Brendan Howlin (Wexford, Labour) | Oireachtas source

I too congratulate the new Minister of State at the Department of Justice and Equality, my constituency colleague, Deputy Browne, and I wish him every success in his appointment. It is a demanding role and a demanding Department. I was spokesman in the area in the past and one spends a lot of time in this Chamber because half of the legislation that comes though these Houses comes from the Department of Justice and Equality.

We should look at that situation, because it is not possible to give priority to all the areas under the remit of the Department. Previously, we set up a Department of Equality and Law Reform. Perhaps that is what is intended by offloading some of the work of the Department to the new Minister with responsibility for integration. I cannot use the opportunity, as Deputy Daly did, to lobby for a new courthouse for Wexford, because that has, thankfully, been provided. I wish him well in his endeavours and Tralee would be an ideal location.

I welcome this Bill. It is an extraordinarily important area of focus and a very complex one. Many people do not know the minutiae of world finance or how capital and money flow seamlessly across the globe. Humanity, as a body, needs to have control of that flow and to understand what is going on. We can only act internationally on these types of issues. There is no point having domestic law that does not have a wide scope, and that is why it is important that we use the institutions of the European Union to act in concert with the other member states so we can control this menacing area.

In his contribution, the Minister of State spoke about the process of continually updating. That is very important, because money laundering is a worldwide crime that is evolving all the time, with new mechanisms being devised because the profits are so enormous. Bluntly, the mechanisms we use to counteract it are not up to the mark and have not been to date. Across the globe we see kleptocracies, where regimes rob the raw resources of their own people. In the immediate aftermath of the collapse of the Soviet Union, we saw how individual citizens became multimillionaires at a time many people were impoverished. Much of that money was anchored offshore. It travelled all over the world and was put into various mechanisms and financial vehicles. It continues now from a variety of international sources, from criminal sources in the drugs trade and terrorist sources. We must apply ourselves to ensuring that we are as agile as legislators and law enforcers as is the criminal community.

I welcome this Bill. It is technical, and one of these Bills where it is necessary to read the anchoring legislation to cross reference the amendments and changes being made. I add my voice, however, to the words of criticism of the Bill. It is unfortunate that we are in breach of the timeline set out in an EU directive and have been fined €2 million. We could do with spending that €2 million in many better ways than being fined for our own tardiness in a matter such as this. That is particularly the case when it is absolutely in the interests of Ireland that this legislation be enacted, and no Administration that we have had would not have been highly supportive of the provisions of this legislation.

The EU regulations are designed to introduce transparency, as the Minister of State has set out, on the ownership of companies. This is one of the areas we must delve into deeply to find out who are the beneficial owners, because it is possible to have offshoot companies anchored in offshore companies that are anchored in holding companies, which are designed to make the real beneficial owners as opaque as possible. The regulations also reinforce surveillance requirements, and that is important. We know from our economic collapse that the institutions we trusted to have oversight of the banking system here were not up to the mark. Considering how important financial services are to Ireland, we must ask whether the resources now being deployed and the oversight bodies that exist are up to the role that Ireland wants to play as a major international hub for financial services.

Firms located in Ireland provide financial services to every major economy. We are a small island and we have a small cohort of people involved in oversight of financial services, but the financial services we provide on this island are of an enormous scale, one we would not have envisaged a few decades ago. According to Industrial Development Authority Ireland, IDA, financial services employ 42,000 people in Ireland. The sector contributes €2.3 billion in taxes annually to the State. It is not confined to Dublin, as the Minister of State will be aware. We have financial services companies in Wexford and they operate all the way up to Donegal, although the hub is obviously in Dublin.

Some 250 leading financial services firms operate out of Ireland and half of the world's top 50 banks have representation in, and transact business, in Ireland. The sums involved are staggering. More than €1.8 trillion in funds are administered from Ireland. Considering the capacity of Ireland and the throughput of the economy - and I know that gross domestic product, GDP, is now an abused term and it would even take several people to explain what modified gross national income, GNI*, is - these funds under administration are multiples of that figure.

According to Enterprise Ireland, the Irish Stock Exchange is the world leading listing venue for fund and structured debt products. We are not, therefore, small players in international financial services and we must have oversight mechanisms that protect our reputation. In the past, Ireland's reputation has been dented by measures such as the "double Irish" and particular mechanisms used to attract foreign direct investment, FDI. We must be crystal clear that we will provide an oversight mechanism equal to the capacity of these financial services to operate on our island into the future.

In that regard, I refer to the resources now available. Despite what I read in one recent tweet from Fine Gael, the former Deputy and Minister, Ruairí Quinn, set up the Criminal Assets Bureau, CAB, in 1996, after the shocking murders of Detective Garda Jerry McCabe and Veronica Guerin. Those murders shocked the nation to the core. The CAB has been a very successful mechanism. The old adage is that Al Capone was put away for tax evasion and not for all the murders and other awfulness in which he was involved. Taking away the assets of people who cannot prove that they acquired them properly has been an effective mechanism.

Turning to the operation of financial services, we now have the Garda National Economic Crime Bureau, GNECB, formerly the Garda Bureau for Fraud Investigation, GBFI. The GNECB is now the main entity overseeing the implications of this legislation, although the CAB and other agencies will also be involved. Is the GNECB adequately resourced for the task? I ask that question given the scale of the financial entities existing on this island.

The reply to the most recent parliamentary question I asked stated that the full complement of the GNECB is 72 gardaí, 19 civilian staff, plus three accountants. I thought it striking that three accountants are a part of the bureau, The complement of accountants has not been greatly enhanced since the GBFI operated in this space even though the throughput of cash and resources flowing through Ireland has increased immeasurably and, to put it bluntly, is likely to increase further with the advent of Brexit. The IDA and the Government are looking to have resources, including banks, insurance firms, reinsurance companies and so on, relocate to Ireland rather than to Luxembourg or Frankfurt if they are to leave London and need a European home. If we are going to be proactive in looking for that business, we need to be equally proactive in ensuring that the oversight is there to ensure that all that business is above suspicion, like Lot's wife, and is seen to be. It must be clear that we have a patent and clear capacity within our oversight bodies to ensure that is the case.

Other Deputies have talked about the move to cryptocurrencies. That is an area that is directly dealt with in the directive and lends itself particularly to the area of fraud. There can be incredible movement in the value of cryptocurrencies such as bitcoin over a short time. Others have touched on the impact of this on ordinary people in our society. The most recent example in the media has been the issue of money mules, where young people, often students, have been inveigled into allowing their bank accounts to be used to launder money, to be frank, and are given a token payment, a pittance, for that. We need to alert people to the consequences of doing that. Money laundering is a serious offence and carries a jail term of up to 14 years under legislation enacted by these Houses. It could also be ruinous for somebody's life. A conviction under legislation such as this would preclude people travelling to many countries. They need to be alerted to that.

We are moving fast towards a cashless society and the advent of Covid-19 has accelerated that in a clear way. Many people are not comfortable with that but people did not, and do not, want to handle cash at the moment so all of us are using our cards and an awful lot of people simply do not carry cash. I thought how fast we have already moved in that regard when I saw somebody begging on the street and taking cards. A cashless society will intensify the requirement for oversight because we will never see our money and, in the future, it will always be figures generated on our mobile phones. All of that will require us to be personally vigilant and to have assurances from State authorities that the failure of oversight that led to the economic collapse of 2009 and 2010 will not recur and impoverish people yet again.

There are a few references in the legislation that people who are relatively new to politics may find a little jarring. There is the concept of a politically exposed person, PEP. We are all PEPs and require particular monitoring and surveillance. This was recently brought to my attention by somebody who had been elected to the national executive of the Labour Party, and I am sure the same happens in every other party. That person was notified by their bank that they are a PEP. "What is a PEP and what does it mean for me?", they asked. I told them that it means that there is particular scrutiny on people who have political roles and authority. Some of the antics of the past have made that a necessary requirement. That can be seen to be absolutely true when one looks at obvious corruption around the world. While we can condemn corruption and decry kleptocracies that rob the resources of their own people, we in the West often provide the wherewithal for those same robbers to hide their money in our banking and financial systems. We must be clear about that, set our faces against that and expose that in a co-ordinated, international way.

This legislation is a significant step on a continuous road because we are never going to be done with this. Just as the clever brains of those who are involved in money laundering will develop new strategies, we must develop new laws to combat that.

I will conclude by talking about what money laundering and terrorist financing are. For money laundering to occur, the fraud involved must generate funds that are the proceeds of crime. Money laundering is the processing of the proceeds of crime. For terrorist financing to occur, the source of the funds is not relevant. Even if the sources of the funds are legitimate, it is a serious criminal event that needs to be addressed if they are obviously being used to fund terrorism.

I believe we can enact decent law, evolve and be relatively agile in our legislation but my overarching concern is that, as in many areas of public business, we construct elaborate legal frameworks without the wherewithal to ensure that they are properly, effectively and extensively resourced. I hope that the Minister of State will give us assurances that the Garda authorities, including the GNECB and CAB, as well as the Central Bank, are not only adequately resourced but will have additional resources to deal with what I believe will be an expansion of our financial services in this country.

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