We will now have a presentation by the Minister of State at the Department of Finance, Deputy Parlon, on the Customs and Excise (Mutual Assistance) Act 2001, section 8, Protection of Manual Data Regulations 2004. The committee will now consider the proposal that the Dáil and Seanad approve of the regulations in draft. By the orders of the Dáil and Seanad made on 11 March the committee must consider these proposals and report to the Houses by way of a message not later than tomorrow, 25 March. I welcome the Minister of State and his officials and I thank him for the briefing materials. We will have a short presentation and then the Minister of State will take questions.
Customs and Excise (Mutual Assistance) Act 2001: Ministerial Presentation.
I welcome the opportunity to present these regulations, which are the final step in a process to enable Ireland to implement the convention on mutual assistance and co-operation between EU customs administrations, more commonly known as the customs co-operation convention. This convention provides the mechanism for co-operation between EU customs administration law, particularly when it comes to smuggling, including drug trafficking. The convention was given the force of law in Ireland by the Customs and Excise (Mutual Assistance) Act 2001. I do not propose to make a long speech on the regulations as members have already had a background note which I hope has been helpful.
I will put this matter in context before getting into the detail of the regulations. There is a long history of co-operation in customs matters and members will be glad to hear this co-operation has been increasingly successful in helping customs administrations to deal with smuggling. As recent events have shown, the need for effective co-operation by law enforcement agencies, including customs bodies, is now greater than ever before. As an illustration of the effectiveness of that co-operation, in the last three years 280 million illegal cigarettes, worth over €72 million, have been seized by Irish customs based in significant measure on intelligence information received under mutual assistance arrangements. Members will appreciate that the loss of this quantity of cigarettes has had severe repercussions for the finances of the criminals involved, both here and overseas. Moreover, the impact on legitimate trade and the knock-on effect on Exchequer returns is also substantial.
I will now deal with the background to the convention. The convention was signed on 18 December 1997 by all member states, subject to adoption, and was concluded under the treaty of the EU to combat cross-border smuggling in the context of a single market without internal frontiers. It also updates the scope of the Naples Convention, which dates from 1967, in several ways. In addition it provides that customs administrations may exchange information on the basis of both formal and spontaneous requests. Those administrations must always act in accordance with their legal legislative powers. The final point, and the reason for these regulations, is that the exchange of information is subject to the highest possible level of data protection to protect the rights of citizens. Such standards of protection impose rigorous discipline on customs authorities and lead to greater accountability for the actions taken by them.
It may be helpful to give some background to data protection provisions, with which the regulations are concerned. At EU level, data protection is covered by a directive which was transposed into Irish law by the Data Protection (Amendment) Act 2003. The Act protects automated data but that protection does not extend to manual data if created prior to 1 July 2003. The Act contains a specific derogation that manual data created prior to 1 July 2003 will not be protected until 24 October 2007.
The impact of this on Ireland's implementation of the convention is significant. Should Ireland wish to implement the convention it could be obliged to provide manual data to other member states if requested. This could include manual data created prior to 1 July 2003. However, if this data is unprotected Ireland would not be able to meet its obligations under the convention, which members would agree would be unsatisfactory for all concerned. In order to avoid such a situation it is proposed to introduce regulations to provide protection for manual data created prior to 1 July 2003. Section 8 of the Customs and Excise (Mutual Assistance) Act 2001 provides that the Minister for Finance may make such regulations for the purpose of enabling the convention to have full effect, therefore, the purpose of these regulations is to extend the existing legal provisions for data protection to manual data created prior to 1 July 2003, which has been processed in accordance with the convention. It is important to note that manual data created prior to 1 July 2003 and being processed for any other purpose will not be covered by the regulation and will be outside the current data protection regime until 24 October 2007. Members will therefore appreciate that the focus of the proposed regulations is narrow and specific and they would not have broad application.
The signing of the draft regulations will enable Ireland to take the final step towards implementing the convention. This will allow the Revenue Commissioners, who will be responsible for the operation of the convention, to build on the existing solid foundation which has been established over many years in the area of international customs co-operation, which has been highly successful. There has never been a greater need to enhance co-operation and arrangements to assist customs administration in preventing serious smuggling related international crime. However, such enhancements must not come at the price of diminished rights for European citizens and the proposed regulations will help to ensure that these rights are fully respected.
Overall, I believe we have a balanced package of measures which enhances enforcement but ensures the highest standards of protection. For that reason, I am confident that these regulations will receive a broad welcome and I commend them to the committee.
The regulations will receive a broad welcome if they help to tighten up abuses in this area. It is frightening to hear of the scale of tobacco smuggling. Tobacco seizures amounting to €72 million suggests a horrendous level of abuse and measures to tighten up this abuse are extremely welcome.
I was also disturbed to read that this year's export figures have been deemed totally unreliable because of the scale of fraud in the exporting and re-exporting, based in the United Kingdom, of products in the electronic sector. The report suggested that the scale of abuse ran to €8 billion in terms of exports impacting on this country, which was only a small portion of all the alleged abuses.
We need to get to grips with the abuse of regulations under the export heading. I welcome the move to tighten up our regulations. It appears they are not sufficiently tight, even with these new regulations. The Minister of State should look at how we have come to a position where the scale of abuse can be so high. Perhaps he should do a trouble-shooting audit of the systems we have in place to see if Ireland has some defects. The Minister for Finance gave an indication in the Dáil that he believed the catching of the British abuse meant that no further abuses were happening in Ireland. It strikes me that if something happened once it can easily happen again. I am not reassured that we have done the sort of audit that may be necessary. I would be interested to hear the Minister of State's comments on that.
Paragraph 5(6) of the regulations states that personal data shall not be treated for the purposes of paragraph 1(a) as being processed fairly unless the Revenue Commissioners have provided the data subject, that is, the person from whom the information was got, with various information. Such information is outlined in paragraphs 7 and 8. If, before data are deemed to have been processed fairly, it is necessary to go back to the source of the data and read that person his or her rights, is the effect of the measure not destroyed, with those being pursued alerted?
The figures quoted by Deputy Bruton indicate the existence of a serious problem which must be dealt with. The determination of the Minister is not in question. He has made numerous proposals to counter crime, including tax evasion and he has been forthright in his investigations of the type of fraud referred to by Deputy Bruton. This is all the more reason that we watch out for such activity in future.
It is important to have a balanced package. In order to make full use of data and to maintain a balance with the individual rights of European citizens we must be sure the data are accurate, fair and have been obtained lawfully. On the other hand, it is imperative that law enforcement agencies have access to the data. The principal provision is that data which will be made available to agencies to counter smuggling crime are accurate, fair and have been obtained lawfully. When the original Data Protection Act was put in place it was not physically possible to guarantee that all manually stored data would be protected and a 12 year derogation was given. This regulation will cover that narrow aspect. It only refers to information which relates to this derogation.
If a law enforcement agency which is in hot pursuit must send the Revenue Commissioners to someone to check whether all information given complies with the terms of paragraph 5(6), the element of hot pursuit would be undermined. Surely there are circumstances in which data can be released, perhaps on the basis of a warrant, without alerting the possible source that the forces of law and order are hot on their tail? I may be missing the point but this seems a little strange to me.
I am not an expert in crime detection. However, I assume that many finds and seizures are based on good intelligence and information swapping across a number of borders, allowing immediate swoops to be made. Paragraph 7(11) of the regulation provides that the obligation in paragraph 7(10) shall not apply in any case where it would prejudice the objectives of the convention. This provision satisfies the requirements of section 8(2)(e) of the Customs and Excise (Mutual Assistance) Act 2001. A balance must be achieved. I hope the balance is in favour of the authorities which have responsibility for dealing with criminal activity. I am sure others would want the balance to favour the individual. I would prefer it to favour the application of the law.
I welcome the Minister of State to the committee. I understand why this matter has been brought to the committee and I endorse the measure.
I would be worried if a regulation was to tie one hand of a customs officer behind his or her back in the pursuit of crime. Smuggling has been a way of life on the Border for many years and it is alarming to learn that this has extended to the port of Dublin. Individuals, gangs and organisations — some with a political face — have lived off smuggling and illegal activities for many years. I would not want to see those who attempt to stamp out such activity constrained by this convention. If anything, a heavier hand is needed at this time.
Those who pay their taxes and expect a public service return in that regard should not have to read in the newspapers or hear from Ministers or others that there is a great deal of illegal activity taking place in Ireland. Many people believe they are above the law. There is an approximate €70 million worth of illegal activity in cigarette smuggling. That is but one aspect; there are several other areas in which such activities are taking place.
What galls me is that many people, in the interests of fair play and justice, fail to condemn them. I have not heard, during my time in public life — some 14 or 15 years — one condemnation of such groups and organisations whom we all know are associated with others with a political face. It is time that politicians, as democrats and those who serve the public, spoke up on this matter. The belief among ordinary citizens is that too much of this has been allowed to go unchecked and unheralded on the basis of some silly and romantic idea about republicanism. I am not in that mode. I support and believe in many things, such as the aims of my party but I do not support criminal activity. Those who pay their taxes are entitled to know of such illegal activities, which deny the State of funds to provide necessary services.
I welcome the introduction of these regulations. I would like to ask one question related to a point raised by the Minister of State. He stated that approximately €72 million in terms of illegal cigarette smuggling had been seized by customs in the past three years. What percentage does that figure represent? Is it 10% or 25% of the total amount of cigarettes smuggled? As excise duty is imposed on cigarettes on a yearly basis, it is becoming more popular for individuals to engage in smuggling. There must be a stage at which the Minister of State and his Department takes account of the negative return in increasing excise duty on them.
I agree with Senator Finneran's sentiments on the need to clamp down authoritatively on criminal activity and on the fall-out in terms of spend resulting from the gains in that regard. The regulations currently being introduced are part of an overall EU group of regulations to deal with a specific element of data. An indication of the success in this area is the seizure of €72 million worth of smuggled cigarettes. That has come about as a result of the flow of information in this area. This regulation seeks to avoid a situation where an individual may decide to claim against the State following a conviction or seizure thereby stating the data exchanged or used was obtained illegally or did not comply with EU regulations. Without this regulation, there could be scope for legal action if such a situation arose. Rather than limit Garda or customs activity, this regulation will enhance their powers.
On Deputy Nolan's question, I do not have information in terms of what percentage the sum of €72 million represents. I am equally surprised that an operation can afford to lose €72 million and survive. I am sure the seizure has hit hard in terms of cost. Most of the profit earned in such a business comes from avoiding excise duty. I am sure the cost manufacture of the cigarettes is minimal in terms of the overall cost. We can only be concerned about the loss to the Exchequer and where that €72 million would have been spent had smuggling operation been a success. The figures in terms of overall excise duty are readily available.
We will conclude our consideration of this matter.
Perhaps I might be permitted to ask one more question. This matter may not be appropriate to the Minister of State's area of responsibility. It has been intimated recently that in terms of the transportation of cigarettes, it is safer to move them by sea rather than by road. That is extraordinary. We must introduce whatever measures are necessary to stamp out such activity.
I do not disagree with the Deputy's remarks but I am not in a position to comment on the security attached to the transport of cigarettes. They are available in every shop in the country. Perhaps there will not be so many around from next Monday.
We have concluded our consideration of this matter.