I move:
That Seanad Éireann approves the following Regulations in draft:—
Criminal Justice Act, 1994 (Section 44) Regulations, 1996
a copy of which was laid in draft before the Seanad on the 13th day of March, 1996.
Criminal Justice Act, 1994 (Section 44) Regulations, 1996: Motion.
I am pleased to seek the approval of Seanad Éireann for the making of these regulations under section 44 of the Criminal Justice Act, 1994. The purpose of the regulations is to enable drug trafficking money being imported into or exported from the State in the form of cash to be seized. They prescribe the amount of money above which suspected drug trafficking cash may be seized under section 38 of the Criminal Justice Act, and their enactment will allow that section, and Part VI of the Act, to be fully implemented
Section 38 empowers the Garda Síochána and Customs and Excise officers to seize cash relating to drug trafficking which is being imported into or exported from the State provided the sum is not less than a certain amount to be prescribed under section 44. Under these regulations I propose to prescribe that amount as £5,000. This is an important step in the progressive implementation of the Criminal Justice Act, 1994, which, among other things, provides for the recovery of the proceeds of drug trafficking and other serious offences and creates the offence of money laundering.
This important Act was introduced by my predecessor, but regulations were required to implement many of its sections. The impression was given that once the Act was passed, its provisions were available to the Garda and the customs authorities. Since I took office my first priority was the implementation of the anti money laundering measures contained in sections 32 and 57 of the Act. I made a commencement order bringing sections 32 and 57 into operation with effect from May last year.
Section 32 of the Act requires financial bodies to take certain steps concerning the identification of customers in order to assist in the detection and prevention of money laundering. In particular, the section obliges a financial institution to identify any person for whom it proposes to provide an ongoing service — for example, opening a savings account — or for whom it undertakes a transaction involving a sum in excess of £10,000. Much work had to be done to put in place the necessary procedures to enable the provision to be operated. The other provision which I brought into effect as a priority, section 57 of the Act, provides that a financial body must make a report to the Garda Síochána where it suspects that money laundering is taking place in relation to its business. This reporting requirement is a potentially important development in the law against money laundering.
Since the implementation of section 57 in May last year, 199 notifications from May to December 1995 and 86 notifications from January to the end of April 1996 were made to the Garda of suspicious transactions. It is not yet known whether all the transactions are anything other than innocent. It could be money from inheritances, etc., but the Act is working in the sense that financial institutions are making reports to the Garda. Each transaction is examined and if the Garda is satisfied the source of the money is drugs or other illegal activity, action will be taken in the courts. The advantages of section 57 of the money laundering legislation are already apparent.
My next priority was to give full effect to Part VI of the Criminal Justice Act, concerning the seizure of drug trafficking cash, and the draft regulations before the House will achieve this move. However, I once again had to ensure the necessary arrangements were in place at operational level so the new powers could be used effectively. I am satisfied that, with the establishment of the Garda national drugs unit and the development of a memorandum of understanding between the Garda Síochána and the Customs and Excise, the way is now clear for the co-ordinated implementation of Part VI of the Act.
Drug trafficking generates large amounts of cash and supplies of illegal drugs are generally purchased in cash. I heard some of last week's debate in the House during which Members attempted to put some ball park figures on the type of cash involved in drug trafficking. Consignments of cash which are derived from or intended for use in drug trafficking are regularly moved across international borders. Section 38 of the Criminal Justice Act gives our authorities the power to seize such consignments. With the passing of the regulations a member of the Garda Síochána or a Customs and Excise officer will now be able to seize and detain cash which is being imported into or exported from the State where the amount is of a value of £5,000 or more and where the garda or Customs and Excise officer has reasonable grounds for suspecting that the cash is derived from, or is intended to be used in, drug trafficking.
Any cash so seized can initially be detained for a period of 48 hours. An order for the continued detention of the cash may be made by the District Court for a period up to three months and further such orders may be made for a total period of two years. Furthermore, the seized cash may be forfeited if, on application to it, the Circuit Court is satisfied that the cash represents drug trafficking proceeds or was intended for use in drug trafficking.
In prescribing the minimum amount of cash that may be seized, I have opted to set the sum at £5,000. This is a strong measure, but I am confident that its effects will be felt by drug traffickers and not by anyone legitimately taking cash into or out of the country. The limit of £5,000 and the terms of section 38 of the Act will ensure that this measure is properly targeted. I aim to ensure effective action is taken by the Garda Síochána and the Customs and Excise in seizing cash consignments of the size associated with drug trafficking. In electing for the amount of £5,000, I am proposing tougher measures than those in effect in the UK, for example, where the amount is fixed at £10,000. This demonstrates the Government's determination to tackle drug trafficking and in particular to punish those who deal in drugs by depriving them of their illegal gains.
This is an important step in the implementation of the Criminal Justice Act. Most of the Act is now fully in force and a great deal of work has been done in my Department preparing the ground for the implementation of the remainder of the Act. I will be bringing forward further measures that will bring into force the remaining parts of the Criminal Justice Act, 1994, which do not yet have effect. Let me briefly outline my plans in this regard for the information of the House.
I will shortly bring into operation Part V of the Act. Part V provides that anything that would constitute a drug trafficking offence if done on land in the State will also be an offence if done on an Irish ship. In addition, the Garda Síochána, Customs and Excise officers and members of the Naval Service will be empowered to stop, board, search and detain a ship which is suspected of being used in drug trafficking, even if the ship is outside Irish territorial waters. This will form an important element in our co-operation with the international community in combating drug trafficking at sea, a problem which of its very nature demands a united and co-ordinated approach.
I will also be greatly strengthening Ireland's role in international co-operation against crime by bringing into operation Part VII of the Criminal Justice Act. This will enable Ireland to sign and ratify the European Convention on Mutual Assistance in Criminal Matters, a long overdue development in our criminal law and one which will enable us to play a full part in the co-operation with other countries which is so necessary in today's world. In addition, I will be bringing regulations before this House, under Part VII, which will provide for the enforcement, by means of orders under Irish law, of orders made by foreign courts for the confiscation and forfeiture of property acquired by or as a result of drug trafficking offences or other serious crimes. These measures will strengthen the hands of the law enforcement agencies in this country and abroad in dealing with the drugs menace.
Tough measures must be taken to deal with the drugs problem, and the impact it has on other crime. These regulations, in conjunction with the other developments, will send out a clear and unmistakable signal to anyone involved in drug trafficking that we mean business. I ask the House to endorse the making of these regulations by approving the motion before it.
When taking up office I immediately took out this legislation which had been passed before I entered office and realised that many of its vital sections were only enabling sections. Although the Oireachtas had passed them, they required regulations and I set about putting those regulations in place. I have heard certain criticisms about waiting until May of last year to implement sections 38 and 57. I want to make it clear that when I took office there had already been an arrangement made with all the financial institutions. They needed a period up to April to train their staff because it was going to be an offence for them if they did not make this information available through lack of knowledge or experience.
I am satisfied that since I took office, I implemented the sections involving this State which were immediately necessary. This regulation involves money that might be going out of or coming in to this country. The various elements of the legislation are being drawn together gradually so that people involved in drug trafficking cannot slip through the net. I hope that when this regulation is in place along with the remaining regulations we will have watertight legislation to cut off drug traffickers from coming into this country. There are other methods which they use and we must continue to look at our legislation to do that but I am satisfied that, in implementing section 44, we are taking another step in anti-drug trafficking legislation.
I thank the Minister for introducing this measure. I do not regard this as an appropriate time to have a general debate on the drugs issue because we are dealing here with a specific statutory instrument. The Minister has made some general remarks to which I would like to respond.
The Minister has been properly advised on the figure of £5,000. Will she give some rationale on why that figure was selected as the prescribed sum? One would not like to think that, by bringing in single amounts of £4,999, drug traffickers could escape notice or liability. Am I being unduly alarmist? If that is the appropriate amount, it will be supported on this side of the House. We are prepared to co-operate and assist the Government. Fianna Fáil does not have a monopoly on concern about the drugs issue. The Government has a genuine concern, but I do not agree with everything it does. There are internal complications in dealing with the drugs issue but the Taoiseach said yesterday, in response to the leader of my party, that he was concerned about this problem and it was at the top of the Government's agenda. I believe this to be the case.
We do not know what prosecutions are going to take place as a result of notifications. It would be interesting if we could monitor statistically the number of indictments or prosecutions which will arise out of these notifications because we would be able to evaluate whether the system is working. If, at the end of that period of notifications, there have been two convictions out of 199, that will be a worry.
The Minister spoke of not wanting anyone to slip through the net. Nothing should be outside our consideration. My concern is that some solicitors use the cloak of legal representation to channel funds on behalf of people who may or may not be involved in drug trafficking. There are certainly a few cases. It might not always be a case of a solicitor knowing a person is a drug trafficker, but there does come a time — they may have a client who sails in and out of some inlet in County Cork or Kerry and is at the same time ferrying large amounts of money through a client account — when a reasonable suspicion can arise. Some solicitors in this country have a fair idea that they are acting in a legal capacity for drug traffickers.
I suspect — I have not yet reached a definitive opinion on it — that this mechanism is a possible way of circumventing the provisions of the Criminal Justice Act, 1994, and I strongly urge the Minister to look into this matter. It would not be enough for the Minister to say that this is a matter for the Law Society. The society is primarily charged with the responsibility of ensuring that all the books of its solicitors are in order. Its real concern is for the clients of the solicitors, clients' accounts, etc. I ask the Minister to examine that issue in the light of drug trafficking.
I said I would not make any general remarks about the drugs problem. The last time we had a general debate on the matter the Minister accused me of trying to stir up the crisis by calling it as such. I cannot claim to have been in public life as long as the Minister but I have been a member of an inner city local authority area since 1985. This was a bad problem in the inner city in the late 1980s but the drugs situation is currently just as serious in parts of the inner city. In parts of my own area, not a million miles from here, unfortunate drug addicts — they are the victims of the mobsters and traffickers who prey on them — are openly injecting themselves with drugs on waste ground to the knowledge of the entire community. When you go to the door of the person next door and try to explain to him that you are doing something about the drugs problem, you are not believed. The problem is so serious that anything we can do to alleviate the matter must be done.
In another part of my constituency, somebody whom the Garda believes is involved in this trade has bought an expensive house but has no visible means of support. The Minister discussed the matter at the Select Committee on Legislation and Security. However, there is a general feeling of bewilderment among the public that these people who have no visible means of support can live in such luxurious houses. Is the Minister entirely satisfied that the Revenue Commissioners or the Garda have the legislative ability, the resources or the manpower to get to the bottom of this matter?
Several requests were made this morning for more debates on the crime situation. People will want to know how many of these people's means are examined. How many of them are given the once over? Some people say that even if officers of the Revenue Commissioners were to call to the drug barons' houses, they would be told that where they live was known and that they would "get" them. Is there any support for people working in the Revenue Commissioners? If their houses are or are threatened to be burnt down by a drugs baron, what protection do they have? Are they indemnified by the State? Will they get full protection from it? Everything we have should be mobilised for this fight. Even changing the onus of proof in the case of drug trafficking offences should deserve serious consideration. Some people might say this might be illiberal but the situation is so grave that such extreme measures may be required.
I do not know if the Minister read the piece in the The Irish Times on 13 May concerning the speech made by the leader of Democratic Left at its Ard Fheis. It said that: “Democratic Left will not play any part in the erosion of civil liberties and we will protect the rights of those who are victims of crime with the same tenacity.... We must support local communities in their fight against drugs”. The tone and emphasis of this speech left me a little worried about the Democratic Left input into the law and order policy of this Government.
The Senator is two minutes into injury time at this stage.
I have tried, and will try, to be as constructive as I can; but if the crisis gets much worse and there is a problem with Democratic Left, the Minister should come to this House and she will get support from this side for measures to beat the drugs barons.
Is that an invitation to a coalition?
Stranger things have happened.
I welcome the fact that section 44 of the Criminal Justice Act, 1994, will now come into effect. It is an important part of the Act. The fact that, as already mentioned, many of those involved in drug trafficking lead very affluent lifestyles and are able to move cash in a reasonably easy way is of some concern and must be stopped in every way possible.
One of the most important things the Minister said in her speech was that tough measures must be taken to deal with the drugs problem and the impact it has on other crime. Few people would not agree with that and not support the Minister's actions in this regard. I congratulate the Minister for the progress she has made since she came to office in trying to tackle this problem by bringing in or preparing legislation which still has to come on the stocks and in implementing the powers available to her. The Garda should be supported and be given the powers and facilities to tackle this menacing problem.
Under these regulations the Garda Síochána and Customs and Excise officers will have power to seize cash relating to drug trafficking which is being imported into or exported from the State, providing that the sum is not less than the amount of £5,000. This is an important step in progressing the Criminal Justice Act. Financial bodies have a responsibility and a duty to ensure they are not used by drug traffickers who abuse young people by trading in their deadly merchandise.
Financial institutions now have a duty and will be required by law to report questionable transactions of over £5,000. It is significant that 99 notifications were made between May and December last year and 86 notifications were made up to the end of April this year. That demonstrates how effective this section of the Act can be. There was a total of 185 notifications in 12 months before all the powers under the Act were implemented. One must welcome that result and congratulate the Minister on it.
I also welcome the establishment of the Garda national drugs unit. I hope it will be effective and will be given the resources to ensure its effectiveness in combating this terrible problem. In 1989 I put a motion before the House which emanated from the Garda Síochána. It reflected their concern that opening the borders in Europe would have an effect on drug trafficking. As early as 1988 it was signalled that this issue could arise with the opening of the borders. The people who were concerned, the Association of Garda Sergeants and Inspectors, were quick to indicate that this would happen and now we must tackle it.
During the Irish Presidency we will have a duty to promote European coastal drug policing arrangements. It will be impossible for Ireland to effectively police the full extent of our coasts and there must be European involvement. This matter has been discussed in the European Parliament on a number of occasions and it has been championed by John Cushnahan. This House should support the call for assistance from Europe to police our coasts, because it is not only an Irish problem but a European problem. The number of seizures throughout Europe is growing each year, but they still reflect only about 10 per cent of the level of drug trafficking. That exposes the size of the problem which must be tackled.
The European drugs unit in The Hague has police liaison officers from all member states and they deal with the control of drugs and drug trafficking. Seventy seven per cent of their time is taken up with dealing with the drugs situation and the balance is consumed by dealing with money laundering. The time and effort they spend on the money laundering problem is growing every year. It is seen by the police in Europe as an important means of tackling the drugs problem because it means one can punish the drugs barons where it hurts most, in their pockets. The amounts of money involved range from thousands to millions of pounds and if those sums are confiscated it will hit the barons very hard.
Drugs are a European problem. The Minister is taking action today to ensure that we deal with the money laundering problem in our jurisdiction, but it is important that it is dealt with on a European basis. The European drugs unit investigates hundreds of companies involved in money laundering. Compare the illegal movement of money with the illegal movement of people — it is 12 to 14 per cent in the case of illegal money while illegal movement of people amounts to 4 per cent. The European drugs unit should be strengthened and supported and should be involved in policing the European coasts, especially the Irish coast. In relative terms the Irish coast with its many inlets is very exposed. We have already seen large seizures taking place in Cork and Clare, but the worry is how much are we seizing. Is it 10 per cent or 25 per cent? I believe we would be lucky to seize 20 per cent.
I welcome the Minister's announcement of the early implementation of further sections of the Act. When the Act was going through the Seanad we discussed its provisions in detail. It is an effective means of trying to control the drugs problem. The early implementation of more sections of the Act should ensure that the Garda will have more effective powers to deal with this problem which is causing havoc in young people's lives. Senator Mulcahy selectively quoted from statements made by the leader of Democratic Left, Deputy Prionsias De Rossa. He would have been more honest if he had quoted the full text. Democratic Left fully supports control of the drugs problem; nobody is more supportive than that party's Deputies. In their constituencies they can see the effect drug barons have on the ordinary people who are the victims. The Deputy should have been less selective in his quote.
The first paragraph of the motion states:
That Seanad Éireann approves the following Regulations in draft:—
Criminal Justice Act, 1994....
Imagine if that date had read 1974; would we be in quite such a mess with drugs as we are at present? It is very sad that we have taken so long to react to the serious drugs problem. We are all to blame. I remember attending an IMO meeting years ago and being shown small amounts of drugs by those who were involved in the drugs unit in Jervis Street, but we did not take it seriously enough. If we had introduced legislation and regulations such as this 20 years ago we might not be in this terrible mess with drugs.
The regulations are very important. For too long we have tackled the unimportant people in the drugs trade, the people who deal with only small amounts of money. I was interested to hear Mr. Hynes of An Post speaking on behalf of the Dublin Chamber of Commerce. He said that the direct cost of the drugs problem to Dublin businesses was about £150 million. We are talking about huge problems and huge amounts of money and I am glad the Minister is tackling it.
The sum of £5,000 is the correct figure to include in the regulations. If somebody is carrying more than £5,000 in cash it would be nice if they could account for it. If the Garda meet somebody travelling between the city centre and the airport with £5,000 in their possession, can they detain that person or must they wait until the person is on his or her way out of the country? Do sections 32 and 57 of the Act cover financial institutions in the financial services sector? Huge sums of money can be transferred very easily electronically and I do not know if those institutions are covered in the same way as building societies, banks and so forth. Could this be a possible loophole?
I was horrified to hear Senator Mulcahy's suggestion of corruption even among a small number of solicitors and that they would use client accounts to move money. I was dismayed, but I presume he must have grounds for making the suggestion. I hope that if he has information in that regard it will be investigated because it would be terrible to think that the legal profession, in which we have such confidence, could become so involved.
Like Senator Neville, I hope that Part V is implemented as soon as possible. The Minister will be familiar with Mr. Barry Galvin, the State solicitor for Cork, who for the past ten years has highlighted the problem of the importation of drugs through the Cork area. It is impossible to police this area without international co-operation because we lack the resources to do so. During Ireland's Presidency of the EU, I hope the Minister will show our willingness to co-operate but will also request international co-operation on this matter.
I hope people who are offered large sums of money as cash payment will inquire about the origin of such money. People seem to find it excusable if such money is "hot" because tax has not been paid on it. However, they must inquire if that money originated in the drugs trade and, if so, realise the damage that trade is doing to people throughout the country. No one would object if this money was obtained from the sale of property, etc. Anyone who has dealt with drug addicts, attended the clinics in which they are treated or visited the penal institutions in which they are housed will be aware of the reality. Drug addicts make up the majority of inmates in women's prisons. Property, goods and cash are very important but the devastation visited upon people with drug problems is incredible. As I understand it, some payments involve major amounts of cash and I hope people will begin to question the origin of such money. The most amazing people seem to be involved in what must now be termed the drugs "industry".
I welcome the opportunity to contribute to this debate. I regret that time is not available to fully discuss the implications. We are dealing with what can only be described as a plague or an epidemic which is undermining the core of society. As a representative of a rural constituency I must state that, while the problems, law-lessness and vigilante actions in Dublin have horrified everyone, this problem is not confined to the capital city. The stable, healthy and happy communities with which we were familiar in towns and villages are being undermined by this plague. For this reason I support any action that will rid us of that plague and change the nature of our country.
I am glad to see that this matter now involves international and domestic co-ordination and co-operation. This is very important. However, I will begin by referring to Senator Henry's point about confiscating sums in excess of £5,000. The world has changed since we last talked in terms of "carrying" money. The reality is that money now takes the form of a message which can be transferred between financial institutions at the press of a button. This is being done through respectable establishments and banks in Switzerland and elsewhere. Money is being transferred across the globe by computer in the form of a message that someone has funds to invest. Money is no longer carried through airports in bundles of £5,000 or £10,000. In some cases it might be, but generally wealthy industrialists do not carry money with them in bags.
I wish to raise a number of fundamental issues about the financial services and offshore accounting that have become a feature of modern society. When addressing this issue, I feel like Cato in the Roman Senate who stated "Delenda est Carthago”. I will not translate this quotation to my colleagues who have classical allusions.
I learned Latin at the local CBS.
Numbered bank accounts which have become a feature of establishment banking throughout the world, particularly in Switzerland, are an open invitation to horrific criminals engaged in the harvesting or international distribution of illegal drugs. The economy and society of Galicia in Spain have been undermined because it is situated on the drugs trail. What action is the international community taking to deal with this problem? These people must not be permitted to continue to operate with impunity in this way. It is time the Minister for Justice and her colleagues in Government insisted that this system be stopped.
How are we to know the origin of funds invested in the most respectable banks in the world? Such funds may have been "earned" off the back of oppression and suffering. The regulations involve tackling people carrying £5,000 to or from an airport but this is not the level at which we must deal with this problem. These people are very sophisticated. Can the Minister propose initiatives to deal with this problem? If not, our response will be reactionary as it has been in other areas.
My second point relates to the international co-ordination. If each country decides to treat drug addicts caught committing criminal offences — drug barons actually welcome this development — governments must effectively co-ordinate programmes at international level to place these addicts under their protection and provide a regulated and controlled supply of therapeutic drugs. This must be done because, in the wrong hands, many drugs used for normal medical purposes can be deadly. One of my colleagues with medical expertise recently stated that heroin is properly and effectively used for therapeutic medical treatment. Heroin becomes dangerous when it is abused. There is a strong case for governments, through their Ministers for Health, stating very emphatically that they cannot win if they merely react to criminal drug barons. However, governments can act together to reduce the demand by effectively regulating the source of supply of illegal drugs.
People involved in drugs agencies in America informed me that the criminal barons involved in the distribution and harvesting of illegal drugs want governments to respond in a reactionary manner. They can control the supply of drugs outside the law and make millions in much the same way as the bootleggers during Prohibition in America in the 1930s. We must begin to consider how international governments can act together. This must be done in conjunction with my suggestion relating to financial services. How will control of the supply of drugs be taken out of the hands of drug barons? It is time we took the necessary steps in this regard. I welcome co-ordination between governments but I worry that we are reacting and making commitments which will not lead to the desired changes being made.
Drug barons are permitted to operate outside the law, which is what they want to do, and we react by introducing new powers and regulations. They do not care about powers and regulations. They have their own corrupt empire, which grows daily more menacing and powerful than the democratic states we try to represent. It is time we introduced new, progressive and effective thinking into this debate to ensure we are on top of the problem.
I was interested in what Senator Neville said about how 12 to 14 per cent of money moved internationally is legal.
I was speaking about the work of the EDU.
Yes, that group in Holland would have a reasonable insight into the situation. They are only talking about 12 to 14 per cent of the money being moved which they have been able to identify. It is time for the governments of the world — and our European colleagues have a special responsibility in this area — to work together and look at this.
Subject to what I said, I welcome the Minister's domestic regulations and restrictions. However, I do not think she indulges in the illusion that, even if this was really efficient, this island could effectively keep out this horrible plague. We can do much more in terms of co-ordination but I do not want to give the impression that reacting here will do it alone.
The training and education of our Garda is very important. We have an excellent college in Templemore which is internationally recognised as a prototype of the standard of academic and practical training. However, there is great unease there at the moment about the Minister's proposals to designate the college as a Garda district. The college is not just another Garda district in Cork or Kerry; it is a very different element. In terms of its representation on the Garda representative body, I ask the Minister to look at that in a more enlightened way. It is very different to the Nenagh, Thurles, Clonmel or Waterford districts.
I appreciate the capacity and commitment of the Garda Síochána. We have to realise they have a very special role to play, particularly in the fight against drugs. We will do anything we can to help them.
I thank Senators who participated in this debate which, as they all said, is specifically dealing with the making of regulations under the Criminal Justice Act, 1994. It is obviously not the time for a full and wide scale debate on drugs. I have already been in this House a number of times for such a debate, and I know the Minister, Deputy Noonan, was also here recently.
As the debate evolves I, as Minister for Justice, am increasingly subject to questions and comments which are more relevant to the areas of education and health. The justice area is the end of the line for people who are already addicts and have become involved in the area of criminal justice. That is why the Government's proposals in July 1995 put forward the need for a co-ordinated approach between all the relevant Departments. Customs, the Revenue Commissioners, the Departments of Health and Education, employment policy and policies for marginalised communities all play a part in tackling the scourge of drugs. As Minister for Justice, I am doing all I can to tackle it from my side.
A number of Senators raised the issue of whether £5,000 is an appropriate sum. As I said, the UK has pitched the sum at £10,000, which I think is too high. I took some soundings; business people sometimes carry sums of up to £5,000. I feel £5,000 is a sufficiently low figure on which to question a person about why they are carrying so much money. Nowadays, with plastic and other methods of moving money, legitimate business people do not tend to carry bags of cash in their suitcases. However, I will keep it under review. If £5,000 turns out to be too high or if the Garda spend their time questioning legitimate business people — although I think it is very foolish to carry £5,000 or £10,000 in cash for legitimate reasons — we will look at it again.
Senators said that not all drugs money flows in this way. However, much of it does because it is a cash business. Drug dealers do not accept a cheque as payment for a stash of heroin. It is very much a cash oriented business. There is a great deal of money laundering, involving illegal business transactions, through computers. One bank manager said to me recently that their bank lost about £5,000 in ordinary crimes, such as robberies, in 1994 but it lost hundreds of thousands of pounds in white collar crime through the electronic laundering of money through the system without any cash changing hands.
Section 32 covers all bodies licensed to carry on banking business under the Central Bank Act, 1871. It also covers all bodies authorised to carry on such business under European regulations. All financial centres are covered and must report money transactions over £10,000 under section 57 of the Act.
Senator Mulcahy raised a relevant question to which I do not have the answer yet because I do not know how many prosecutions have arisen from the 280 notifications under the regulations which I implemented last May for the reporting by institutions of suspicious lodgments over £10,000. However, that will become apparent in the fullness of time. Two cases were sent forward by the DPP in 1995. One of them collapsed because the case did not proceed to court. In the other case, the assets were not confiscated because the person was acquitted. However, I have no doubt that some of those 280 notifications will lead to serious investigation and, perhaps, prosecution. It is for the DPP and the Garda Síochána to bring that to finality.
Senator Mulcahy said he was fearful some solicitors might use the cloak of legal representation to channel and launder funds for their clients. Under section 31 anyone, including solicitors, laundering the proceeds of crime is guilty of an offence with a minimum penalty of 14 years imprisonment. Therefore, solicitors cannot hide. Senator Mulcahy might have been getting to the point that solicitors per se are not designated as financial institutions. However, they still can be found guilty of assisting, aiding and abetting money laundering exercises. As we see the Act operating, I will keep section 32 and section 57 under close review and scrutiny. It is a little soon to say how well it is working other than to report that there have been a number of notifications, which is a sign that it has been working.
Senator Henry raised the question of whether somebody driving from the airport might be stopped. Section 38 applies to cash being imported or exported. This must be applied by the Garda and the customs in the circumstances of a case. There must be evidence that the persons were travelling to or from the airport or seaport. It is not just a case of stopping people on the basis that because they are five miles from the airport they must be going there. Other laws cover situations where the Garda stop people with large sums of money on them where they suspect that a felony has been committed.
However, there will be a common sense, practical implementation of this regulation. As it stands now the customs have power. If they do not examine people at the airport they can stop them on their way from the airport on the basis that they have reason to believe that they have smuggled or brought goods into the country and have not had customs duties paid on them. It is not, therefore, just a situation of them being in the immediate curtilage of an airport or seaport; there must be some evidence that they were on their way to export or import this money. It will depend on the circumstances. No attempt has been made to define or curtail the meaning of the words "import" or "export".
These are new powers. They will have to be watched carefully to ensure they are operating properly. When this legislation was discussed in the Dáil and the Seanad in 1994, before it was enacted, an examination was made of these loopholes. I am now in the process of putting these regulations into place.
Increasingly, the issue of the white collar transfer of assets etc. is being looked at by large businesses. Price Waterhouse undertook a major study on a number of businesses to ascertain the extent of this fraudulent behaviour. The situation is very frightening; it is going on behind the shirts, ties, collars and good suits of what are otherwise referred to as respectable business people.
It is taking place on the boards of some of the international banks.
This may be something about which Senator O'Kennedy has direct knowledge. I do not want to accuse any bank of this. Nevertheless, large amounts of money are being fraudulently obtained and stolen from many financial institutions.
Senator Henry mentioned a figure with regard to the profits from drugs. I visited the EDU offices as recently as Tuesday morning. I was provided with assessment by INTERPOL that the profit annually from illegal drugs is £300 billion. This is twice as much as the legitimate profits from the pharmaceutical industry. People in Ireland are not making £300 billion; it is a world-wide problem of gargantuan proportions. This is why each of us must play our part nationally.
However, the next section of the legislation I implement will be in respect of enhanced international co-operation. For example, Part VII will provide for the enforcement, by means of orders under Irish law, of orders made by foreign courts for the confiscation and forfeiture of property acquired by or as a result of drug trafficking offences. Criminals will not, therefore, be able to hide their assets in this country once this section is operative and there is enhanced co-operation.
Already, under the EDU, there has been huge co-operation between liaison officers from country to country. We are involved daily in the EDU through our two representatives there, Inspector Noel Keane, and our other representative who is an expert on computerisation. They are dealing with their colleagues on a daily basis. Many investigations are ongoing which cross numbers of countries and, more frighteningly, which involve hundreds of companies with regard to money laundering exercises. Where there is a suspicion that a transaction in a bank is in some way illegal it is phenomenal and frightening to note how the tentacles spread out, not only from the country concerned but throughout Europe and beyond.
This is what we are dealing with nowadays. None of us can be complacent that in any regulations we introduce we have the full answer. However, I assure Senators that we will watch this legislation take hold and examine it to ensure that it does what we want it to do. In this respect I will pass on to the Minister for Finance some of the points that have been made regarding exchange controls and the movement of money. The House can be assured of the involvement of my Department in bringing in the regulations that we feel the Garda need here.
Senator Henry said that this regulation should have been dated for 1974 or even 1984. I do not believe that we as a society realised in those years just how virulent this problem of drugs could become as it progressed. We are realising it now. The drug trafficking legislation which will allow for seven days detention was not allowable in the 1980s. Senators and Deputies in this House and the other House rejected that kind of legislation on the basis that it was too penal and would take away too much liberty. However, we have sadly moved into a situation where we must have this kind of hard legislation to tackle what is a major problem.
I thank Senators for their support in implementing these regulations. They can be assured that I will return to the House with the remaining regulations so that we can have the whole of the Criminal Justice Act, 1994, implemented.
Question put and agreed to.
An Leas-Chathaoirleach
When is it proposed to sit again?
On Wednesday, 5 June 1996 at 2.30 p.m.