Brendan Howlin (Wexford, Labour) | Oireachtas source

I welcome the arrival of the Bill 2020 into the Dáil. The Minister of State said in his opening statement that it is not a complicated nor a particularly lengthy Bill. One wonders why it has taken so long to arrive before us. We seem to be always at the end of the timelines for the transposition of EU directives. Again and again, that seems to be the situation and we are presented with timelines in which we must get the legislation done or face financial sanction in the European court. That should not be the way we operate. Directives take a long time to go through the European system. They are well-signalled within Departments but it seems the Departments sit on them until such time as they must have them enacted or until legal processes are commenced against this nation. That is not good for our reputation and it is not good for the processes we use to evaluate legislation properly. I say that by way of general commentary.

The objective of the Bill, as the Minister of State said, is to give effect to EU Directive No. 2017/1371, or at least the remaining parts that have not been transposed in previous legislation, and to extend the definition of fraud. The Bill provides for a new offence of misappropriation and the extraterritorial application of certain offences. That, in essence, is the thrust of the legislation. Its purpose is to create a stronger and more harmonised system to fight crime, namely, crime that affects the EU budget. The legislation is designed to protect the internal funding mechanisms of the EU itself. Those mechanisms are growing, they are important and very considerable and we need to ensure that money disbursed across the 27 nations of the EU, with their different legal systems and different traditions of oversight and so on, is done in a very robust way in order that all taxpayers throughout the Union can have full confidence that the moneys are properly appropriated and used for the purposes that the European Parliament, Commission and Council determine.

The Criminal Justice (Corruption Offences) Act 2018 transposed part of this directive. We are finally getting around to dealing with the untransposed parts in this particular legislation. The EU Anti-Fraud Office estimates the damage from fraud within the EU budget to be more than €500 million per year. There are many within the Union who regard that as a gross underestimate. The UK House of Lords did its own estimate, for example, which was multiples of the EU estimate on an annual basis. I understand we do not have a proper estimate of money that is misappropriated. We need not only to strengthen our laws but, following on from the debate we just had about Garda oversight, we also need to have financial oversight in a robust fashion within the EU. The largest fraud, according to the report of the UK House of Lords investigation, was in the area of VAT. Of course, VAT is the big generator of resources for the Union. These are matters on which we might usefully have further debate in terms of how we monitor expenditure. We have the European Court of Auditors, and our own member of that court, but, in many instances, it is seen as our sending somebody to Luxembourg who disappears over there and we do not hear very much more from him or her. Perhaps we do not ask enough questions in that regard and it is our fault. We certainly need to look at these matters.

The Minister of State made several mentions of the new EPPO, which was to be established from 2017. It is still not operational, even for those countries that have subscribed to it and that fully intended to participate in the process. It would be interesting to hear a more detailed discussion on how that office is going to develop and how we, as a nation, will be impacted. From the Minister of State's explanation of why we are not joining the 22 nations out of the EU 27 that are going to be part of the EPPO process, it is partly because of the operation of common law in this jurisdiction and partly because of the constitutional difficulties that might arise from that independent office and the way it does its business. It comes down to a very fundamental point about which we will have to have some debate, namely, the divergence of our common law tradition and the civil law tradition of the EU. Following the exit of the United Kingdom, Ireland and Cyrus are the only two remaining common law jurisdictions. Like all the debates we have had about the impact of the exit of the UK, it is important to note that, in many instances and in many fields, we formerly lay in the shadow of the UK in terms of its impact within the EU. One of the things the UK did was to ensure that when European law was being drafted, because of its size, scale and capacity, it was able to push in with its common law tradition and ensure that European legislation could not be interpreted in a way that did damage to our own common law traditions. I am afraid that the situation is now very fundamentally altered because I do not see Ireland and Cyprus having the same capacity to do that.

This is an issue to which we must give some consideration. I was just rereading the very interesting comments by the Attorney General, Paul Gallagher, SC, before he was reappointed to that office. He was talking at a seminar on Brexit and made some of the points I have raised. He talked about the difference between the two legal traditions and how that difference is now, in his phrase, coming to a head post Brexit. He spoke about how that is going to impact upon us in the future when significant differences arise, such as in the way we have, in our common law tradition, allowed the courts to be, in some ways, not only the interpreters of law but the instigators of law. Many of the most impressive things that have been done in this country, in fact, have been decisions of our highest courts reinforcing principles and creating law. It will be an interesting new issue for us to address how we are going to continue with those traditions in the context of European law more and more being not only dominated by but, in fact, overwhelmed by a civil law tradition.

I would be interested in hearing the Minister of State's views on that matter.

I have no difficulty at all in supporting this legislation. "Is é a locht a laghad," is the only comment to be made about it, in that we can go an awful lot further in dealing with the whole issue of fraud and theft, not only as it pertains to funds belonging to and originating in the institutions of the EU but also as it pertains to white-collar crime, which other speakers have mentioned. In this regard, our structures are wholly inadequate. The previous speaker talked about the Office of the Director of Corporate Enforcement. By everybody's assessment, it is simply not geared up, resourced or able to do the task we now give it in the context of the complexity of financial services operating from this jurisdiction. We are a long time waiting for the fundamental reforms we were promised. I hope we will be dealing with that legislation very shortly.

The most recent document I have read on the subject of the scale of operations out of Ireland is from 2015. It was commissioned by the Department of Finance. In the period covered, over 400 companies were operating in financial services in the State, employing 35,000 people. Staggeringly, the companies were handling €3.2 trillion in funding and paying in excess of €2 billion in taxes and €2.3 billion in wages to employees in our State. I am afraid that Departments and Governments sometimes consider only the bottom line for ourselves, the tax take and the employment rate and they are a little reluctant to robustly ensure the companies paying those taxes and wages are regulated to the highest possible standards.

I want to mention a Private Members' Bill I introduced just before Christmas. It is another criminal justice Bill, the Proceeds of Crime (Gross Human Rights Abuses) Bill, more commonly referred to as a Magnitsky Bill. The Minister of State will be perfectly aware that in the European Parliament itself and in several jurisdictions, including the United Kingdom and the United States, Magnitsky Bills have been enacted. These are Bills named after the Russian citizen who tried to expose fraud in his own country, Russia, and who ended up being imprisoned and dying simply because he was a campaigner against wrongdoing and fraud. The idea of a Magnitsky Act is that where there is a gross abuse of human rights anywhere and the perpetrators have funds in our jurisdiction, we can act against them in the same way as the Criminal Assets Bureau can act against domestic criminals. If trillions of euro are washing their way - I do not use that term in a pejorative sense - or moving their way through our financial services sector, we certainly need to have robust legislation to ensure that if there are gross human rights abuses abroad, the perpetrators cannot use our jurisdiction as a safe place to stash their ill-gotten gains or their filthy loot. I hope my Bill, when it comes before the House, will be supported by the Government. In my judgment, it would attract broad support across all sectors of this House.

We are required to enact the Criminal Justice (Theft and Fraud Offences) (Amendment) Bill on foot of a European directive. It has arrived here slowly. On the face of it, having examined the Bill, the Seanad debates and the relevant analysis done, including by our own services in the Oireachtas, I believe it is fit for its stated purpose, which is to give greater legal strength to the protection of funding of the EU and to act against those involved in fraudulent activities against the funds of the EU. Again, as with all legislation, implementation will be the issue. This includes the question of how the legislation is to be implemented. We are not going to be participants in the new European Public Prosecutor's Office, EPPO. I am not clear from the Minister of State's Second Stage speech how Ireland, as a state, and those other states that are not formally participating in the EPPO, will interact with it once it is established. What will be the equivalent of the EPPO for Ireland? What body will have its functions and authority here? Alternatively, will there be some authority or functioning of the EPPO in our jurisdiction, notwithstanding the fact that we will not be formally participating in it?

I hope the deadlines for the passage of this Bill can be achieved in order that we can report to the European Court of Justice that we have done our business finally, that there will be no financial consequences for tardiness on our part and that we can strengthen our common focus to ensure fraud and theft of public moneys are combated to the best of our ability.

To return to the domestic situation, an increasing number of citizens are considering how we introduce criminal justice legislation in this jurisdiction, how clear, precise and accurate we are in dealing with theft, as in somebody robbing something from a shop, and, at the same time, how obtuse or opaque we are at times in ensuring that theft of a far greater scale, or what is euphemistically referred to as "white-collar crime", is combated to the same extent. We are all critical at times of the United States and of how its criminal justice system operates, and also of how its prison system or plea-bargaining system operates - there are plenty of things to be critical of - but we cannot be critical of the fact that where someone is found out for serious fraud there and somebody from the judicial system puts a hand on his or her shoulder, that person knows it is a very serious matter and that he or she will go to jail for a very long time. I am not sure that people operating in our jurisdiction feel the same weight on their shoulder when they are tempted to commit so-called white-collar crime or fraud. This legislation is a start in addressing this issue insofar as it relates to EU funding but we have an awfully long way to go to ensure not only that we have robust laws but also that we have robust mechanisms to delve into the complexities of the electronic trading that now characterises so much of the activity in the services sector in our country. All this activity is welcome but it needs to be policed to protect our reputation as a country where funds are invested, handled and dealt with in an efficient but fair manner and where nobody is exploited or allowed to get away with fraudulent activities because of our inability to detect them. I hope legislation to achieve this can be put in place here.

See this speech in context