interlocutory order may apply to the court for an order enabling him or her to discharge reasonable living and other necessary expenses. At present, while either the respondent or another person may apply to the courts, the Act confines itself to permitting only the respondent to discharge reasonable living and other expenses. This amendment will broaden the scope of the subsection to enable the respondent or that other person to discharge these expenses.
Section 7, which amends section 9 of the 1996 Act, confirms that information provided by a respondent in relation to his or her property, income and sources of income, when required to do so by a court under that section of the Act, may not be used in evidence against the respondent or his or her spouse in any criminal proceedings, with the exception of proceedings for perjury of course. This is simply stating in statutory form what is, in any event, read into the Act by the courts to protect the right of persons against self-incrimination. Having examined the matter, I consider it useful to state this principle plainly in the Act, and I am taking this opportunity to do so. I would point out, however, that the limitation applies only to criminal proceedings and, therefore, it will not affect the use of information acquired under section 9 of the Act in other matters, for example, tax assessment.
What about actual tax fraud?
We can discuss that issue on Committee Stage. I have explained how the limitation applies only to criminal proceedings and, therefore, it will not affect the use of information acquired under section 9 of the Act in other matters, for example, tax assessment.
Finally, section 8 is a standard technical provision relating to the Title of the Bill when enacted.
I believe that it will be clear from what I have had to say that this Bill contains a range of useful amendments to the original 1996 legislation. In commending the Bill to the House, it is appropriate that I pay tribute to the work of the Criminal Assets Bureau.
(Mayo): While the short technical amendments in this Bill are welcome, in that they help to streamline the operations of the Criminal Assets Bureau, they also point the finger clearly at the performance of a Government which has failed manifestly to initiate any worthwhile new legislation to combat fraud or money laundering despite regular press releases promising tough new measures. The much vaunted, long promised fraud offences Bill continues to languish on the Government's list of promised legislation. Two years ago, banner newspaper headlines heralded “Overhaul of Law to Tackle Escalation in Fraud”. The article informed us that:
New legislation is to be published by Justice Minister, John O'Donoghue, later this year to combat fraud which costs Irish business millions of pounds annually. The fraud offences Bill which will be a comprehensive overhaul of the law in the area on a scale not previously witnessed by the State will be in this legislation according to the Minister.
That was in the early weeks of 1999, which has come and gone. We are now approaching the halfway stage of 2000 and there is still no sign of the bill.
It is No. 27 on the list in my hand.
(Mayo): That demonstrates its priority – No. 27.
It is just before the abolition of ground rents.
(Mayo): The Minister has a particular weakness for making high profile promises, announced in banner headlines, to well placed journalistic sources. We then come in here to remind him he has failed to deliver.
He needs the publicity, God love him.
I do not actually.
(Mayo): We have had the same experience with a range of measures. For example, we produced two private security industry Bills which were carefully drafted and comprehensively discussed in this House, yet they were voted down by the Minister and his Government because the Government Bill was, in the Minister's words, “imminent”. The Government measure has still not appeared. We had the same experience when Fine Gael brought forward the Enforcement of Court Orders Bill. We argued cogently for its enactment and the Government turned it down on the basis that its Bill was imminent. The Government has failed to deliver its attachment of earnings Bill, having turned down our measure which would have put a place a regime to ease the crisis in our prison system.
Two weeks ago we had the same experience with the Labour Party Bill designed to redress a major problem relating to the entire political system, donations, etc. This was turned down on the basis that the Government's measures were imminent.
And the joyriding Bill.
(Mayo): Absolutely. I could go on – the list is endless. In June 1999, this House debated what would have been an excellent Bill, in the name of Deputy Flanagan – the Prevention of Corruption (Amendment) Bill. It was drafted with the express intention of introducing a number of important changes in an area of the law which had remained unaltered and unaddressed for almost 100 years. Coincidentally, Deputy Flanagan's Bill would have been very topical in the context of much of what is now emerging from the Flood tribunal and the Moriarty tribunal in Dublin Castle.
Deputy Flanagan's Bill dealt with bribery, the payment of secret commissions, payola and the misuse of information for personal gain. True to his gracious self, the Minister rejected Deputy Flanagan's Bill on the basis that he would be introducing a prevention of corruption (amendment) Bill. According to the Minister, his measure would be far-reaching and would cover categories of persons not covered at present. The Minister's Bill eventually appeared some weeks ago and the general analysis – not just an subjective one by those in the political domain – was that it is a pale reflection of what was promised. Not alone is the Bill far less adequate and comprehensive than required in the context of the corruption which has so besmirched Irish public and commercial life but it has still not received a Second Reading.
Debate adjourned.