Catherine Murphy (Kildare North, Social Democrats) | Oireachtas source

This Bill, as has been stated by the Minister of State and the Government, is largely technical in nature, protecting the EU's financial interests and creating offences around fraud affecting the financial interest of the EU.

We are generally supportive of it. It is welcome to see legislation that will tackle this issue, given that estimates of the volume of fraud against the EU budget range from €400 million to €5 billion, including an estimated €1 billion linked to VAT fraud. This is a massive expense on the European taxpayer and it removes a huge sum from vital services and supports. We stress the importance of good governance, scrutiny and oversight in passing legislation. Time and again, successive Governments have lacked a proactive approach to transposing EU directives, frequently missing deadlines and passing legislation only in the nick of time, as though our arm is being twisted. There is a resistance and we have to change that culture.

On 11 July 2012, the European Commission submitted a proposal for a directive of the European Parliament and of the Council on the fight against fraud to the Union's financial interests by means of criminal law. The proposal led to an examination in September of the same year, and in June 2013, the general approach was agreed. It then went through the European Parliament in 2014. Legislation such as that which is before us has a long lead-in time before it becomes a directive, and then countries have to transpose it. We are elongating that process by virtue of the fact that we are laggards when it comes to transposing EU legislation. We are serial offenders in regard to not transposing directives in a timely way.

On 3 December, the Commission sent a reasoned opinion to Ireland and Romania for failing to transpose this directive into our criminal code. We talk a great deal about being good Europeans but how we act is very different. It is interesting that our former partners in the European Union, the UK, were actually very good at transposing European legislation in a timely way, whereas in that sense we compare very unfavourably. This directive should have been transposed on 6 July 2019, and this delay cannot be blamed on Covid. Time was given to conduct an analysis and present the Bill in a timely manner, but the then Department of Justice and Equality did not do that. Some aspects of the directive were transposed previously under the Criminal Justice (Corruption Offences) Act 2018. Why is it that this aspect of the direct was pushed back for so long when, by the Government's admission, this is largely technical and uncontroversial legislation? The objective of the legislation and of the directive is to harmonise the rules in respect of fraud and to ensure consistency in criminal sanctions. Doing so will improve the effectiveness of both investigations and prosecutions, given that all police forces will operate with largely the same rules, even if they are not under the same agency.

We have traditionally allowed white-collar crime to play second fiddle. Even though there is applicable legislation on the Statute Book, the level of enforcement has lagged behind that for other crimes. This is the case even when very large sums of money are involved. Whether someone robs a bank or steals money on the other side of the counter, we pay a price for it. We often enact legislation without considering the need for regulatory impact, with an enforcement agency and the capacity to enforce it properly.

In 2015 or 2016, we in the Social Democrats proposed an anti-corruption agency to focus on white-collar crime. That proposal was about effective enforcement with strong powers, including the power to arrest and prosecute, but also about having a remit that would encourage compliance and assist with compliance to foster a better culture. We modelled the proposal on the New South Wales model, which was very effective. It would incorporate several agencies and particular disciplines could be moved around as required, including, for example, forensic accountancy. Companies would be liable for offences committed by directors, employers, agents or subsidiaries, unless they could demonstrate they had taken appropriate action to ensure compliance. Advice is needed to ensure that people come into compliance. We need to get to the point where compliance is in line with best practice, but that will not happen by accident. That is why we put forward our proposal and we remain as convinced as we were when we published it that there is a need for something bigger and more robust. While it is welcome that the Office of the Director of Corporate Enforcement is to be improved, we should not limit ourselves in respect of the improvements that can happen in this area, which is growing and demands much greater attention.

Meeting the EU transposition deadlines is not a matter of courtesy; by missing them we waste time and resources and face possible fines from the EU when it initiates infringement processes against us, as it did in this case on 3 December. Hopefully, we can avoid penalties if the directive is enacted in a timely way. Elsewhere, in regard to other legislation, Ireland was fined €5 million, along with additional daily penalties of €15,000, over landslides at a Galway wind farm. That happened in 2003 and still the issue has not been remedied. I understand that in Limerick, €100,000 was spent on CCTV cameras but they are covered by hoods because they are not in compliance with European directives. Not only do we have a problem with compliance, therefore, we have a problem with understanding the superior nature of European legislation. Only recently, legislation was passed in respect of the right to information as part of the debate on mother and baby homes. We need a better understanding of where Irish and European law is positioned.

It is strange that the Government would state that the key issue is that the State should aim to act lawfully, thereby avoiding fines and reputational damage. Of course that should be the aim. It is not just fines; citizens can go to the courts to seek remedies where the State is liable for not acting within the law. While most people cannot afford to do that, it is not what people will want to do in any event; they will want to be in compliance in the first instance.

What is the basis on which the Government prioritises directives? Is a system in place or is it just at departmental level? Is there a priority list? It does not seem to flow but rather seems to be an afterthought, whereby we say we will get to them but we do not really want to. We have to change our behaviour in regard to coming into compliance. It would be highly beneficial if all Departments could indicate exactly what is in the queue and where we are likely to fall into non-compliance, even if that is done through the various committees. There is probably a role to be played by our MEPs in determining which of our obligations require urgent consideration and which work we should be planning in order that we can address it in such a way that keeps us in compliance and in order that we will have a better culture of compliance.

That includes the Oireachtas as much as it does Government. Ultimately, it will go through our committee system when we enact legislation and through the various Stages before it is passed.

I endorse what the Minister of State said earlier about the amendment being very much separate but it is urgent at the same time. It is not something for this legislation. That does not mean there should be a lack of urgency about dealing with it, however.

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