Seanad Éireann debate -
Wednesday, 24 Nov 2004

Vol. 178 No. 17

Proceeds of Crime (Amendment) Bill 1999: Second Stage.

Question proposed: "That the bill be now read a Second Time."

Minister of State at the Department of Transport (Mr. Callely)

I am pleased to have the opportunity to speak in the House. I was with some Senators last night who are, should I say, of the right political persuasion or socialist persuasion and we had an enjoyable night. Some of the females ditched me but I managed to get home safely in any case.

I am pleased to present to the House the Proceeds of Crime (Amendment) Bill 1999 on behalf of the Minister for Justice, Equality and Law Reform. Regrettably, the Minister is unable to be present due to other business and has asked me to convey his apologies to the House for his absence. The original purpose of the Bill, which was published in 1999, was to make some technical amendments to the Proceeds of Crime Act 1996, based on the experience of the operation of the Act since 1996. The Second Stage of the Bill was taken in the Dáil in June 2000, but further progress was delayed pending the outcome of a number of court challenges to the Act at that time. The Bill fell with the last Dáil and was restored to the Order Paper in July 2002.

However, following the publication of the second interim report of the Flood tribunal in September of that year, it was decided to provide additional powers to bolster the work of the Criminal Assets Bureau in pursuing the proceeds of all forms of crime, including corruption. To this end, a substantial number of additional proposals were drawn up for inclusion in the Bill which were moved by way of amendments to the Bill on Committee Stage in the Dáil.

In its amended format as passed by Dáil Éireann, the Bill is now divided into five parts. Part 1 contains standard provisions. Part 2 deals with amendments to the Proceeds of Crime Act 1996 while Parts 3, 4 and 5 deal with amendments to the Criminal Assets Bureau Act 1996, the Criminal Justice Act 1994 and the Prevention of Corruption (Amendment) Act 2001, respectively. I propose to deal with the main proposals in the Bill, including those changes which have been made in the other House.

Sections 1 and 2 of Part 1 contain the preliminary and general interpretative provisions. Part 2 comprises nine sections and contains the amendments to the Proceeds of Crime Act 1996. Section 3 substitutes new definitions in that Act for "applicant", "proceeds of crime", "property" and "respondent". The new definition of "applicant" is a broader definition which will give the Criminal Assets Bureau the flexibility to take proceedings in its own name in addition to taking proceedings, as is already the case, in the name of a member or authorised officer of the bureau.

The new definition of "proceeds of crime" replaces the reference to "the commission of an offence" in the existing definition, with the words "criminal conduct" and a definition of "criminal conduct" is included in the section similar to that used in section 21(7) of the Criminal Justice (Theft and Fraud Offences) Act 2001 in respect of the offence of "money laundering". This change means that it will not be necessary for the CAB to show that the criminal conduct was a particular kind of criminality if it is shown that the property was obtained through conduct of one of a number of kinds, each of which would be an offence. In addition, the extra territorial references are included in the definition of "criminal conduct" to link into the definition of "property" which can include property outside the jurisdiction.

The new definition also takes account of the recent Supreme Court decision of 17 May 2004 in the case of McK. v. D. which found that the Proceeds of Crime Act 1996 did not apply to foreign criminality. The definition of “criminal conduct” ensures that foreign criminality is now covered by the scope of the legislation where there are proceeds of that criminality within the State. As I have stated, the definition of “property” has been amended to provide for inclusion of a reference to property which is situated outside the State but where there are specific links to this jurisdiction, namely, that the respondent is domiciled, resident or present in the State and all or any part of the criminal conduct takes place within the State.

The definition of "respondent" has also been amended to include a reference to wherever the person is domiciled, resident or present to reflect the fact that in some instances the service of proceedings may be out of the jurisdiction. An additional change provides that not only may the respondent be the subject of proceedings but also a person who, but for the Act, would become entitled to inherit the property of the respondent if he or she died. In addition to the changes in definitions already in the Proceeds of Crime Act 1996, new definitions are included for "consent disposal order" and "criminal conduct". The consent disposal order is a new provision which I will describe when I come to section 7. As I stated, a definition of criminal conduct is included.

The combined changes relating to the definitions of "proceeds of crime", "property", "criminal conduct" and "respondent" will mean that the proceeds of crime legislation will apply in five specific scenarios as follows: where the respondent and the property are in the State and the criminal conduct occurs within the State; where the respondent is situated outside the State but the property is located in the State and the criminal conduct occurs within the State; where the criminal conduct occurred outside the State but the respondent and the property are situated within the State, provided that the conduct constituting the offence is also an offence in the foreign jurisdiction; where the respondent is situated within the State and the criminal conduct occurred within the State but the property is located outside the State; and where the property is located within the State, the respondent is situated outside the State and the criminal conduct occurred outside the State, provided that the conduct constituting the offence is also an offence in the foreign jurisdiction.

Section 3 also inserts a new section 1A into the 1996 Act, the purpose of which is to make it clear that a person remains in possession of property even where the property, after seizure, is in the lawful possession of the Garda or the Revenue Commissioners or is subject to an interim or interlocutory order or any other order of the court or is subject to a letting agreement.

Section 4 is largely similar to section 3, as published. The first change, contained in subsection (a), is a technical amendment consequent to the amendment already made in section 2(a), which provides for applications to court to be made in the name of the Criminal Assets Bureau. The second change makes provision for an interim order made under section 2 of the principal Act to be varied so that income tax or other sums owing on foot of court orders may be recovered. At present, an interim order may only be varied on the application of the person against whom the order is made or by another person who claims to own part or all of the property. This additional subsection provides that the applicant, namely a person who is a member or an authorised officer of the CAB or the Criminal Assets Bureau itself, or any other person may apply for a variation of an interim order for certain purposes. The purposes for which a court may vary any of the terms of an interim order are set out in subsections (a), (b) and (c) of the new subsection 3A and include where the respondent owes a sum under a court order, recovery of any sum owed in income tax and to permit proceedings to be taken for the recovery of any other sum owed by the respondent. This new provision will enable other specified claims on the property to be met from the frozen assets and will facilitate further the tracing of other properties without cost to the Exchequer.

The third change brought about by this section deals with giving notice of an application for an interim order under section 2 of the principal Act and follows on from subsection 3A, which enables the applicant or other person making the application to seek a variation of an interim order. The section also provides in paragraph (d) that a section 2 application is to be made by way of originating motion. Similar amendments are included in sections 5 and 6 with regard to section 3 interlocutory orders and section 4 disposal orders. The purpose of providing for applications by way of originating motion is to ensure a procedure by way of motion grounded on affidavit. As a result, defendants will be obliged to respond to proceedings on affidavit and so avoid the need for particulars and discovery at an early stage in the process. The court will still be able to order particulars and discovery and fuller pleadings when necessary. The effect will be to have the matter in a court list at the earliest opportunity with the full case of both parties set out in a formal manner.

Section 5 is substantially the same as section 4, as published. In subsection (a), it reflects the changes in section 3(a) to allow an action to be taken in the name of the Criminal Assets Bureau. It also introduces a permissive element to the decision making process of the court, by providing that the evidence tendered to it may now consist of or include evidence admissible by virtue of section 8, whereas previously the evidence tendered to it was required to consist of or include such evidence. The effect of the latter change is to provide the court with more flexibility with regard to the matters it may take into consideration in reaching its decision as to whether to make an interlocutory order. The new subsection (b) inserts a new subsection 1A into the principal Act to provide for a consent disposal order to be taken contemporaneously with a section 3 interlocutory order if all the parties are in agreement.

Subsection (c) of section 5 inserts an additional subsection 3A into section 3 of the principal Act. This additional subsection provides that a court may vary the terms of an interlocutory order following an application to it by the applicant or any other person for the same reasons for which it may vary an interim order, that is, to permit enforcement of any court order for payment of any sum, including an order as to costs; recovery of income tax due as well as any fees or expenses arising under section 962 of the Taxes Consolidation Act 1997; and proceedings to be taken for the recovery of any other sum owed by the respondent.

Subsection (d) of section 5 substitutes a new wording for section 3(6)(a) of the principal Act, providing that notice of an application under the section be served by the applicant or other person making the application on the respondent unless the court is satisfied that it is not reasonably possible to discover his or her whereabouts.

Section 6 contains the provision to which I have already referred to allow for an application for a disposal order to be made by way of originating motion.

Section 7 is a new provision for a consent disposal order which was included on Committee Stage. Section 4 of the Proceeds of Crime Act 1996 already provides that where property has been the subject of an interlocutory order for a period of seven years, an application may be made to the High Court by the Criminal Assets Bureau for a disposal order, whereby the property is transferred to the Minister for Finance. This amendment introduces the concept of a "consent disposal order" which will allow for that period of seven years to be reduced on application to the court with the consent of all the parties concerned. However, it contains a protection by providing that the court must not make such an order unless it is satisfied that no serious risk of injustice arises. This provision was sought by the Criminal Assets Bureau based on its experiences to date. It has pointed out that, in some instances, the individuals concerned want to see final closure on the proceedings and do not wish to wait for the seven year period to elapse. The consent disposal order procedure will allow this to happen.

Section 8 amends section 6(1)(a) of the principal Act. At present, a respondent whose property is frozen under an interim or interlocutory order may apply to the court for an order which will enable that person to discharge reasonable living and other necessary expenses. This section will extend that facility to any person who may be affected by either an interim or interlocutory order under the principal Act. For example, it will enable a spouse or dependent of the respondent to make an application to the court in his or her own right for access to the frozen property.

Section 9 amends section 8 of the principal Act in two ways. At present, section 8 of the 1996 Act provides that evidence of belief of the applicant that property is the proceeds of crime must be given in the case of an application for an interim order under section 2, either on affidavit or if the court so directs in oral evidence and, in the case of an application under section 3 for an interlocutory order, in oral evidence only. Under this new provision, such evidence at the interlocutory stage may be given on affidavit or, where the respondent requires the deponent to attend for the purpose of cross-examination or where the court so directs, the evidence must be given orally.

This measure will enable the resources of the Criminal Assets Bureau to be used more efficiently, while, at the same time, safeguarding the court's role and the rights of the respondent. In the second change, a new subsection (6) is being added to section 8 of the 1996 Act. This new subsection is a consequential amendment arising from the earlier proposal which permits the Criminal Assets Bureau, as a corporate identity, to apply for orders under the principal Act under its own name. It provides for a rebuttal of a statutory presumption that a document purporting to have been issued by the Criminal Assets Bureau and signed on its behalf shall be deemed to be such a document and so signed.

Section 10 is included because of confusion which has arisen in the past where proceeds of crime applications for interlocutory orders pursuant to section 3 of the 1996 Act were challenged on the basis, incorrectly, that they are actions for forfeiture so as to benefit from the two year limitation period provided by section 11(7) of the Statute of Limitations 1957. This amendment confirms the decision of the Supreme Court of 17 May 2004 in McK. v. D., where the court upheld two earlier decisions of the High Court to the effect that section 11(7) of the Statute of Limitations 1957 does not apply at any stage to proceedings under the 1996 Act. Section 11 amends section 9 of the 1996 Act to make it clear that an affidavit of property or income which the court may direct a respondent to file is not generally admissible in evidence in any criminal proceedings against the respondent or his or her spouse.

Part 3 comprises 6 sections which amend the Criminal Assets Bureau Act 1996. Section 12 reflects the earlier change to the definition of "criminal conduct" contained in the Proceeds of Crime Act 1996 and provides for consistency between the definition in that Act and the Criminal Assets Bureau Act 1996. The definition of "place" is included with particular reference to the search warrant provisions of the legislation to clarify that the scope of application of such warrants may include a dwelling in addition to any other place.

Sections 13, 14 and 15 replace references to "criminal activity" with "criminal conduct" in those sections of the Criminal Assets Bureau Act, where they occur, and provide consistency with the corresponding new proposals for the Proceeds of Crime Act. Section 5(1) of the 1996 Act provides, as one of the functions of the Criminal Assets Bureau, "for co-operation with any police force, or any authority, being a tax authority or social security authority of a territory or state other than the State." However, civil forfeiture asset recovery agencies like the one recently established in the UK do not come within these categories and hence the need to include in the area of co-operation an authority with functions related to the recovery of proceeds of crime. Section 14(b) provides accordingly.

Section 15 amends the section 14 search warrant provision of the Criminal Assets Bureau Act 1996 in many ways. It provides for the period of the search warrant to be for one week from the date of issuing of the warrant unless a judge orders otherwise, but in any event the period of the warrant shall be no longer than 14 days. This upper time limit on the warrant was included following concerns expressed in the Dáil by several Opposition Deputies. Section 15(b)(ii) makes it clear that the material that can be seized cannot include material subject to legal privilege. Section 15(e) provides that the authority to search also includes authority to make and retain a copy of documents or records and, if necessary, the seizure and retention of computers or other storage medium on which a record may be kept. Section 15(f) inserts a new subsection (6A) modelled on the provisions of section 48 of the Criminal Justice (Theft and Fraud Offences) Act 2001. It provides, in the context of a search warrant, for a bureau officer who is a member of the Garda Síochána to take certain specified actions in the case of computer searches.

Section 16 contains a provision to increase the maximum amount of fines on summary conviction for offences under the Criminal Assets Bureau Act 1996 from €1,500 to €3,000. Section 17 creates three new sections, 14A, 14B and 14C, in the Criminal Assets Bureau Act 1996. The new section 14A provides for production orders to make material available for Proceeds of Crime Act purposes. This new provision is modelled on section 63 of the Criminal Justice Act 1994. It allows a bureau officer who is a member of the Garda Síochána to apply to the court for an order to make material available for the purposes of an investigation into whether a person has benefited from, is in receipt of, or controls proceeds of crime. It outlines the conditions attaching to this order and deals with the operation of these orders and also includes provision for criminal sanctions for non-compliance with the order.

The new section 14B provides for an offence of disclosure prejudicial to making available of material under the new section 14A, more commonly referred to as a "tipping off" offence. This new provision is modelled on the offence of prejudicing an investigation contained in section 58 of the Criminal Justice Act 1994.

The new section 14C provides for application to the court for disclosure of the identity of persons for whom property is held in trust. This new provision will enable the chief bureau officer or an authorised officer of the Revenue Commissioners to apply to the High Court to establish the identity of trustees or persons for whom property is held in trust where there is an investigation into whether a person is in receipt of, or controls, or has benefited from, the proceeds of crime.

Part 4 comprises 4 sections which amend the Criminal Justice Act 1994. Section 19 amends the seizure and detention of cash provision contained in section 38 of Criminal Justice Act 1994. The new subsection (1) of section 38 gives the Garda and officers of Customs and Excise a power of search where there are reasonable grounds to suspect that a person may be involved in importing or exporting an amount of cash not less than the prescribed amount of €6,500 and which either directly or indirectly represents the proceeds of crime or is intended for use in connection with criminal conduct.

The new subsection 1(A) broadens the power of seizure in section 38 of such cash to officers of the Revenue Commissioners instead of officers of Customs and Excise, as at present, and allows for seizure of cash which is suspected directly or indirectly to represent proceeds of any criminal conduct, and not just drug trafficking, as at present. In addition, the amended seizure power will now apply to cash anywhere in the State and not just to money "being imported into or exported from the State." A new subsection (3A) inserted after subsection (3) of section 38 of the 1994 Act provides that where an application under section 39 of the 1994 Act has been made to the Circuit Court for forfeiture, then the provisions of section 38(3) relating to a three month time limit shall not apply.

Its effect is to avoid the need for returning to the District Court every three months to renew a seizure order under section 38 in a situation where the Circuit Court has taken seisin of proceedings to deal with an application for forfeiture of cash seized under section 39. In other words, the cash can be retained without the need for orders to be made in the District Court at three monthly intervals pending a final determination of the application for forfeiture in the Circuit Court.

Section 20 amends the provision contained in section 39 of the Criminal Justice Act 1994 relating to forfeiture of seized cash and is a consequential amendment to take account of the fact that section 38 has been amended to refer to cash which is suspected directly or indirectly to represent proceeds of any criminal conduct, and not, as previously, just drug trafficking.

Section 21 amends section 43 of the Criminal Justice Act 1994 by providing for new definitions of "cash", "criminal conduct" and "proceeds of crime". The new definition of "cash" widens the existing definition by including notes and coins in any currency, postal orders, cheques, bank drafts, bearer bonds and bearer shares. The definition of "criminal conduct" is the same as that proposed for the Proceeds of Crime Act 1996, while the inclusion of the "proceeds of crime" definition ensures compatibility with the definition in the Proceeds of Crime Act 1996.

Part 5 comprises just one section — section 22 — which inserts new sections 2A, 2B and 2C into the Prevention of Corruption (Amendment) Act 2001. The new section 2A provides for seizure of a gift or consideration which is suspected to be a gift or consideration within the meaning of section 1 of that Act. It is modelled on section 38 of the Criminal Justice Act 1994 and will mean that a suspected bribe, as an instrumentality of crime, will be automatically capable of seizure. The new section 2B provides for forfeiture by the court of the gift or consideration which has been seized and detained under the previous provision. The provision is modelled on the forfeiture of cash provision in section 39 of the Criminal Justice Act 1994. The court may make an order, regardless of whether proceedings have been brought against a person for an offence with which the gift or consideration is connected, and the standard of proof for proceedings for forfeiture is that applicable to civil proceedings.

The new section 2C applies the provisions of section 40 regarding appeal, section 41 on interest, section 42 on procedure and section 45 on disposal, which change the seizure and forfeiture provisions of cash contained in Part VI of the Criminal Justice Act 1994 to the new seizure and forfeiture provisions in these amendments.

There are two possible additional proposals for inclusion in this Bill on which work has been continuing. An outline was given by the Minister for Justice, Equality and Law Reform on Committee Stage in the Dáil of a possible provision for an in personam action which would constitute a statutory tort of unjust enrichment. Its purpose would be to deal with the situation where someone, by means of some corrupt act, is able to benefit from the enhancement of value of property legally acquired, arising from the corrupt act. The example was given of a person who bribes a council official to allow him or her to build 60 rather than 50 houses on an estate. The mechanism that is being considered would provide for a procedure to go after the additional profit generated by the bribe.

As outlined on Report Stage in the Dáil, a draft head of such a provision has been drawn up. It is currently being scrutinised by senior counsel from both a constitutional and technical point of view and those views are expected shortly by the Attorney General. Senators will appreciate that any such provision must be able to stand up to the most rigorous scrutiny. Subject to the advice of the Attorney General, it is intended to move an appropriate amendment on Committee Stage in this House.

The other provision being considered for possible inclusion as an amendment on Committee Stage in this House relates to hearsay evidence following the decision of the Supreme Court in the Hunt case, CAB v. Hunt, 28 February 2003, 173 and 174 / 01. In that case, the court took the view that the reference at the end of section 8(5) of the Criminal Assets Bureau Act 1996 to information, documents and other material obtained by CAB officers under the subsection being admissible in subsequent proceedings, did not bypass the rules of evidence but merely allowed such documents to be admitted in accordance with the usual rules of proof, notwithstanding their origin. The Criminal Assets Bureau has expressed concerns about the added administrative burden in providing large volumes of administrative records arising from that decision and a possible amendment is therefore being examined. If feasible, the intention would be for this to be done by way of an amendment to the Criminal Assets Bureau Act 1996, so that any proposal would be restricted to proceeds of crime cases under the remit of the Criminal Assets Bureau.

This Bill is very complex and technical, but will considerably bolster the powers of the Criminal Assets Bureau in its continuing battle to go after the proceeds of all types of crime, including white collar crime and corruption. It also makes some important changes to the Criminal Justice Act 1994 and the Prevention of Corruption (Amendment) Act 2001 which will be of great benefit to the Garda Síochána and customs officials in pursuing all those who seek to profit from all crime.

I would like to record my appreciation of all those who have been involved in the drafting — the detail, application and otherwise — of this particular Bill. The officials of the Department of Justice, Equality and Law Reform have been very determined to assist in addressing the issue before us, namely, the proceeds of crime and corruption. I commend the Bill to the House.

Mr. Cummins

I welcome the Minister of State to the House. My party is fully supportive of the main thrust of this Bill. Whether that means increasing the powers of CAB, gardaí or customs officers, we are fully supportive of such measures. However, we believe that the proceeds of crime, especially drug trafficking, should be ploughed back into the communities that have been ravaged and destroyed by these criminals. The Bill before us has been lying around for four or five years. While I recognise that it fell with the last Dáil, it was put back on the Dáil Order Paper in July 2002 and it is only coming before this House now. At that time, some consideration was given to setting up a second corruption assets bureau along the lines of the present CAB, but it was not considered necessary. It was felt that the existing activities of the CAB in the fight against corruption could be best bolstered by the inclusion of additional amendments in this Bill.

The Bill is complicated and technical, clearing up some of the definitions and making new provisions which will bring it in line with the Proceeds of Crime Act 1996, the Prevention of Corruption Act 2001, the Criminal Assets Bureau Act 1996 and the Criminal Justice Act 1994. Whatever is required in legislation to ensure that the proceeds of crime support areas afflicted by its effects should be expedited. The Government will have my party's support in that regard. As a result of the tardiness of the Government in proceeding with the legislation, my colleague in the other House, Deputy O'Dowd, was forced to introduce a Bill of his own last year. True to form, the Government voted that down. Deputy O'Dowd's thinking was that the funds seized should be ring-fenced and used for a specific purpose. In that context, the funds could have an influence in education and in discouraging the use of drugs. This should be the intent of this Bill and the Minister for Finance must be amenable to such a suggestion. The creation of another slush fund for electoral purposes is not envisaged in these circumstances. We need strong assurances from the Minister that this will not be the case and that the communities most in need will benefit as a result of these funds. These are the people who have been hit by crime and they should benefit out of the resources seized from criminals.

I listened with interest recently to the Minister for Justice, Equality and Law Reform, when he spoke of deplorable gang warfare in west Dublin. He stated that resources for the gardaí were not an issue yet community leaders decried the scarcity of community gardaí in Blanchardstown and other areas of Dublin. The problems in these areas must be tackled by an interagency approach, including social services, the gardaí and sporting and youth organisations working together and rebuilding communities. The vast majority of residents in estates in Ireland are good law-abiding citizens, who want to live in peace and harmony with their friends and neighbours. They are terrified by anti-social behaviour perpetrated by thugs, vandals and dangerous criminals. No law-abiding citizen should be afraid to live in his or her own house or estate in this country, yet this is the case. From what I can glean from the Estimates, the Minister must be expecting to get his hands on quite a large slice of funds seized by the Criminal Assets Bureau to honour some of the promises made. He continues to make promises on a recurring basis in press statements. The public wants action rather than fine words. The Minister talks a good show and I support him in many of his pronouncements which would be strong on law and order. However, people's patience is wearing thin at the moment because of the inaction in so many areas.

We must get to the root of the problem. The ring-fencing of the funds from the proceeds of crime could go some way in addressing the problems of the areas in question. Section 4 of the 1996 Act provides that the proceeds of the assets cannot be distributed until seven years have passed, but surely a period of three or four years would make more sense. The Minister of State said that the consent disposal order will deal with the problem, which I welcome. The Criminal Assets Bureau, which was established by the rainbow Government, has been one of the most important weapons in combating criminals who felt they were untouchable. The bureau has had great success in retrieving and selling assets. The seven-year period I have mentioned is too long, however, and I am glad it has been dealt with.

The victims of crime should be to the front of our minds at all times. They should be supported from the funds seized from criminals because they have suffered at the hands of such people. A far greater emphasis should be placed on the plight of victims. In that context, it is difficult not to think of the case of an elderly gentleman in County Donegal, which was reported in a newspaper today. When one sees the state he was left in after he was beaten up, one questions the development of our society.

It is clear that the Bill's technical aspects are necessary to protect and increase the powers of the Criminal Assets Bureau and all other State agencies. Fine Gael supports the Bill's technical elements, although it may propose some amendments on Committee Stage. It awaits with interest the Government amendments which were mentioned by the Minister of State, particularly those relating to the additional profit that people may have gained from the sale of sites and other matters referred to by the Minister of State, such as business with planning officers.

I assure the Minister of State that my party will support the Government in expediting this Bill, which is necessary. I am sorry that the Bill was not brought before the Seanad sooner, although I realise that certain problems arose in the intervening period. We support the general thrust of the Bill.

Mr. Kett

I welcome the Minister of State to the House. He is a former colleague of mine from our days on Dublin City Council. It is good to have him here. I am grateful for the opportunity to say a few words on this amending legislation. As the Minister of State said, the Proceeds of Crime (Amendment) Bill 1999 was introduced to amend aspects of the Proceeds of Crime Act 1996. It will ensure that the 1996 Act can fight effectively, as it was intended, against criminals who are trying to retain assets they have obtained as a result of unlawful activity or illegal operations. I understand that certain aspects of the original Act, such as the question of who is responsible for the assets of criminals following a court order to seize them, are open to interpretation.

The Bill should be welcomed by the Garda and others who work in this area because it will give them a major tool to use when tackling the nasty characters they encounter. Such workers will no longer be powerless when they try to challenge individuals whose lifestyles are far beyond what they can afford from legitimate means. Not only does the Bill provide that such criminals will be punished financially, but it also increases confidence in the system among the Garda and the public. It reassures the people that ill-gotten gains accumulated by criminals will eventually find their way back to the Exchequer. Criminals engage in their murky business so they can gain the trappings of wealth and enjoy the lifestyles they desire. Now that the CAB has proven itself, they are starting to wonder whether they can retain what they have gained illegally. That is an indication that we are starting to win the battle against them.

An examination of the Criminal Assets Bureau's record — the number of interim orders and interlocutory orders in respect of property, the number of demands for the payment of tax and the interest on such payments — demonstrates that it has enjoyed considerable success in dealing with people suspected of being involved in criminal activity. The bureau is highly respected nationally and internationally. In 2003, it obtained interim orders worth over €3 million and interlocutory orders worth almost €900,000. It demanded tax and interest of over €7 million and collected approximately €10 million in that year. It collected social welfare savings of €110 million and recoveries of almost €200,000 in 2003. Such figures comprise a tremendous record for a given year.

In the period between its statutory inception in October 1996 and the end of December 2003, the bureau obtained interim restraint orders to the value of approximately €51 million and final restraint orders worth approximately €22 million. It demanded taxes and interest of over €76 million in that period, of which €56 million was collected. There were social welfare payments of €1.5 million and recoveries of almost €500,000 between October 1996 and December 2003. Since its inception the bureau has achieved tremendous feats overall and in individual years.

Many of the moneys about which we are talking have been seized from drug barons. The drugs problem no longer pertains to Dublin and the other cities only — it has long since found its way to various towns and villages. The national drugs strategy was established to tackle the drugs issue in the most comprehensive way that has been done in the history of the State. It assigned clear responsibilities and set targets for the various Departments and agencies involved. The drugs task forces, which were established in the areas most affected, help communities, agencies and all those involved to work together in a developed way to tackle the issues which exist in each area. The task forces have been particularly effective in places where drug taking was endemic. Having served on Dublin City Council and worked in the north inner city for almost 18 years, I saw at first hand the devastating effects of drug taking on local areas.

We have made good progress in providing treatment to those who depend on drugs. The Eastern Regional Health Authority, which has expanded its services, has been involved in a significant degree of activity. The Minister of State, Deputy Callely, who was chairman of the authority when it was known as the Eastern Health Board, has first-hand experience of the efforts which were made at that time. There has been a major expansion of the methadone treatment programme, from 1,400 participants in 1995 to almost 7,000 now. The number of treatment locations has increased dramatically, despite a great deal of opposition from communities which did not want such centres to be based in their localities. The authority could be faulted for the manner in which it pursued the matter in certain instances. It tended to go to places to develop centres before leaking details of developments to the public. One can imagine the opposition to such centres that resulted from the secretive way in which they were developed. I experienced such problems at first hand. The authority has succeeded in establishing a significant number of centres, which are doing terrific work.

Prevention was one of the four pillars of the drugs strategy. While it is important to treat those in communities which have suffered from the scourge of drug taking, we should provide sufficient resources to those working in the area of prevention. The only way to prevent someone from developing a drug habit is to cut the supply. Gardaí and customs officers are to be congratulated on the significant seizures they have made in recent years. The amount seized is evidence in itself of the fact that we are still a major target for criminal gangs as a country to which they want to ship drugs. I have no doubt that, as gardaí and customs officers close down routes, the criminals will find other ones by which to ply their trade.

The Garda Síochána has seen success, seizing approximately €20 million in drugs in 2000, €45 million in 2001, €49 million in 2002 and €100 million in 2003. That is a very significant advance. I have no doubt that those who trade in drugs look at those figures and see they really have a fight on their hands. That fight will step up a notch because of legislation such as this. The Garda National Bureau of Fraud Investigation received over 4,000 reports of suspicious transactions to the value of €271 million in 2002, and over 4,000 reports to the value of €450 million in 2003. Those are examples of the bureau's success rate.

Organised crime is a relatively new phenomenon in this country, having its origins in the drug trade of the early 1980s. The Government's response has been hard-hitting, something demonstrated by the legislation passed by this House. In recent years, the Criminal Justice (Illicit Traffic by Sea) Act 2003, which is designed to tackle the movement of drugs across our waters, has become law. It is quite difficult to stop it, since we have a coastline of over 3,000 km. With the best will in the world, that is a difficult coastline to protect. There is no doubt that one cannot do it 100%.

It is therefore paramount that we continue to nurture good relations with our neighbours in the European Union. The drugs obviously emanate from outside our waters. If we enjoy good relations and neighbourliness with other countries and develop relationships, that too will help. For that reason, the Criminal Justice (Joint Investigation Teams) Act 2004 was most welcome. The Act allows teams to be set up for a specific purpose and period of time to carry out criminal investigations with cross-border dimensions. That will be a very effective Act into the future.

I have heard my colleague opposite encourage the Minister to ring-fence confiscated moneys. The notion has a certain amount of credit, but I also see the other side of the argument. The money coming in is not recurrent, and one never knows from one year to the next exactly what one will have in the coffers. If one is planning a system in a community where one might establish a structure, it is difficult to do so without knowing one will have the money to do so the following year. Judging by the success rate of the Criminal Assets Bureau and the National Bureau of Fraud Investigation, there is no doubt funds are available, but initially one will certainly have that problem. Perhaps once-off money might be used as a capital allocation to put a structure in place in a community that might need repair or demolition and replacement. A voluntary effort might go into running it. That is not the most desirable scenario. The Minister for Finance, Deputy Cowen, has a problem with the idea, but I understand the commendable thinking behind it. Perhaps we should examine a way of putting something into specific areas subjected to the scourge of drugs. I wish the Minister of State, Deputy Callely, well in steering the Bill through the House.

Ms Tuffy

I welcome the legislation which is designed to improve the 1996 Act. Provisions are being clarified in this legislation following feedback from the Criminal Assets Bureau, for example, on the operation of the original Act. Last night on the Internet I looked at transcripts of Report Stage in the Dáil on 13 October. I could not access the debate in the Select Committee on Justice, Equality, Defence and Women's Rights during which amendments were tabled. However, I noticed that on both Stages the issue arose of how much money has accrued to the Exchequer.

At the time I understood that the Minister was saying essentially that, although so many millions had been frozen, only €1 million had accrued to the Exchequer. Perhaps the Minister of State, Deputy Callely, might update us on that figure. I understand that the new provision in this Bill allowing for a consent disposal order is intended to benefit both parties, but it would also help accrue money to the Exchequer more quickly. Perhaps the Minister of State might clarify how the Department hopes that will operate. Does it expect more moneys to accrue in the near future or will it take a long time?

Regarding the issue raised by Senator Kett about the ring-fencing of moneys obtained under the legislation, I know that the Labour Party had a Report Stage amendment in the Dáil along the lines mentioned, namely, that money realised on disposal orders under the principal Act, as amended by this legislation, should be used for community development purposes in disadvantaged areas. In this House and previously in the Dáil, the Minister of State, Deputy Brian Lenihan, said there were problems with that from the point of view of the Minister for Finance, Deputy Cowen. I wonder how the Minister for Justice, Equality and Law Reform, Deputy McDowell, feels about it. It is obviously a good idea and we have ring-fenced moneys in other legislation.

It would be very positive for traduced and disadvantaged areas and, in general, since all areas are disadvantaged to different degrees. For example, areas not traditionally thought of as disadvantaged are also experiencing issues related to crime and producing criminals. We must examine how we can put money into communities to help those detrimentally affected by crime and prevent crime in future. I feel strongly that money should be put into education. In my constituency there are many such projects. One area that has been neglected by the Government is primary schools in disadvantaged areas. Four schools in the RAPID area of my constituency have been crying out for money for such things as repairs without getting what they have sought over the past few years. It is all very well putting money into homework clubs and the like, but most important of all is that we properly fund our basic education system in primary and secondary schools.

I do not know if the Minister of State, Deputy Callely, is aware of it, but in my constituency there is a project called the Carline Centre of Learning. It concentrates on people outside the mainstream education system who could become subject to criminal influence and get involved in that but for the type of work carried out by the centre. The project was originally set up by a local nun and her order. The original idea was that people who might get involved in joyriding were trained in mechanics. The centre also teaches English, mathematics, catering, child care and so on. Those involved have contacted local public representatives. While they receive funding from different Departments, they are never sure exactly what it will be or whether they will have the necessary funds from one year to the next. The Government needs to provide guaranteed annual funding for such initiatives so that these groups can plan their work in advance and carry it out without fear of having to cut back on training. At one stage, they were examining cutbacks in woodwork, mechanics and so on, which they had commenced.

The legislation is welcome but, as Senator Ross pointed out recently, while the legislation provides for the imposition of fines on financial institutions where they carry out unlawful acts, such fines are only a drop in the ocean to them and it is worth their while to carry out these acts and then pay the fines. How is the legislation impacting on crime rates? Are criminals paying fines under these provisions but not curtailing their illegal activities? Are they leaving their lives of crime behind when they are caught?

Dr. Mansergh

I welcome the Minister of State to the House and I also welcome the Bill. It has been delayed for five years because of legal challenges but this is an opportunity to close loopholes and to provide the broadest practical definitions and flexibility of operation.

This is one of the most important and successful criminal law initiatives ever undertaken. The original legislation was introduced as a Private Members' Bill by the then Fianna Fáil spokesperson, the Minister for Arts, Sport and Tourism, Deputy O'Donoghue, and was subsequently adopted by the former Minister for Justice, Nora Owen. It was perhaps a turning point in the fight against crime. It took place against the background of the murder of Veronica Guerin, who was a friend and close colleague of mine, having worked for a few months on the fifth floor of Leinster House, and the scandalous situation that existed at the time whereby extremely wealthy drugs barons flaunted their wealth with apparent immunity. Nobody was able to obtain the necessary proof to connect them to the criminal acts that sustained their wealth. The Act enabled us to get to grips with the problem and it has been widely copied and admired elsewhere. I personally heard Prime Minister Blair express his admiration for the Act but, given that the legal and constitutional issues have been clarified, this legislation will enable its important work to be carried out more efficiently.

Given that a seven year freeze was provided under the Act, not much income has been transferred to the State, though the legislation provides for matters to be tied up by consent within the seven-year period and, therefore, more income may pass to the State. It is reasonable that dependants should be given enough to live on from the frozen assets. The Minister of State also suggested short-circuiting the rigmarole of going into the formalistic proof of the authenticity of documents when their authenticity is not seriously in question.

Senator Tuffy raised the issue of tying the proceeds of crime to community development. As my party's finance spokesperson, and given my understanding of the Department of Finance's thinking on the subject, there are good reasons for the Department's reluctance to tie incomes from various sources to particular purposes. However well the legislation works, the proceeds would be insufficient to fund community development. This must be funded from general taxation and, perhaps, the national lottery. I am not sure there is merit in the proposal. While a good case can always be made in a specific instance, if one multiplies that across different Bills, there could be a plethora of ties, which would make the administration of the public finances very difficult.

Mr. Cummins

How much is available currently?

An Cathaoirleach

Order, please. Senator Mansergh, without interruption.

Dr. Mansergh

However, I agree it is important to spend money on disadvantaged communities where the effects of drugs trafficking are often most visible. The Minister is contemplating an amendment, which will also deal with corruption and bring that under the ambit of the Criminal Assets Bureau. Like Sherlock Holmes's dog that did not bark in the night, it is striking that in the eight years the Act has been in operation and, despite it short-circuiting some ordinary legal safeguards, I am not aware of any scandal, alleged glaring injustice or any alleged abuse of human rights arising from its operation. That is a great tribute to the spirit in which it has been operated.

All legislation is only as good as the spirit in which it is implemented. All parties have had a part in this initiative and the legislation streamlines it, which is very much to be welcomed because this is one of the most successful and significant criminal law initiatives to have been undertaken in the State. It has enabled us to turn the tide.

Mr. Feighan

I welcome the Minister of State, Deputy Callely, to the House and wish him well with the Bill. The proceeds of crime legislation has been a major achievement. It was set up after the murder of journalist Veronica Guerin in 1996. That was a testing time for the State when criminal gangs felt they could run everything. Many of the gangs were involved in prostitution, drugs, armed robberies and the sale of guns. They felt immune from the law.

However, the horrific murder of Veronica Guerin, a journalist who espoused freedom of information but whose reports did not please the so-called godfathers, was a turning point in how we dealt with organised crime. Nowadays if we can convince a court that people are enjoying a lifestyle they could not have earned legally, a judge can order the confiscation and sale of their possessions. Too often people driving flash cars and wearing jewellery that was probably worth more than my car seemed to be immune from investigation. Thankfully, we now have legislation that has dealt with the issue.

Last year, Deputy O'Dowd published a Private Members' Bill to amend the Proceeds of Crime Act. The purpose of his Bill was to ensure that the sizeable funds seized by the CAB would be ring-fenced and used to rehabilitate drug users. There is merit in that because most of the assets seized by the CAB come from illegal gains from drugs. A United Kingdom report estimated that one kilogram of heroin distributed at street level generated 220 victims of burglary and £220,000 worth of property stolen by addicts to fuel their habits. We are not tackling the issue of drugs sufficiently. I agree with Deputy O'Dowd that the funds seized by the CAB should be ring-fenced to tackle the spiralling epidemic of drugs on our streets.

The issue of the horrific assaults that took place over the weekend was raised on the Order of Business today. One man was shot in his bed in what appears to be a gangland killing. One non-national was stabbed to death and another stabbed in Tallaght. An elderly gentleman was also hurt in Donegal. Are we sure that drugs were not involved in some manner in these crimes? Drugs are an ever increasing problem and it is for that reason I would like the proceeds of crime to be ring-fenced. Those funds would give the drugs task forces more bite and provide them with better resources. More gardaí could be involved in the drugs forces and the Garda could also be provided with extra resources to tackle increasing crime. The problem is in our major cities but it will escalate and permeate into every town, village and rural area if not tackled.

We have a raft of criminals who operate and run successful drugs operations in Amsterdam and Spain. They appear to be untouchable and I find this difficult to accept. We do not always believe the tabloids, but one must read them to see that these criminals are running their own show. Yesterday, the Taoiseach more or less said that the ill-gotten gains of this criminal underworld crime were perhaps being used to buy property in Spain. That is an unacceptable situation. I am pleased that many countries have followed our example in terms of enacting legislation to deal with the proceeds of crime. It has been successful in Northern Ireland in dealing with paramilitaries.

In the United Kingdom where the authorities did not regulate bureaux de change or money transmission agents they have good evidence that much money was laundered for criminals through these. Is that the case here or have we legislation to cover the transmission of funds by such agencies? While the banks are regulated, I would like my anxieties allayed with regard to the bureaux de change.

How much money is currently in the fund? The Garda cannot name the persons with whom the Criminal Assets Bureau has made settlements or provide information on the settlements. I understand there must be discretion and some secrecy on the issue. As public representatives our assets are in the public domain, yet if a question is asked in the Dáil on the issue of criminal assets it is considered inappropriate for the CAB to disclose the information sought. The overall sum of assets collected by the bureau from 1996 to 31 October amounts to €69,262,409. This is an amount I would like to see being spent in the right way.

I welcome any amendments that will make the Bill watertight and ensure we tackle the godfathers of crime. Campaigners for civil liberties have said its powers are dangerous and destroy the presumption of innocence. We have nothing to fear in that regard. For too long these crime lords have felt untouchable. We can have no untouchables in the State. The only force we should have is the Garda Síochána. The Bill's primary aim is to reduce crime and we will do this by working closely with our law enforcement partners. The assets accumulated through unlawful means must be removed. The CAB and this legislation target the godfathers who have gained money through drugs and illegal businesses.

I wish the Minister of State well with the legislation and hope the money seized will be ring-fenced to tackle drugs as the drugs task forces are not fully resourced. Anything that will help them to tackle the spiralling drug problem is welcome.

Mr. MacSharry

I welcome the Minister of State, Deputy Callely, to the House. I am pleased to have the opportunity to speak on this excellent Bill. I pay tribute to the Department of Justice, Equality and Law Reform officials for their efforts in streamlining the Bill and dealing with issues that were wide open to interpretation.

The Bill copper-fastens the true intentions of the principal Act and is to be welcomed in that context.

The Act originated when Deputy O'Donoghue initiated a Private Member's Bill in the other House, the Organised Crime (Restraint and Disposal of Illicit Assets) Bill. It is worth noting that Fianna Fáil's efforts in Government carried on from the example it showed during its time in Opposition. This was the single greatest legislative initiative shown by any Government in recent years. The European Union's multidisciplinary group on organised crime concluded that the Irish authorities had shown they were prepared to be innovative in their approach to national and international organised crime, especially in regard to the Criminal Assets Bureau. The Proceeds of Crime Bill falls into the same category.

We have witnessed great benefits from this innovation in recent years in terms of clamping down on organised crime and the godfathers who are causing such havoc throughout the country. However, our innovation has been matched by further innovation on the part of criminals as they seek to find new ways of beating the system, which they are doing most successfully.

We have heard a great deal of reference in the debate to organised crime, drugs and the larger issues of crime. However, we must also seek to use similar initiatives in tackling petty crime. Public order offences are a matter of significant importance, particularly those which occur late at night due to alcohol and drug abuse or other factors. Minors carry out many of these crimes and we must find innovative ways of dealing with this problem.

There is a great onus on parents to take responsibility for their children's actions. Senator Scanlon suggested one approach to the problem last year, namely, that children's allowance, in effect, would be performance related. This would mean that if a child was out of school or was carrying out public order offences the responsibility would fall back on the parents and children's allowance would only be paid to those who took responsibility for their children and ensured they were in the right place at the right time.

Drugs and other serious problems must be tackled but we also have a responsibility to try to prevent younger emerging criminals from going bad. Those who commit public order offences today may go on to commit more serious crimes down the line. We must face up to the matter and try to come up with innovative approaches. While curtailing children's allowance may appear radical we must explore every possible option.

The best way to invest the proceeds of crime taken by the Criminal Assets Bureau would be to put it all into preventative strategies. The sports capital programme would be one worthy beneficiary. It would also be useful to work with various youth and sporting organisations on a national basis on strategies to prevent young people from becoming involved in crime. The young criminals of today will become the serious hardened and organised criminals of the future.

This funding should be used in the manner I have outlined. The sports capital programme is one way but I am sure there are many ways in which we can use the money to benefit children and younger people and keep them on the straight and narrow. This would be much more beneficial to them in the long term and to the State.

The Bill is highly technical. I especially welcome section 5, an amendment of section 6 of the principal Act, which would allow a dependant of a criminal who may not be involved in any criminal activity to be entitled to reasonable and necessary living expenses. That is a positive development.

Another issue which was wide open to interpretation is that frozen assets, including cash, were in the notional possession of the garda who moved the order. I am pleased this matter has been ironed out and that the criminal will still be in possession of his or her assets but will not be in a position to use them.

I welcome the Bill, as others have done. I congratulate the officials who drew up this legislation which took some time for a wide variety of reasons and join with others in commending it to the House.

Minister of State at the Department of Transport (Mr. Callely)

I thank all the Senators who contributed to the debate on this important Bill and welcome the constructive tone of the debate. It is appropriate that Deputy O'Donoghue, who initiated the legislation in Private Members' time in 1996 was acknowledged, in addition to the then Minister for Justice, Equality and Law Reform, former Deputy Owen.

Some interesting comments have been made but I am not sure I will be able to respond to every issue. I am happy to speak further to any Senator who does not believe I have adequately answered his or her query.

A number of Senators, including Senators Cummins, Kett and Mansergh mentioned the delay in the Bill coming before the House. As I stated at the outset, this delay was outside the control of the Department and the Parliamentary Counsel because of other factors. While the delay is regrettable, it has allowed for a substantially more far-reaching Bill than the original. This will greatly enhance the role of the officials in the Criminal Assets Bureau, customs officials and the Garda Síochána in combating those who seek to profit from crime.

A number of Senators inquired about funding being ring-fenced. If this issue were teased out I am not sure if Members would be so sure this would be the best way to proceed. It is not quite as easy as saying that because there is a regular pot of money, one can identify schemes which can be ring-fenced and is guaranteed a flow of funding.

The issue of drug-related funds was referred to, in regard to which I am pleased to state that Ireland ranks very high in the EU chart on the amount of money the Government is spending on fighting the drug problem. It is spending just shy of €200 million per annum on prevention, treatment, supply reduction and education, all of which are areas in which we want to see money being invested. Senator Kett referred to the various programmes with which the health authorities have been involved over a prolonged period of time when there was no roll-in from CAB money. It should be noted that the proportion of drug-related funds of the total obtained by CAB is uncertain as CAB collects revenue from a number of sources.

Mr. Cummins

The point is that there should be additional money to the current spending.

Mr. Callely

There are other sources such as tax offences. We all subscribe to the need to continue to enhance the existing programmes. If there is more money in the central pot, I hope more money will go to the priority issues which we would all like to see being addressed. Senators also referred to the impact on criminality of the provisions of the CAB legislation. Senator Kett congratulated the Garda Síochána and customs officers who take significant risks in this area but are very determined and committed to their duties and are professional in doing so, with which I agree. I have great admiration and respect for Deputy Garda Commissioner Fachtna Murphy who established CAB when he was a superintendent or chief superintendent. He has done trojan and professional work with CAB, which has in turn done a great deal to address the impact on society of criminality. Senator Kett also referred to CAB's success in the context of its figures and its large impact on criminal proceeds.

My colleague, the Minister for Justice, Equality and Law Reform, Deputy McDowell, has set in motion a process to examine the issue of youth justice. We are at a preliminary stage in this regard but hope to have a report in mid-2005 on a cross-departmental basis. Garda resources are another important issue, in respect of which I am delighted to report to the House the additional Garda funding, announced by my ministerial colleague, Deputy McDowell, which is coming on stream.

Mr. Cummins

I am glad the Minister of State has announced this again because it has already been announced on numerous occasions.

An Cathaoirleach

Allow the Minister of State to proceed without interruption.

Mr. Callely

I am delighted to state that great progress has been made on Garda activity and the level of supports which are being put in place for the force. The Garda Commissioner is very happy with the progress made and the commitments he has received from the Government. On the other side of that coin is the issue of victims, which was also referred to. In that regard, a victims' charter has been published by the Department of Justice, Equality and Law Reform. The State supports the victim support organisations which are doing great work.

I was asked about the amounts of money involved in final disposal orders. As the Act came into effect in 1996, final disposal orders can only be made now because of the seven year time lapse. I understand that to date, two final disposal orders have been made — one for €102,000 and another for €169,000. These should go to the Department of Finance in early December, although it is dependent on whether the respondents go to court in the meantime. As seven years have elapsed since the commencement of the Act, increasing numbers of orders will be made in the coming months on a continuing basis.

The overall sum for tax collected by the Criminal Assets Bureau between 1996 and October 2004 is €69.26 million. In the period since its inception up to 31 October 2003, the bureau has obtained interim and final restraint orders to the value of more than €51 million and €22 million, respectively. Senators will find further details of the activities of the CAB since its establishment in 1996 in its annual reports, which are available in the Oireachtas Library.

This is a complex and technical Bill which will considerably bolster the powers of the Criminal Assets Bureau in the continuing battle to go after the proceeds of all types of crime, including white collar crime and corruption. The amendments to the Criminal Justice Act 1994 and the Prevention of Corruption (Amendment) Act 2001 will be of great benefit to the Garda Síochána and customs officials in pursuing those who seek to profit from crime.

The clear, sober and stark message from the Government is that it is tough on crime and is intent on continuing to win every battle against criminals on behalf of law abiding citizens and the judicial and legal system and we will win the war. For the State and its citizens, it will be a win, win, win situation.

I thank Senators for their contributions to this debate and their co-operation. I commend the Bill to the House.

Question put and agreed to.

An Cathaoirleach

When is it proposed to take Committee Stage?

Mr. Kett

Next Tuesday, 30 November.

Committee Stage ordered for Tuesday, 30 November 2004.

Sitting suspended at 1.10 p.m. and resumed at 2.30 p.m.