Select Committee on Legislation and Security debate -
Tuesday, 18 Jan 1994

SECTION 2.

Mr. G. Mitchell

I move amendment No. 1:

In page 5, to delete all words from and including "on" in line 19 down to and including "Act" in line 23 and substitute "within 3 months of its passing into law".

This section reads:

This Act shall come into operation on such day or days as may be appointed by order or orders of the Minister, either generally or with reference to a particular purpose or provision, and different days may be so appointed for different purposes and different provisions of this Act.

This legislation is urgent and, having waited for it for some time, I am glad to see it before the committee. It is technical legislation. However, I would be concerned if implementation was delayed. Given that the Minister will have the power to implement different sections at different times, the delay could be protracted and beyond the control of the committee. The Minister will have unlimited powers as to the timing of the implementation of this legislation and that could take time. Not alone should this section apply from now, but I am anxious that it be applied retrospectively if at all possible. Let me tell the Minister and the committee what I have in mind.

I heard over Christmas that a certain person had been released and was living it up in a hotel. However, when I checked this story — I am sure the Minister did likewise — I found that the person concerned had not been released, that he was still in prison in Portlaoise and not living it up in a Dublin hotel, as stated in a particular press report in which the hotel the person stayed in and the night clubs he visited over Christmas were named. I regret that sort of inaccuracy appearing; nonetheless, there was some smoke, but from a different fire.

There are criminals in prison for drug related offences and other crimes who have stashed away substantial amounts of money for the day they will be released. There are good grounds for suspecting that some people have deliberately lived the lives they have lived in the knowledge that their assets will not be confiscated and that they will be able to use them when they come out of prison. In the past we heard stories about people who were living in or were the tenant purchasers of local authority houses but who owned fashionable houses elsewhere in the country and were living lives which a normal person would find it hard to live.

I am anxious that this section will apply without any delay, so that from this date onwards any person who commits a crime, which is drug-related in particular, will have their assets confiscated under this legislation. Implementation should not be delayed. I am also anxious that even at this stage persons who are in custody and who have large amounts of ill-gotten money particularly from drug-related crime, will have that money confiscated by the courts; in other words, that the legislation will apply retrospectively. I therefore suggest in my amendment that we delete the words in the section which give the Minister discretion and substitute "within 3 months of its passing into law." That would a reasonable timescale because it will be some weeks before this Bill passes into law. However, even at that I hope the legislation will have the effect of giving the courts the power as of now to deal with this problem. Will the Minister indicate what her understanding of the law is in regard to retrospective confiscation? People appear to enjoy a certain lifestyle — even those on temporary release can live it up, book a couple of suites in a hotel, spend lavishly and entertain all and sundry and yet show no source of means. I hope the Minister will accept this amendment.

Ms O'Donnell

Deputy Mitchell's amendment seeks to set a time limit before which the Act will come into force, but I favour the approach adopted by the Minister in this regard. This is a complicated Bill and there are many aspects to it, particularly in relation to money laundering.

For the first time legislation places huge responsibilities on our financial institutions and there will need to be a sufficient lead-in time for procedures to be put in place.

In introducing this legislation we have the advantage of the experience of the UK and other jurisdictions in Europe who have previously introduced the requisite legislation to deal with the seizure of the proceeds of crime and money laundering. As the Minister outlined, there is a need for flexibility on behalf of the authorities to allow the Act to come into operation in various parts and at various stages as appropriate. The Irish Bankers' Federation have been in touch with the Minister and members of the committee. For the first time they will be faced with onerous responsibilities in terms of reporting and disclosing information. This will be a big change in banking practice. A culture of secrecy and confidentiality has been established in banking practice. Now this Bill seeks to confront that culture of secrecy and provide procedures whereby, hopefully, a centralised reporting system will be established to evade financial institutions to disclose dubious accounts which they suspect are laundered through criminal activity. I favour the Minister having flexibility in this regard to consider the aspects of the legislation, including allowing courts to have a pre-trial restraint. The idea that a person's assets could be seized in a pre-trial situation without notice to the defendant is a major departure in our criminal law.

The legislature is introducing major, radical and draconian measures to counter racketeering and money laundering. A flexible lead-in time is necessary to enable Customs, the Revenue Commissioners, the financial institutions and all the bodies who will be charged with enforcing this legislation, to get their act together to put in place training procedures for their staff and to enable them become familiar with the new culture of disclosure as distinct from that of confidentiality which has been part and parcel of banking institutions. For that reason, I favour leaving the law as it stands and allowing flexibility for the Minister to introduce parts of the legislation as and when appropriate.

The success of this legislation will lie in its enforcement. Before it is enacted and becomes part of the law of the land, it must be considered and predicted that it will work and that there will not be litigation because the legislation was not in order or the banks were not prepared for it. We owe it to ourselves and the financial institutions involved to give a sufficient lead-in time. I do not wish to be contrary but, with regret, I oppose Deputy Mitchell's amendment.

Mr. Gilmore

To take up the last point, the banks and other financial institutions must by now be fairly familiar with legislation being passed by the Oireachtas with which they have to deal fairly promptly. The finance legislation, for example, which is passed annually has to be dealt with promptly. While I appreciate Deputy O'Donnell's point about the culture of confidentiality, secrecy and so on, that the financial institutions here have inherited, we should not allow that to be used to delay legislation and measures urgently needed to deal with a serious problem in our society. We know, and it has been reported by the Law Reform Commission, that the proceeds of crime are being efficiently laundered here. We also know that those who are engaged in drug dealing make substantial amounts of money from it and manage to launder it and represent themselves, in some cases, as respectable pillars of society.

We also know there is a danger of this country being used as a staging post in the international drugs trade and that has been referred to by the State Solicitor in Cork. The legislation we are now dealing with — and in fairness to the Minister she has introduced it quickly — was mentioned as far back as 1988, so it will not come as any great shock to the financial institutions that the Legislature at some stage would deal with money laundering and the confiscation of the proceeds of crime.

I am inclined to support Deputy Mitchell's view that this legislation should be enacted quickly. Will the Minister indicate the position regarding people who have already been convicted of various crimes, whether in relation to drugs or other crimes, where it is believed the proceeds of those crimes are stashed away? Will it be possible for this legislation to deal with the confiscation of the proceeds of crime in respect of criminals who have already been convicted? That is something that must be addressed.

Mr. Kemmy

I welcome the legislation. It is, perhaps, a measure of our innocence, or perhaps our refusal or inability to tackle the problem of laundering of drug-related money, that this legislation is only coming before us now, even though other countries throughout the world have tried to tackle this problem long ago. There is no need for undue delay in the implementation of this legislation. I take the point made by other speakers that it is important for the courts, the Garda, customs officials, our Navy personnel and the general public to become familiar with the changes and to give them a lead in time to prepare for the implementation of this legislation, but that should not take an unduly long period of time. The Irish Bankers' Federation has written to us about this matter and pointed out that it would need a little time to adjust procedures to the new legislation and has given the example, as Deputy O'Donnell said, of the British position on the matter. The British Legislature has given a lead-in time to become familiar with the legislation, so I would support a medium time. It should be given some time, but not delayed unduly. The Minister should ensure that the courts, Customs officials, the Gardaí and the general public are familiar with the changes being introduced today.

Mr. D. McDowell

I am sure all members would agree that this legislation should be put in place as soon as possible. It has become increasingly clear recently that this country is being used as a staging post or a laundering house for moneys earned from drug trafficking and the sooner we do something about that the better.

In regard to the amendment before us, without being too legalistic about it, I would be concerned about any legislation which in essence moves the goal posts in criminal matters after the event, or, to put it another way, that applies retrospectively. I have some doubts about whether that is constitutional. I would be opposed to any amendment that would have that effect. When will this legislation be put in place, because obviously we would all like that to happen as soon as possible?

Mr. Callely

I am delighted that we have this Bill before us, particularly as it provides for the recovery of proceeds from drug trafficking and other offences. In general this legislation is welcome.

In relation to Deputy Mitchell's amendment, we are all familiar with the passage of legislation through the Oireachtas. It may be introduced in the Dáil, sent to a select committee, referred back to the Dáil, sent to the Seanad and then to the President for signature. I have no doubt that this legislation will take its course and will be brought back before the Dáil. I am waiting to hear what the Minister has to say in that regard, but I have no doubt she is pursuing this legislation with vigour and will do everything in her power to accommodate its passage at the various stages and have it implemented as quickly as possible. I am not sure whether it is necessary to include the provision proposed in Deputy Mitchell's amendment.

Mr. Durkan

I see valid reason for the amendment put down by Deputy Mitchell. I am not saying that the original wording was in any way misleading or evasive. As Members of the Oireachtas we have all seen highly laudable legislation being introduced at a particular time, but because of a lack of ministerial order and so on in relation to certain aspects of it, considerable time passed before its enactment. The Minister will be glad to know that this also refers to other legislation - for example, the legislation in respect of child care.

There should be no delay in implementing the provisions of the legislation because it proposes to prevent people from making a livelihood from criminal activity. Obviously, there are two sides to that argument, but notwithstanding that, this country is fast becoming a pivotal area or a hub in respect of international trafficking in illegal substances. We have had great success in dealing with the problem but this legislation will be important in the continued fight against that problem. Any delay in its enactment will be more advantageous to the criminal than to the community at large.

Ms O'Donnell

Deputy Mitchell raised the question of the possible retrospective effect of this legislation. That brings me to a point I intended to raise later. In 1985 the Offences Against the State (Amendment) Act was rushed through the Oireachtas. That legislation was similar to what we are discussing today in that it dealt with what was allegedly Provisional IRA or terrorist money laundered through a bank in Navan. What happened to that £2 million? Will this legislation be able to winkle it out of its present status in that bank account, or is the matter in the hands of the courts? Why has it been languishing for so long? What are the Minister's plans under this legislation in relation to those funds?

Mr. L. Fitzgerald

Deputy O'Donnell raised some of the matters I intended to raise. We should exercise caution in relation to the time limit Deputy Mitchell wants put on the implementation of the provisions of the legislation because we are dealing here with people who could be described as mass murderers, and that term should be enshrined in the legislation. We should give the Minister as much flexibility as possible in respect of implementing the various provisions of the Bill. The issues here are far too serious to rush it.

Minister for Justice (Mrs. Geoghegan-Quinn)

Members of the Oireachtas and the Oireachtas in general find the type of open-ended commencement provision included in section 2 most unsatisfactory. At the same time, because of the complexity of this legislation, such an approach is justified on this occasion and I will explain why.

I appreciate the arguments in favour of Deputy Mitchell's amendment, but on the one hand it would prevent me from implementing some provisions of the Bill before three months have elapsed, even though it might be feasible to do so, and on the other, it could impose an unrealistically short timescale in relation to other measures. For example, I do not believe we need a lapse of three months before bringing into effect the confiscation provisions of the Bill. As soon as the President has signed the legislation it would be my intention to make an order the following day specifying when the provisions would come into effect. This amendment would prevent me from doing that.

In regard to Deputy O'Donnell's point in relation to the money laundering provisions, given the nature of the new identification system and other procedures and requirements now being imposed on financial institutions, they will have to train their staffs on various procedures to combat money laundering and so on. Lest anybody might think I hold a banner for financial institutions, like most politicians I have no great love for them. Nevertheless a period of three months might not be sufficient for them to carry out such training.

Like Deputy Kemmy, I too would like to acknowledge receipt of representations and suggested amendments that the Irish Bankers Federation sent to all the members of the Committee and possibly all Members of the Oireachtas. I have arranged for officials in my Department to meet them to discuss their proposals, some which may be included in the legislation. Under this legislation financial institutions will be obliged to report dubious money transactions and if they fail to do so it is a crime. They will have to be very careful about the type of training they give their staff. The period suggested in the amendment may not be sufficient in relation to international cooperation where various arrangements have to be made, including ratification of relevant conventions. Indeed, fairly complex regulations will have to be made. In relation to section 34 which deals with external confisciation orders.

A number of people raised the question of restrospection. I would like to deal with the question which Deputy O'Donnell raised in relation to Navan and the £2 million. I am not sure what the final outcome was but my understanding and that of my officials is that the State still have the money. There was an appeal to the High Court and before tomorrow evening I will be able to clarify the situation.

In relation to retrospection, section 5 (4) (a) (ii) provides that if the courts convict someone under the drug trafficking aspects of this Bill, following its enactment, and the offences took place before the passage of the Bill they will be included. The court will assume that any gains of assets the person has in the period of six years prior to the conviction, until it is proved to the contrary, came about as a result of drug trafficking.

I agree with Deputy McDowell that to go further in relation to retrospection would be questionable under the Constitution and certainly my advice has been that we could not go any further than that. Offences committed before the Bill comes into force, but for which convictions are only secured after the Act comes into force, are included as well as the six years prior to the convictions.

In all the circumstances I am not prepared to accept Deputy Mitchell's amendment. I am an impatient person by nature so I would not hold up the passage into law of any of the sections of the Bill. In relation to the confiscation provisions, the order could be made by me on the day immediately after the President signs the Bill.

Mr. G. Mitchell

That shows that the Minister and I are compatible since we are both impatient. It is extraordinary to hear what I did not say quoted back to me. My amendment does not refer to this Act passing into law in three months' time but rather that the order should be made "within three months of its passing into law". Within three months of its passing into law may include the day after if the Minister so wishes. I do not know how that could in any way hamper the Minister from making an order the day after and I would not want that inaccuracy to remain on the record.

Second, no matter who is in Government, Government Departments are notorious for not implementing laws often because of cost or staffing implications, etc. In effect, in passing this section unamended we are suspending this legislation until such time as the Minister on a day or days brings that legislation into effect. I can understand the Minister putting a case because her Department may have many other priorities that she should be looking at. I can guarantee Deputy O'Donnell that within six months we will hear the Progressive Democrats on "Morning Ireland" asking why the Minister has not implemented the section in its entirety. My amendment proposes that the Act should come into operation within three months of the passing into law of this Bill. Deputy Callelly is right in saying it will take some time before it passes this Committee because it is a highly technical Bill. Following its passing by the Dáil the Bill will be sent to the Seanad and finally for signature by the President. In fact, this Bill may not come into operation for about six months following its enactment.

Financial institutions have a lot of resources available to them which we as legislators do not have. If they cannot buy in the expertise to advise them the rest of us are lost. I have little sympathy for financial institutions not being able to get their act together and in all the circumstances I feel the amendment is reasonable. Any delay in implementing the law is regrettable because it is clear that there are people who have accumulated large amounts of money and assets, some of them are in prison and some will eventually come out to regain those assets. I not only want to go after those who are covered by the current law but I would like to find some way by which the State could claim that money. There was some truth in the report which stated that many people on release with their criminal colleagues were living it up in hotel suites at Christmas time but I am certain that the person mentioned was not involved. If that is happening we should not delay. If that money is in the bank, the State should confiscate it.

There are many amendments to this Bill but I do not wish to delay the Bill by pressing amendments which will not be carried. I hope the Minister will take into account the arguments I have made and implement this legislation in full, within three months of the passing of this Act, as suggested in my amendment. In the circumstances I will not press the amendment.

Mr. Kemmy

During the recent debate on the tax amnesty a number of Deputies said there were 15 million bank accounts in Ireland for a population of 3.5 million. That implies that some people have more than one account. I understand that some young people have five or six accounts but have no money in any of them. It can be deduced from that that some people are using false names to open accounts and are not involved in drug trafficking. Will the provisions in legislation have a bearing on people who have opened accounts under different names and will this be forbidden in future even if they are not involved in drug trafficking or drugs?

Mrs. Geoghegan-Quinn

The answer to the final part of Deputy Kemmy's question is "Yes". In regard to existing accounts we are once again into the area of retrospection. If a conviction, which relates to any bank account or any asset that that individual has acquired in the six years leading up to the conviction being secured, takes place after the enactment of this Bill, then it is covered. Any conviction prior to that would be dubious in the same way as it would be under the law.

Mr. D. McDowell

Will it be necessary to provide additional resources for the Garda or the DPP's office, or whatever, to assess gains which people have made from racketeering? If the Minister envisages that such resources are necessary that would be another reason for a short delay. Will the Minister give the committee an assurance that there are sufficient resources within the Garda and the DPP's office to do this work?

Mrs. Geoghegan-Quinn

We believe there are sufficient resources within the DPP's Office and the Garda as a result of the 1994 Estimates and that there is no necessity for further resources. However, if during the course of the implementation of the legislation we find that further resources are necessary they will be made available.

Amendment by leave, withdrawn.

Section 2 agreed to.