Mr. Declan Smyth:

To begin with, when the Department was examining Senator Black's Bill, the provisions relating to services would have created a criminal offence of supplying a service within a settlement, where the service is supplied by an illegal settler. This created certain legal problems, which we explained at the time. The exercise of the State's criminal jurisdiction extraterritorially is generally very limited. It is limited to Irish nationals committing serious offences abroad or where there is a requirement under an international agreement that we extend our criminal jurisdiction to acts committed by non-Irish citizens in a place outside Ireland. The offence that would have been created by that Bill was legally problematic, not for reasons relating to the European Union but from an international law perspective.

We have looked at the question of services now as more a question of trade in services, much as we have looked in the general scheme at goods as a question of a trade in goods. The legal difficulties that we identified with Senator Black's Bill in relation to the prohibition of services are different from those that exist in relation to cross-border trade in services between an EU member state and a third country or territory outside the EU. That is a question of the exclusive competence of the European Union, and what would be necessary for a member state to legislate in that field is to find an empowerment in Union law entitling it to do so.

It might be useful to mention that services, of course, are quite different from goods. All goods entering a territory have to pass through customs in some way, so they can be easily identified. Services, by contrast, are very diverse in nature. The WTO, for example, divides services into 12 separate sectors and 150 subsectors. Within the European Union, all those sectors will be regulated to different extents and be the subject of different bodies of law. There is, then, quite an extensive review exercise required into establishing precisely how they are regulated within European Union law and the extent to which, if at all, there is a public policy exception that would allow a member state to regulate external trade in services between that member state and a third country.