Thursday, 11 February 2021
Counterfeiting Bill 2020: Second Stage
I move: "That the Bill be now read a Second Time."
I welcome the opportunity to present the Counterfeiting Bill 2020 to the House. According to European Central Bank, there are 25 billion euro bank notes in circulation with a value of more than €1.4 trillion. EU authorities and all member states share a responsibility to protect the currency against counterfeiting. This is achieved through a comprehensive package of technical, administrative and criminal law measures which have been very successful to date. Recent figures published by the ECB show counterfeiting is down 17% year on year and is now at an historically low level. In 2020, the chance of a note being counterfeit was only 17 in 1 million. Most counterfeits are of low quality and are quickly detected and removed from circulation. Although this threat has been contained, with high-tech security features making euro bank notes secure and easy to distinguish from counterfeits, the regime will continue to evolve to ensure protection in the future.
The Bill will update Irish law to reflect four pieces of EU legislation in the area. These are, by and large, already implemented, either in law or existing practice. However, some technical changes to the relevant offences are required to harmonise our existing framework with EU requirements. Part 3 of the Bill will also complement the extensive legislation already in place to underpin the Central Bank’s activities by placing existing bank practice on a statutory footing in relation to certain issues.
While the Bill is technical and complex, it simply reflects the evolution of an already very successful regime and ensures we meet our EU obligations. The Bill will transpose a number of outstanding elements of the counterfeiting directive 2014/62/EU, as well as the ECB euro bank note decision ECB/2010/14, the euro coin regulation 1210/2010 and the euro counterfeiting regulation 1338/2001. The current law on counterfeiting is contained in Part 5 of the Criminal Justice (Theft and Fraud Offences) Act 2001, which gives effect to the earlier EU measure in this area, namely, Council Framework Decision 2000/383/JHA.
The 2014 directive on the protection of the euro and other currencies against counterfeiting by criminal law updates and replaces the 2000 framework decision. The directive establishes minimum rules concerning the definition of criminal offences and sanctions in the area of counterfeiting of the euro and other currencies. The main focus of the directive is found in Article 3, which requires criminal offences in respect of making, uttering or importing counterfeit currency and possessing instruments and security features for making counterfeits. While for the most part the provisions on counterfeiting in our existing 2001 Act meet the requirements of the 2014 directive, it is necessary to make a number of amendments to this Act to align with the 2014 directive and fulfil our obligations under the EU acquis. In general, the offences provided by the 2014 directive already have an equivalent under the 2001 Act, but technical amendments are being made to update some of these existing defences. On 3 December 2020, the European Commission issued a reasoned opinion in respect of the remaining aspects of the transposition of this directive. There has been ongoing engagement with the Commission and we have identified the elements already provided for in Irish law. Several aspects arising from the directive are being refined and clarified by this legislation, including the import and export of counterfeits from non-EU states, the use of legal instruments for illegal purposes, the counterfeiting of non-circulated currency, possession of materials that may be used for counterfeiting, extraterritorial jurisdiction and liability of bodies corporate. These changes are contained in Part 2.
In addition to transposing the outstanding elements of the 2014 directive, the Bill will also provide for statutory powers in respect of monitoring, supervision, enforcement and some related powers in relation to three interrelated EU legal instruments which are binding in their entirety and directly applicable in member states. These are Regulation 44/2009 of 18 December 2008 amending Regulation (EC) No 1338/2001 laying down measures necessary for the protection of the euro against counterfeiting; Council Regulation 1210/2010 of the European Parliament and of the Council of 15 December 2010 concerning authentication of euro coins and handling of euro coins unfit for circulation; and Decision of the European Central Bank ECB/2010/14 of 16 December 2010 on the authenticity and fitness checking of bank notes. These measures are already in force and monitored by the Central Bank.
Part 3 will place existing practice on a statutory footing and give the Central Bank powers in respect to some firms which did not fall under existing financial regulation legislation. This Part addresses issues which are primarily the responsibility of my colleague, the Minister for Finance. Department of Finance officials have been actively engaged with the Department of Justice, the Central Bank and the Office of the Parliamentary Counsel on the drafting of the Bill. These changes will provide the necessary powers and functions for the Central Bank of Ireland in respect of monitoring and enforcement measures relating to suspect counterfeit euro currency and currency deemed unsuitable for recirculation. The Central Bank of Ireland is also the Irish branch of the European Central Bank and, as such, is responsible for, and needs the power to, fitness check the euro notes and coins we all use without thinking.
I move to the specific provisions of the Bill. Part 1 is a standard provision that sets out the Short Title of the Bill and arrangements for the commencement. Part 2 runs from section 2 to section 10. It sets out the amendments to the Criminal Justice (Theft and Fraud Offences) Act 2001 to give full effect to the 2014 directive. Section 2 is a standard provision providing for the definitions for Part 2. Section 3 amends section 232 of the 2001 Act to include definitions in line with requirements of Article 3 of the 2014 directive. These include the definition of "currency note", "coin", "counterfeiting instrument" and "security feature".
This section also provides for the interpretation of a word or expression used in this Part that is also used in the 2014 directive.
Section 4 creates a specific offence of making or altering a designated note or coin with the intention of passing it off as genuine. Section 5 creates a new offence of receiving, obtaining or transporting anything that a person knows or believes to be a counterfeit note, with the intention of passing it off as genuine. This complements the existing definition under section 34 of the 2001 Act. Section 6 substitutes the existing offence in section 36 of the 2001 Act in respect of receiving, obtaining and having control or custody of currency instruments, counterfeiting instruments or security features for the purpose of making a counterfeit note or coin with the intention of passing it off as being genuine.
Section 7 revises section 37 of the 2001 Act in respect of importing or exporting a counterfeit currency note or coin. Section 8 provides for extra-territorial jurisdiction in respect of the relevant offences under the Part. This refines the approach taken in the existing section 38 to provide a more robust approach. Section 9 provides for the liability of a body corporate. Section 10 amends section 39 of the 2001 Act by defining designated bodies, credit institutions, transporter of funds and payment service provider. The new definition of a credit institution will incorporate several institutions previously listed in section 39 of the Act.
Part 3 of the Bill relates to the obligations of relevant persons in respect of ensuring authenticity and fitness of euro banknotes and coins. It sets out the monitoring, supervision and enforcement powers required by the Central Bank and also provides for the obligations in respect of relevant persons. Section 11 provides the definitions that will apply to Part 3, including the relevant persons to whom the obligations apply. Section 12 provides for the functions and powers of the Central Bank of Ireland, CBI, including monitoring and taking measures to ensure compliance with EU instruments, ratifying the specific procedures referred to and performing specific controls and functions to which reference is made. Section 13 provides that the CBI may impose requirements on relevant persons to take specific measures, including measures to rectify non-compliance with certain obligations and to comply with a condition of a permission granted by the CBI. Section 14 provides for regulation-making powers for the CBI to provide for circumstances where EU legal instruments specify national regulations. Such regulations shall be made after consultation with the Minister for Finance. Section 15 provides that where it is necessary for the purpose of the performance of its functions under this Part, the CBI may require a relevant person to provide information, records, plans, etc.
Sections 16 and 17 provide for the appointment of authorised officers by the CBI to perform the functions under section 12. Sections 18 to 20, inclusive, deal with the powers of an authorised officer to enter a premises for the purpose of the performance by the CBI of its functions under section 12. An authorised officer may not enter a dwelling unless the occupier consents or a warrant has been issued under section 20. These powers are modelled on the bank's existing authorised officer powers under the Central Bank (Supervision and Enforcement) Act 2013.
Section 21 provides that the provision of information by a person under this Part shall not be treated as a breach of any restriction under any enactment or rule of law and shall be without prejudice to the lien on the record or document. Section 22 provides that where a person refuses to provide or give access to information on the grounds that it is privileged legal material, that is, legal professional privilege, the CBI may, subject to certain criteria, apply to the High Court for a determination on that specific matter.
Section 23 sets out specific obligations in the relevant EU legal instruments that must be complied with by a relevant person and provides that a relevant person who fails to comply is guilty of an offence. Section 24 provides for High Court orders if a relevant person fails or refuses to comply with a requirement imposed by the CBI, while section 25 provides for an offence of obstruction if a person obstructs or impedes the CBI or an authorised officer, does not comply with a requirement to provide information, records or other documents which he or she knows to be false or misleading, or falsely represents himself or herself to an authorised officer. Subsection (3) deals with self-incrimination.
Part 4 of the Bill, comprising sections 27 to 31, inclusive, places on a statutory footing the designation of the currency centre of the Central Bank as a national analysis centre, NAC, for euro notes in section 27 and the designation of the coin national analysis centre, CNAC, for euro coins in section 28. Sections 29 to 31, inclusive, provide for consequential amendments to other Acts arising from the Bill.
In conclusion, the Bill will fully update Ireland's legal and administrative regime in respect of counterfeiting. As I mentioned, officials from the Department of Finance and the Office of the Attorney General have worked closely with my Department to draft this complex but necessary Bill. I thank both the Minister for Finance, Deputy Donohoe, and the Attorney General, as well as their officials, for their continued input and support. As is required by EU law, we have requested the observations of the European Central Bank, ECB, on the Bill and will consider these once they are received.
We are continuing to consult stakeholders in respect of certain provisions under Part 2 and it may be necessary to bring forward amendments on Committee Stage to further refine sections 6 and 8. We also intend to provide for appropriate commencement provisions in respect of Part 4.
As I mentioned, the transposition date in respect of one of the instruments, the 2014 directive, has passed. Departmental officials engaged with the Commission as the Bill was being prepared and a reasoned opinion was issued on 3 December 2020. It should be made clear that the vast majority of the requirements set out in the directive are already complied with by existing law or in administrative practice. It is not the case that there are significant gaps that we are filling. Rather, we are refining our approach to harmonise with the directive and place certain aspects on a clearer statutory footing.
This is ultimately a technical Bill, but it is important that we get it right. Ensuring a high level of trust in the currency is in everyone's interests. I look forward to working with Deputies on the details of the Bill.
Mar a dúirt an tAire Stáit, is Bille sách teicniúil é seo ach is Bille fíorthábhachtach é agus mar gheall air sin, beidh muid ag tacú leis. Beidh sé ag dul chuig na coistí agus ba bhreá liom dá mbreathnódh muid níos gaire ar pháirt 3 agus páirt 9. Tá na páirteanna sin fíorthábhachtach agus chóir dúinn breathnú níos géire orthu agus muid ag plé an Bhille sna coistí. There is a perception domestically and internationally that Ireland can be soft on white collar crime. On the issue of the transposition of EU directives which are designed to improve transparency and accountability and provide sanctions to deter those tempted to engage in wrongdoing, Ireland is often frustratingly slow to implement these directives. In fact, it sometimes seems that we are the unruly child who must be dragged by the ankles, kicking and screaming, to get in line with our EU peers. We were slow to implement the EU financial instruments directives which provided for greater regulation to increase transparency across European financial markets and standardise the regulatory disclosures required for firms. We were slow to transpose the EU anti-money laundering directive which was designed to combat money laundering and prevent the financial market from being misused for those purposes. In fact, we were so slow to implement this directive that the European Court of Justice ordered Ireland to pay €2 million in fines last year. That is remarkable, considering that a report by Europol found that between 2006 and 2014 Ireland had 2% of all reported suspicious financial transactions of EU member states. We have also been slow to implement the outstanding elements of the EU directive on the protection of the euro and other currencies against counterfeiting, which is the Bill that is now before the House.
As the Minister of State mentioned, this is a highly technical but very important Bill. The deadline for transposing the directive was 23 May 2016. Ireland is the only member state that is yet to transpose it. By way of background as it is quite technical legislation, the Bill provides for the implementation of several European instruments relating to the protection of the euro from counterfeiting. It concerns measures to ensure the appropriate authentication of euro coins and notes and it calls on member states to introduce criminal offences and sanctions relating to counterfeiting of the euro and other currencies. It introduces common measures in respect of same. The directive also addresses territorial jurisdiction and requires special investigation measures. The importance of protecting against counterfeiting lies in the need to ensure confidence and trust in the authenticity of currency. The Bill provides for a range of new powers and functions for the Central Bank of Ireland in respect of monitoring and enforcing measures relating to suspect counterfeit euro currency and euro currency that is not deemed suitable for recirculation.
Since its introduction in 2002, the euro as a currency has been continuously targeted by organised crime groups active in money counterfeiting. Counterfeiting of the euro has caused financial damage of at least €500 million. According to the ECB, there were approximately 24 billion euro banknotes in circulation, with a total value of close to €1.3 trillion.
In the second half of 2019, the €20 and €50 notes continued to be the most counterfeited banknotes, jointly accounting for over 70% of all counterfeits.
As the Minister of State outlined, this Bill comprises 31 sections and I certainly do not propose to go into all of them. I will merely touch on two of the sections which I think are the most pertinent and might need greater scrutiny on Committee Stage before making a broader point that I am worried this legislation will not address but which needs to be highlighted as it relates to wider criminality and white-collar crime.
The first section I wish to highlight is section 3, which expands definitions to include computer programmes, data and other means of counterfeiting. I note that the Government has made certain commitments on combating cybercrime in the report on the future of policing, including the provision of more expertise and resourcing for emerging areas of crime, especially related to technological innovation. It is worth flagging that there is concern that some gangs have become increasingly technically savvy and are able to use bitcoin and those kinds of things for illicit transactions. I hope that the additional resources that have been promised will meet the needs of the moment because laws are all fine and good but if these organised crime gangs are becoming more technically savvy than our law enforcement officials, there is a real risk they will be able to run rings around the law. Enforcement is, of course, key, as well as resourcing.
I also wish to flag section 9 of the Bill, which concerns criminal liability for corporate bodies where they or their staff may have been engaging in, or benefiting from, counterfeiting. However, just as was the case with the Criminal Justice (Theft and Fraud Offences) (Amendment) Bill 2020 we discussed two weeks ago relating to fraud and embezzlement against the EU budget, there is a significant defence created for these entities if they can prove they took "all reasonable steps and exercised all due diligence" to prevent such behaviour. I have concerns about this provision because this potentially provides a get-out-of-jail-free card for larger companies that might benefit from these activities, particularly financial institutions. A recent example of which we are all aware was the so-called Russian Laundromat, which showed the interactions between dark networks and white-collar crime. In other words, there are occasions when illicit financial transactions can use the licit economy to disguise the proceeds of crime. I would be concerned were there to be light-touch regulation that makes our financial system susceptible to misuse by those engaging in financial crimes. That is, of course, very concerning. Anyone who has ever reviewed some of the prospectuses for certain companies from emerging markets that list debt on the Stock Exchange and some of the questionable risks they list therein will know what I am talking about. This will need to be looked at more closely on Committee Stage but I flag those concerns today.
I also raise an issue that I do not think has been addressed by the various EU directives that have been transposed recently and which relates to organised and white-collar crime. It plays a key role in illicit financial transactions and touches on the idea that legitimate parts of our financial system can be used in the service of illicit purposes. The issue to which I am referring is the use of high denomination notes. High denomination cash notes are, of course, perfectly legal but the reality is there is considerable concern that they are primarily used by people involved in organised crime. We know that high denomination notes play a significant role in global money laundering, corruption, tax dodging and organised crime. We can all ask ourselves when was the last time we saw a €500 note in the flesh. I would hazard a guess that most people have never seen one, let alone had one in their possession. There is concern about that.
Over ten years ago, Britain's regulatory authorities banned the use of €500 banknotes in Britain after a study by the financial intelligence unit found that more than 90% of €500 banknotes in Britain were used by criminals. Tests by the Serious Organised Crime Agency revealed that it was possible to carry €25,000 in €500 notes in a cigarette packet, €300,000 in a cereal box and €1 million in a small briefcase. That provides a stark visual for how these high denomination notes can be used and how easily they can be transported. The €500 note is the highest value euro banknote and was produced from the introduction of the euro in 2002 until it stopped being printed in 2014. Two years ago, the printing of this banknote was stopped by central banks in the euro area but it nevertheless continues to be legal tender and can be used as a means of payment. Whether it needs to be taken out of circulation altogether needs to be looked at.
Mar a dúirt an tAire Stáit ag an tús, tá sé fíorshoiléir gur Bhille sách teicniúil é seo agus go bhfuil sé tábhachtach. Mar sin, táimid ag tacú leis. Beidh sé an-suimiúil é a phlé sa choiste agus mar a dúirt mé, ba cheart dúinn breathnú ar an dá alt sin, alt 3 agus alt 9, chun cinntiú go bhfuilimid ag déanamh chuile rud gur féidir linn chun stop a chur leis an gcineál oibre seo nó an misuse ar chúrsaí airgid. Tá súil agam go ndéanfaidh muid chuile rud gur féidir linn chun stop a chur leis seo.
We cannot be soft on white-collar crime. White-collar criminals should not be allowed to operate under a shroud of acceptability. There is a direct connection between the visible crimes that we see daily and white-collar crimes. Proceeds from street muggings, car break-ins, burglaries and other daily occurrences in our streets filter their way up to white-collar criminals and just because these white-collar criminals do not have dirt under their fingernails does not mean their hands are clean.
Money laundering, cybercrime, counterfeiting and fraud are the tools used by these white-collar criminals. Mixing with the so-called upper echelons of society and displaying the trappings of their ill-gotten gains through fancy homes, fancy cars and golf club memberships give these white-collar criminals an air of respectability they do not deserve. They walk around in their flash suits, looking down their noses at people in tracksuits. With the click of a button on a laptop, this dirty money gets moved from one place to another and comes up clean on the other side. We need to put things in place to stop this from happening.
I note the Government's commitment on cybercrime in the report on the future of policing but commitments are not worth the paper they are written on unless they have political will behind them. Commitments need to be resourced and enforced. We cannot be soft on cybercrime. We have all seen recent headlines about serious organised crime in this country. Organised counterfeiting and fraud are only possible with the types of immense resources possessed by large criminal gangs.
Most things in life have a way of filtering down but dirty money also filters up. The money that the mother borrowed from the credit union to pay the drug debts of her child flows right up to the modern skyscrapers where, at the click of a button, it is sanitised. A recent report stated that a quarter of the people in Dublin's north-east inner city have experienced drug-related intimidation and over 80% see it as an issue but less than one in five would report it. Drug-related intimidation is not confined to one area of Dublin. I have met parents in my own area who have been forced to pay drug-related debts that their children have accumulated. The debts that the children apparently owe these unscrupulous dealers are frequently exaggerated to parents who end up paying exorbitant amounts back to these dealers for fear of reprisals. Is this not fraud at a very base level? This is the money that flows up to these white-collar criminals.
In response to a parliamentary question I asked about the amount of assets seized by the Criminal Assets Bureau, CAB, I was pleasantly surprised that there has been an increase in the amount of money seized. In 2019, almost €65 million was seized by CAB. While I welcome the seizure by the State of this ill-gotten money, it is just the tip of the iceberg of what is going on. That €65 million originated in areas such as my own. It originated in the purses of mothers paying drug debts for their children. The money originated in areas with high levels of deprivation and poverty caused by systemic failures in Government policies. The money currently goes back to the Exchequer but it should be ring-fenced to build resilience in the communities in which it originated. It should be ring-fenced for local drug task forces, mental health groups, family resource centres, unemployment services and other community groups that have been failed by successive Governments.
I suggest that the assets seized by CAB are just the tip of the iceberg.
Section 9 creates a criminal liability for corporate bodies where they or their staff may have been engaging in or benefiting from counterfeiting. If they can prove they took "all reasonable steps and exercised due diligence" to prevent such behaviour, that will be their defence. This potentially provides an out for large companies that might benefit from these activities. This cannot be allowed. I want to be clear that the interaction between cybercrime and white-collar crime should not be subject to a light touch in this country, and that we must look at this more closely on Committee Stage.
I do not think anyone is particularly shocked that there is a need to update and streamline the legislation on counterfeiting, given the multiple issues that have occurred recently. There have been cross-jurisdictional issues concerning material and the question of who is liable. Technology has changed in recent years. We must also ensure there are processes in place so that those involved in financial institutions can pass on information in cases where they believe there has been counterfeiting or white-collar crime. As Deputy Ward said, the connection between what we sometimes term white-collar crime and the cleaning process is not that much removed from the organised crime and drugs gangs ravaging communities.
Deputy Mairéad Farrell outlined that at times the State has been slow to update and upgrade infrastructure and legislation and that sometimes we have been behind the curve. I welcome the fact that the Minister of State, Deputy James Browne, and the Minister, Deputy McEntee, are taking the issue head-on. We have had numerous pieces of legislation, which is positive. We will support the Bill proceeding to Committee Stage to ensure we have the legal framework, capacity and infrastructure to deal with white-collar crime, surveillance, investigation and enforcement. We cannot leave any stone unturned in that regard.
As I do in many such speeches, I ask for some leeway in terms of seeking a response from the Minister of State. We are dealing with cybercrime and the need for the State to have the capacity to deal with it. I wish to ask the Minister of State about the capacity of the National Cyber Security Centre. Previous speakers referred to the fact that the report on the future of policing indicated that we need to improve our capacity to deal with cybercrime. We are all aware of online and tech scams giving rise to major issues that impact on people. They include the impact on electoral contests by state and non-state actors using the communications infrastructure. Issues arise with tech companies and ensuring we have best practice and truth. We are all aware of the difficulties. Reference has been made to certain elections in America and even the Brexit referendum. There is a crossover between elections, crime, best practice and publication laws regarding tech firms and we must sort it out. I want to know where the responsibility falls and who will be the main players. We are talking about this being a cross-departmental issue involving the Defence Forces and the Garda. Will it be the responsibility of the National Cyber Security Centre or will there be a body similar to the FBI and the National Security Agency, NSA? What are the plans in terms of updating the legislation and ensuring we have the capacity, infrastructure and personnel to deal with cybercrime and its connection with organised crime? I would appreciate if the Minister of State could provide me with an update in that regard.
Every time I have spoken in any debate relating to crime, I have made a point about the drugs pandemic. I spoke on it in the House yesterday. The Minister has already said she is seeking to deliver legislation on the proceeds of crime, in particular to divert the proceeds of drug dealing to fund front-line services. However, it should not be the only source of funding. All the groups talk about the need for multi-annual funding. It is a natural justice aspect of the issue that needs to be sorted. The Minister of State, Deputy James Browne, and the Minister, Deputy McEntee, must persuade the Taoiseach to set a date for a Citizens' Assembly to deal with the drugs pandemic, notwithstanding the Covid difficulties. I would also welcome an update on the plans for a youth justice system that is fit for purpose. If I recall correctly, the University of Limerick, UL, Greentown study, indicated that up 1,000 children could possibly be open to involvement with criminal gangs, so we need something that is more fit for purpose than what we currently have.
We will be supporting the Bill. Once again, we find ourselves in a position where we are transposing a very long overdue EU directive. The purpose of the Bill is to transpose outstanding elements of Directive 2014/62/EU on the protection of the euro and other currencies against counterfeiting by criminal law. The directive calls on member states to introduce criminal offences and sanctions relating to counterfeiting of the euro and other currencies. It introduces common measures in respect of that. The directive also addresses territorial jurisdiction and requires special investigation measures. Has there been a regulatory impact assessment on what additional resources must be provided to ensure that this can be properly applied? The importance of protecting against counterfeiting lies in the need to ensure confidence and trust in the authenticity of the currency.
The deadline for transposing the directive was 23 May 2016. Ireland is the only member state that is yet to transpose the directive. As I stated last week, we often hear from the Government that we are good Europeans. However, in this particular context we have a mindset that is quite poor at transposing EU directives. Very often it happens when we are threatened with a fine or other sanction. We must change that mindset. We debated the Criminal Justice (Theft and Fraud Offences) (Amendment) Bill last week. That was due in July 2019. This country and Romania were threatened with fines. The deadline for the mutual recognition of custodial sentences Council framework decision of 27 November 2008 was 2011. The deadline for the control of the acquisition and possession of weapons directive was 2019. We can all give such examples, but we must change our behaviour in this regard. Very often the legislation is technical and it is difficult to figure out why we are repeatedly late.
We support the introduction of the Bill, but there may well be issues on which we will table amendments. The ECB reported that the amount of counterfeit notes taken from circulation in 2020 was at all-time low. A total of 460,000 euro banknotes were withdrawn from circulation last year in comparison with 559,000 in 2019.
In 2016, the year in which this directive should have been transposed, 684,000 counterfeit notes were found and removed from circulation. Approximately two-thirds of those withdrawn in 2020 were €20 and €50 banknotes. The ECB stated that these notes were all low quality reproductions, poor imitations of the real thing, and were easy to detect even by turning them over and examining them. Shopkeepers pay particular attention to that when alerted.
There was a significant drop in the number of counterfeits in the latter half of last year. That is probably an indication of the effect of the pandemic on the amount of cash in circulation. This trend is likely to continue because once people make a change, they tend not to go back. All methods of spending experienced a sharp decline in the early part of the first lockdown. The decline in ATM withdrawals was greater than the decline in card spending. While the number of ATM withdrawals has decreased, the average amount withdrawn is higher than historical averages. This shows a trend towards cashless transactions, with people reducing the number of times they use an ATM. Successive lockdowns have pushed consumers on to online platforms, while the raising of ceilings for contactless payments and the increased number of businesses accepting cash has encouraged card use. This trend has been replicated across Europe, with France set to shut down more than a third of its cash-handling centres by the end of 2022. As the Covid pandemic accelerates, the decline in the use of notes and coins is accelerating.
As our spending habits have changed considerably over the years, so too has the type of fraud we face. Previous speakers have described that well. While counterfeit notes and coins were the primary problem in the past, online and credit card fraud are now the main concern. In 2019, criminals made more than €22 million through more than 250,000 fraudulent credit and debit card transactions in Ireland. We saw one such high profile case being prosecuted successfully in the courts recently.
The Banking Payments Federation of Ireland, BPFI, noted that losses due to credit card fraud were down by 49% compared with 2016, with the decrease in fraud being even more marked when compared with the 28% increase in credit and debit card usage in the same year-long period. More than 90% of card fraud took place online rather than in-store. The decline in card fraud could be attributed to a combination of better detection and fraud monitoring systems put in place by banks as well as consumers becoming more aware of the risks of fraud and the ways they can protect themselves. The decline is promising but more effort is always required to drive these figures lower, especially with the increase in online shopping under Covid-19 restrictions.
Younger people in particular are at increased risk of fraud due to online shopping behaviour. Research carried out by the BPFI found that 39% stated they sometimes or always click on links in social media and advertisements rather than visiting the relevant sites independently. The number jumped to 59% among those aged between 18 and 24 years. Some 35% stated they rarely or never check the security of a website that they are shopping with. Women are much more likely than men to click on links in social media advertisements and less likely to check for the padlock symbol. Men are much more likely to send their card details by email, use public WiFi when making payments and purchase from unfamiliar sites. That indicates that there has to be a targeted approach in messaging. Particular groups are more trusting and there has to be significant effort to try to reduce that.
Public information is as good a vehicle as some other systems that have been put in place. We need to ensure that we are keeping up with developments in fraud and that the protections we have in place for consumers are sufficient. The fight against fraud is a matter of constant evolution and investment. Whenever new technological developments are put in place to protect against fraud, it is a countdown until fraudsters will find a way to work around those new systems.
We must be more timely in implementing protections against fraud and staying ahead. Looking at historical cases of counterfeiting and how it has changed, one might laugh at some of the things that happened in the 19th century. Coins were a focus of counterfeiting. Two articles indicate this. In Dublin, detectives stated that they found prisoners in the act of making coins, consisting of penny pieces made of "spurious bronze". They were base coins. The article refers to a number of moulds. The coins were seized and there was a court case as a consequence. Another article refers to poor quality florins, a two shilling coin. There are about five of those in a euro. Detectives were sent out to investigate this. There have always been people who will try this and money has always been a target of fraud. It is a question of staying ahead and there has been an acceleration with online services, where there will be significant exposure to fraud. We have to do better in making sure that we transpose these directives in a more timely way. We worry about our reputation but we do not do it any good by being laggards.
I am glad to have an opportunity to speak on this important legislation. I will comment on the extent to which technology is moving ahead and making it easier for authorities to counter money laundering and criminal gang activity. However, technology is also available to those who do not obey the law. There is ample evidence to tell us that these criminal gangs use updated technology to progress their organisations and that they do so effectively. We have all had experiences of attempted infiltration of our mobile phone systems, especially over the past weeks. The same applies to financial services and attempts made by gangs to infiltrate the system.
When the original EU legislation was passed, as far back as 2010, or 2014 in this case, it was deemed to be necessary at that stage and it was submitted for transposition into legislation in Ireland and the domestic legislation of other European countries, but we have only got around to transposing it now. I know we can say we were otherwise engaged with Covid, elections and so on but we need to show greater urgency in how we address such legislation in future.
Every moment lost is time given to those who use modern technology to make a profit and to enhance their own futures and the control they have. I hope that the Minister of State will note that the transposition of any EU legislation into Irish law in the future should be done at an earlier stage. We should do so at the very first opportunity unless there are compelling reasons to do otherwise.
Another point worth making regards the extent to which authorities in this jurisdiction were involved in submissions made to the EU authorities when the original legislation was introduced at that level. Any delays in the interim period could be very costly. We need to be alert to these challenges in the future. They do not go away. They are ever present. From what we have seen of the activities of organised criminals in this jurisdiction, we know that such activities have not diminished and that these criminals have enhanced their roles, their technology, their activity and their profits. We need to take account of that and to ensure that, where possible and where there are not compelling reasons not to do so, EU directives are transposed into Irish law. I hope that can be taken into account.
I am sure the Criminal Assets Bureau made submissions regarding the need for this legislation in the beginning or that it was at least consulted, as it should be. I congratulate the bureau on its efforts in countering and challenging national and international criminal activity. I hope that its current spate of successes can continue well into the future. I hope the day will come when the need for the bureau will not be as great as it now is. I am not sure such a day will come. As long as there are possibilities for people to make a profit at the expense of the general public or governments, they will do so. It is up to us, as legislators, to put in place the necessary provisions and obstacles to obstruct such activity.
Deputy Catherine Murphy mentioned the extent to which cash transactions have diminished over recent years, and over the last year in particular for obvious reasons. I agree with the Deputy but the legislation should not be constructed in such a way as to discommode the public to any great extent. We need to encourage and protect the public to ensure that they can carry on their business normally without interruption or threat. It is a matter for us to ensure that procedures are put in place to disturb, distract and discommode national and international criminal actors. I emphasise the international aspect. We are aware of Irish connections to criminal activity across the globe in virtually every country in Europe and outside of it. Irish people are regularly involved in scams and illegal profiteering through this system. It is essential that we note these issues and put such information to good use in determining how to deal with them.
I congratulate the Minister of State for bringing forward this legislation, subject to my comments on timing. I ask that a review be carried out of all EU legislation whose transposition into Irish law is pending. Perhaps such an assessment might be done with a view to identifying the most sensitive areas in which intervening at an earlier stage might be most beneficial.
I thank Mr. Daniel Hurley, parliamentary researcher, for his very informative digest of this Bill. The purpose of the Bill is to transpose an EU directive to make provision for three EU instruments dealing with the authenticity and fitness checking of euro banknotes and coins and measures for the protection of the euro against counterfeiting. The deadline for transposing the directive was 23 May 2016 so this legislation is a long time coming. Ireland is the only member state of the EU, apart from Denmark which in not in the euro area and which has opted out, that is yet to transpose the directive. This in inexcusable. We should, and must, do better.
It is interesting to note that the majority of the counterfeit notes are in the mid-range. Some 34% of counterfeit notes are €20 euro notes and 37% are €50 notes. A strengthening of the law in this area is long overdue. Counterfeit money is often passed in smaller shops and this can have a great effect on the profit margins of those shops. As a former volunteer in a charity shop, I know from personal experience that these shops have been targeted by counterfeiters. This can have a detrimental effect on the money they raise. They need this money to help many deserving causes. I am reminded of my school days, many years ago, when I first heard of Gresham's law. This is the economic maxim that bad money drives good money out of circulation. I understand that the incidence of counterfeiting is relatively low in Ireland but that it often funds other illegal activity. It is welcome that we are strengthening the law in this area.
As well the Minister of State knows, this Bill provides for the transposition of outstanding elements of Directive 2014/62/EU, a directive on the protection of the euro and other currencies against counterfeiting. The directive calls on member states to introduce criminal offences and sanctions relating to counterfeiting of the euro and other currencies. It introduces common measures in respect of same. The directive also addresses territorial jurisdiction and requires special investigation measures. The importance of protecting against counterfeiting lies in the need to ensure confidence and trust in the authenticity of currency. The deadline for transposing the directive was 23 May 2016. Ireland is the only member state that is yet to transpose the directive. The directive supplements and facilitates the 1929 International Convention for the Suppression of Counterfeiting Currency and its protocol, to which Ireland is a signatory. This requires that signatories to the convention ensure that sufficiently severe criminal penalties exist in respect of counterfeiting offences and sets out rules with regard to co-operation and jurisdictional issues.
I fully agree with the imposition of strict penalties for people who are involved in this kind of criminal activity. It is a serious threat to businesses in my constituency and throughout the country. This is a real threat to the livelihoods of the owners of small and medium-sized businesses. If they receive counterfeit money over the counter and do not realise that it is counterfeit, it will be lodged to the bank where the value of the counterfeit notes is taken out of the lodgement, leaving the businesses high and dry without any comeback. This is another attack on small businesses. To be honest, it would be an attack on any business but is particularly severe for small businesses. Every effort must be made to protect small businesses at this time. We must protect the local publican, the local shopkeeper, the local post office and so on. The opportunists carrying out these crimes have very little sense of the hardship they cause for businesses who suffer losses as a result.
I commend the community alert groups and business watch organisations that have been set up in towns. They are vigilant and immediately send out messages if counterfeit money is handed in over the counter in an area. This gets the word out quickly and lets people know that they have to be more careful. I pay tribute to these business watch and community alert groups because many of those involved are volunteers who are trying to make sure the community and the businesses in a locality are safe.
There are opportunities out there. Young people are trying to come up with good ideas that work.
I spoke yesterday evening about the BT Young Scientist and Technology Exhibition award where the winner, which is a great honour to west Cork and to the excellent Bandon Grammar School, was Gregory Tarr. He is 17 years of age and is a sixth year student and won the top prize for his project in detecting state-of-the-art deepfakes. This is a tremendous achievement for a very young man who has an incredible world ahead of him. Deepfakes are videos or images in which a person's face or body has been digitally altered in order that they appear to be somebody else and are often used to spread false information. In another sense, that is exactly what we are talking about here. I note a 17-year-old could come up with a solution in Bandon. I was lucky enough to meet this young man the year before at the BT Young Scientist and Technology Exhibition. We were allowed to attend there when there were no restrictions and I knew that this young man had tremendous potential. I see other schools throughout the country and in the little time that people have, the best time way they will ever spend it is inside this BT Young Scientist and Technology Exhibition awards. I have seen programmes in schools in Bandon including Hamilton High School, as well as others in Clonakilty and Skibbereen and back in to Schull, Bantry and Dunmanway, all of which have entered competitions, where young people come up with ideas to counteract the kind of scams that are going on. Gregory’s project involved detecting state-of-the-art deepfakes.
The funny thing is that when I asked Gregory whether the big social media companies such as Facebook or whatever had been in contact with him about his achievement and the answer was “No”. It is great to have such young people, where we hear so much criticism of them sometimes, and there are some magical young people. There was also a lovely project from other students about birds being covered with oil as a result of leaks where sheep wool was identified as a way of dealing with the problem. Gregory’s project was something akin to what might resolve a great deal of counterfeiting that is going on out there. There were no supports from the social media giants and no snapping up by them of this opportunity or encouraging this young man, who has a great talent, to go further. I am very proud to think that he is a west Cork man.
I hope we will come down strongly on those who are carrying out this counterfeiting of any sort, be it scamming on a card or on a person’s cash when they are passing it over the counter. The only way these people will be beaten is with heavy penalties and, when they are sentenced, that they be given the full sentence and will be made pay for their crime in the prisons of this country.
This Bill is to be welcomed, as any protection of the euro and other currencies against counterfeiting will benefit all members of the EU. There is a great importance in ensuring that the euro coin and notes are authenticated. The introduction of a criminal offence and sanctions relating to counterfeiting of the euro and other currencies will be of benefit and a knockback to criminals and crime. The only point I would like to raise is that the deadline for this Bill was 23 May 2016. Ireland is the only member state that has yet to transpose this directive. It seems that since 2002, counterfeiting of the euro has cost €500 million. What has been the impact on Ireland during this time? It is about time we have trust in our younger generation because it seems that the only way of combating crime in this country is by trusting in this generation. Why? Because their use of these information technology, IT, instruments is beyond belief. Deputy Michael Collins mentioned the young scientists a couple of minutes ago and they are coming up with ways of counteracting crime. We have all been privy to videos being put up about us that are all mixed together and untrue. A young scientist representing this country found a way of authenticating these type of videos.
The way forward for us, and it is been shown that since 2016 we are lagging behind in addressing this, is to trust in the young generation that can help us. They are miles ahead of us when comes to IT and pick it up a lot more quickly than we can. We should now entrust in education and allow them to educate us in order that they can actually help us combat crime. The amount of counterfeiting that is happening in this country may be small but the direct result for the businesses that are affected is the losing of their profits, which are minimal. When counterfeit notes go into the banking system when people are making their lodgements, the banks try to hold these notes. These notes should be brought back out, given to the person that has them, and the people should then be going to the Garda directly themselves in order to try to trace these notes to make these people accountable and to try to help the self-employed people in this country. At the end of the day that is their business and their livelihoods and we need to do whatever we can do to help.
In conclusion, I will take one minute, on a point of order from yesterday, where I saw a party yesterday going personal on another member of our Independent Group. It is absolutely disgusting when one sees a member of the Labour Party making personal comments about Deputy’s personal lives.
The Deputy is finished now on that topic as this is not relevant to the debate. I ask the Deputy to respect the Chair. If the Deputy is finished his contribution, I will now go now to Deputy Mattie McGrath-----
He might have to yet so I thank him in anticipation, if that is all right.
I will make a number of brief comments on this Bill. I have questions to ask the Minister of State. Is í an chéad cheist ná cén fáth go bhfuil an Bille seo ceithre bliana déanach? Why has it taken four years and are we four years behind? I know that the current Minister of State was not in office then but Departments seem to be lagging behind here. The Bill provides for the transposition of outstanding elements of Directive 2014/62/EU on the protection of the euro and other currencies against outstanding counterfeiting. We know that we nearly lost the euro back in 2008 and 2009 and we know the price that we paid in this country, and that our grandchildren, as well as those of the Cathaoirleach Gníomhach, will pay for the bailing out of the banks then to the tune of €69 billion. The Taoiseach said recently that we had no bailout. He would appear to have a selective memory loss on this point. It is very important that we do.
I welcome this in ways but in other ways I am worried. How many other items of legislation are waiting out there from the EU with demands, pressure, fines, or whatever way they operate, for us to implement at its behest? Where is the sovereignty of our own Parliament and our own self-determination gone? I was quite young at a time in 1973 but I remember putting up posters and helping out when we joined the EU and we had great hopes for it. We had many benefits from the EU but it now all seems to be payback time. I know that we are net contributors now rather than beneficiaries. The Taoiseach tried to dress up the last deal as a good one but it was a horrible deal.
There are huge areas here for roguery and skulduggery and we should be acting to stop that anyway, on our own terms, without being prodded, nodded and coerced by the EU.
As has been said by others, mol an óige agus tiocfaidh sí. I was party to the Zoom meeting organised yesterday by Teachta Naughten on the young scientist competition. We all miss that competition this year and the innovation and expertise displayed there. It is great to see where those young people can bring us. A question was posed to a young chap from Bandon in west Cork, I think, regarding whether he had been contacted by any of the technology giants and he replied that he had not. Perhaps he did not expect to be or want to be, but at least the ideas exist. We must bring them forward and let the young people show us what they can do.
I am very poor with IT skills and everything else, but this is an area where there are major possibilities online for the undertaking of deceit, deception and downright fraud. Earlier speakers referred to people getting offers online and we know the pressure that is inadvertently putting on local small traders, who cannot compete. There are grants available to help people to go online, but that is a big area.
In his reply, the Minister of State might address the question of how much more legislation there will be and why we are four years déanach in transposing this measure. I reiterate that it is a Wild West situation with banking in this country. I have been dealing with banks since the late 1960s or 1970. I do not have the best of eyesight, but I always hold up the euro notes to see if there is a line running through them. My understanding, however, is that the tellers, or whoever counted the notes when they came into the banks, who signed off on notes that were not legal tender then had to pay those costs from their own pockets. I also have a business and I am an employer, and I could not and would not treat employees like that. We all have breakages and damages and whatever, but we work to do our best and we do not have measures to punish employees. It seems however that the banks can do whatever they like, and can punish the customers 24-7. I will not use the adjective to describe what the banks do to their customers, but it starts with an "s", and it seems that they can also punish their staff.
We also have hard-working people behind counters in shops, fast-food outlets, takeaways or any kind of small businesses facing this situation of counterfeiting, and this is an even worse situation in respect of counterfeiting for businesses that are bigger, such as funeral providers. If counterfeit notes come in, wherever that cash is drawn from, even sometimes from credit unions, then that business is in trouble. Irish businesses deal mainly in good faith. We deal with people on an honest basis. People sometimes get money and do not know that some of the notes are counterfeit. Unsuspectingly, they then pass on those notes. That is a genuine mistake.
However, then there are crimes and people out there committing those crimes. I salute CAB and the different forensics units in An Garda Síochána. I especially salute CAB for undertaking a big operation in the south of my constituency yesterday and freezing €540,000. We cannot have enough CAB operations. In this area, as well, I want to support community policing. Those guards get to know people, and since the onset of Covid-19 we have seen a return to what those guards are best at, namely, going into people's houses and kitchens and helping out the elderly and vulnerable in communities - ní neart go cur le chéile - and getting to know people. That is the way in which it is possible to get to know people and that, in turn, will lead to getting information. It is not about a barracks being open, but about engaging on the ground.
If the Acting Chairman will allow me to digress a small bit - I did ask him earlier for some indulgence - regarding community policing, all those cars are being withdrawn now. The Acting Chairman will have seen this in his constituency in Dublin. It is a big disappointment. This is an important point, and community policing is very important-----
It has of course because if the community guards stand in people's kitchens and get to know the families and the people, and who is a bit dodgy in an area and garner other information like that, they will be able to pass it on. It is important to know where someone has a lot of cash, when people are wondering about how those people have that money and their means of getting it. That is very important, and goes back to basics and solving crime. Whether in the context of counterfeit notes or daylight bank robbery, it is important to have the community connection. Those guards will get the trust of the people. I am not calling those people who provide the information "informers", because that word has gone out with the Flood; they are civic-minded people telling about things going on that should not be going on. We must support them.
I salute the community gardaí, such as those under Sergeant Moloney in the Cahir district, namely, Garda Jenny Gough and Garda Noel Glavin. It is the same in Clonmel, and all over County Tipperary. It is a pity that in respect of visibility alone, all those cars are being taken back and these community policing units are again under pressure. We need them in the community. It is not possible for An Garda Síochána or any police force in the world to operate and combat crime, whether involving counterfeiting or violence against men or women or anything else, without the support of the public. That has been learned the world over. We need the support of the public and community gardaí are what we need to get that support. I refer to the old style of policing, involving going into people's houses, where people have the information, and supporting them. It is the old style of policing and it will come back in spadefuls.
It is very easy now for scammers with card payment and transactions, especially with those cards that can be just swiped and do not require a personal identification number. There are great opportunities for fraud in this area, and we must be able to deal with this type of activity. Small businesses are wide open to being plundered. Goodness knows, they are troubled enough and under enough pressure now without having all this technical fraud. We, therefore, need the CAB to be reinforced and all the units of An Garda Síochána to be able to deal with that type of crime. All gardaí must be re-educated in respect of this area as well, like people in any walk of life, my own included. We learn something every day, and it is a bad day when we do not learn something new.
These criminals not only can be ahead of us, but they normally are. They are international, and we saw actions in the regard yesterday in different countries against Irish criminals. These are widespread cartels, with expansive and expensive networks, and it is important that we reinforce this legislation. My question remains about why we are four years late with this, and how much more legislation is lined up. We had one Bill, I think it was last week, for which we were fined in this regard. Why are we so slow? We must also be ever careful that we also do not diminish our sovereignty. It is time that we wore two hats, I suppose. I refer to having the benefits of European membership, and it is important that they can nod us along to bring in this legislation. We should also, however, bring forward our own legislation to deal with these kinds of issues. It should be introduced, debated and legally scrutinised here and put in place.
Counterfeiting refers to something capable of "passing for a currency, note or coin of that description, or if it is a currency, note or coin which has been so altered that it is [...] capable of passing for a note or coin of some other description". That is a long way around of saying a fraudulent copy. Ireland is the last country to transpose this 2014 directive on the protection of the euro and other currencies against counterfeiting.
The main planks of the directive call on member states to introduce criminal offences and sanctions concerning counterfeiting of the euro and other currencies. The directive also addresses territorial jurisdiction and calls for special investigation powers and measures. Transposing this directive into law will conjoin Ireland with protecting against counterfeiting to ensure continued confidence and trust in the euro currency. Without an integral value, supported and controlled by international law, nobody could have confidence in dealing in the euro, thereby threatening the financial stability of the EU.
Financial probity, integrity and resilience is the bedrock of a currency, and this can only be ensured by adequate, co-ordinated laws to protect against currency counterfeiting. The Bill is set to provide for a range of new powers and functions for the Central Bank of Ireland regarding monitoring and enforcement measures relating to suspect counterfeit euro currency, and in respect of currency not deemed suitable for recirculation. Included in this legislation is a designation of the currency centre of the Central Bank of Ireland as a national analysis centre for euro notes and coin, and the national analysis centre for coin for euro as well. The legislation provides for offences committed by a body corporate, or which are attributable to a person who is a director, manager, secretary or other officer of the body corporate, such that a person as well as the body corporate may be found guilty of an offence.
Counterfeiting has long been a lucrative trade and is often perceived as a victimless crime, unless, of course, one happens to be the person receiving the counterfeit moneys as payment. Since 2002, organised crime groups active in counterfeiting of the euro have caused financial damage worth at least €500 million. Without robust laws and oversight this figure will be far higher, causing not only debt but also having the potential to erode market sentiment in trading euro-denominated holdings. It is in the interests of the Union as a whole to oppose and pursue any activity likely to jeopardise the authenticity of the euro currency by counterfeiting.
The national analysis centre will examine suspect counterfeit bank notes and coins that are sent to the Central Bank.
It has a duty to examine, record and monitor suspect counterfeits as part of a strategic defence to counterfeit activity. The national analysis centre is also tasked with providing training on counterfeit detection to professional cash handlers, members of An Garda Síochána, customs officials and other bodies. The courts must also recognise the loss that can occur as a result of counterfeiting as well as the overall system vulnerability to large and wide-scale counterfeiting, which could have a macroeconomic effect for Ireland and for other member states. As such, significant criminal sentencing must apply to those who actively collaborate to support counterfeiting.
Euro banknotes have been undergoing a series of security improvements in recent years. The more recent Europa series provides for more sophisticated security measures aimed at ensuring the security of the currency. A range of print and security features is being rolled out to improve the identification of approved euro notes and confound possible copying. The ECB also provides training material to complement cash handlers training in the form of an e-learning course covering the characteristics, authenticity and fitness of banknotes. Despite these improvements, the eurozone reports for the second half of 2019 note that 308,000 counterfeit euro banknotes were withdrawn from circulation in the second half of 2019. This represents a 22% increase when compared with the first half of 2019, and a 17% increase on the second half of 2018. Of these counterfeit notes, 96% were found in other euro area countries. This demonstrates the need for vigilance, training systems and detection devices for businesses in Ireland which handle predominantly cash payments.
Ireland has come a long way in how we do business and deal with money transactions. Cash payments are becoming less commonplace as we appear to be moving towards an almost cashless society. Nonetheless, we need to know that our currency is solid and secure. The proposed changes called for by ratifying this directive will keep us in lockstep with our European partners in protecting our common currency and providing protection to our consumers. Given that we have prevaricated on this issue and that there is an undertanding now, most forcefully as a result of Covid, that Berlin is definitely closer than Boston, I propose that the House move appropriate legislation to meet the requirements of this directive and resulting legislation at the earliest opportunity.
As I address the issue of protecting the euro in this debate on the Counterfeiting Bill 2020, there is no doubt as to its importance in protecting businesses from interference by the production of counterfeit money in whatever currency, euro or otherwise. By passing the Bill, we will give effect to implementation of the EU directives as required by EU member states, with Ireland being the last to do so.
It is, without doubt, a necessity to safeguard the euro from the threat of counterfeit notes. Protecting the euro currency, however, does not begin and end with counterfeit production. Unfair competition or unfair trade practices for businesses that damage trade within the EU also damage the euro. I emphasise that it is necessary to state the equal importance of other factors, such as unfair competition and trade practices. These can have a monumental effect on any country and are capable of causing at least as much damage, if not far greater damage, as that caused by counterfeiting of currency.
Since 1 January, Ireland has suffered as a result of Brexit and the reintroduction of EU regulations as the transition period ended and the UK finally and fully exited the EU. The EU discussed for over four years a path to allow as near as possible a seamless transition for trade to continue from 1 January 2021. Ireland's fate was in the hands of Michel Barnier’s negotiating team. Our fishermen lost upwards of 15% of their fishing quotas and we are learning daily of the other detrimental effects as we see trade slow to 1990 levels and State agencies in constant denial that there are problems. Tell me this is not affecting the euro. Anything that damages a member state damages the whole Union. A diminution in trade will weaken the euro as much as counterfeiting, if not more.
We laud the fact that we have received €1 billion from the EU as a consolation prize for the onslaught of the Brexit negotiations. It is incredible that while Ireland took on billions of euro in debt ten years ago to save the euro, we now get €1 billion which is expected to compensate for the fact that Ireland and its peace process was the stick used to beat the UK, ensuring that the United States would row in and bat not just for Ireland but for the EU. The long awaited peace process was agreed in 1998. The political leaders of the day, David Trimble and John Hume, may he rest in peace, jointly received the Noble Peace Prize for their efforts and they will go down in history for bringing peace to this island. The Good Friday Agreement is revered worldwide as a template to conduct peace processes and bring war-torn countries to the table, resulting in the general population of many of these countries being able to live with their differences respectfully and, most important, peacefully.
The whole world understands the importance of dialogue. World leaders do not make brash statements or take rash actions without fully understanding the consequences. When they do, however, their decisions should not go unchallenged. In an interview last week inThe Irish Times, Naomi O’Leary asked Commission President, Ursula von der Leyen, the following question:
Now that the European Commission has shown itself willing to use article 16, seemingly quite casually, we expect opponents of the protocol to redouble their calls for the British government to override it and for this to continue for years to come whenever a problem arises. Do you understand the scale of the damage that has been done?
In reply, President von der Leyen said:
Of course, I am fully aware of the sensitivity related to the protocol on Ireland and Northern Ireland. I fought for this protocol and its implementation over the past year, and am determined to ensure it is upheld. Our sole aim in designing the export transparency and authorisation scheme is to achieve transparency on shipments of vaccines abroad, so as to make sure that this is not done to the detriment of expected deliveries in the EU.
Ursula von der Leyen's answer clearly shows that she has no understanding whatsoever of the consequences of her actions and the detrimental effect they have had on Ireland. The consideration here is not the supply of the vaccine, nor is it the year she spent fighting hard for the protocol, as she put it. It is that her unilateral decision, without consultation with the Irish Government, has put Ireland in a dire position. Less than six weeks into the life-changing process called Brexit, the President of the European Commission made a monumental mistake. As a member of the EU, this also reflects badly on us and we were not even involved in the decision process. It has set us back 20 years. It reminds us of the position adopted by the European Central Bank in 2008 when the then Governor of the ECB, Jean-Claude Trichet, forced the Irish State to guarantee the obligations of the Irish banks without any regard for the consequences. The consequences of that policy caused our State severe hardship, austerity and unemployment. We may have saved the euro but Ireland owes billions as a result.
This utter and disgraceful mess has gone without even a question being raised about the capability of Ursula von der Leyen. Have we nothing to say on behalf of Irish citizens? We had a strong fighter in Ireland's corner. An ill-judged attendance at a dinner sealed his fate. That decision, which was to Ireland's detriment, was made by those now responsible for the disastrous situation we have been plunged into.
The relevance is that we need measures other than anti-counterfeiting measures to protect the currency. I have not departed from the subject matter much, if the Acting Chairman does not mind.
The people of this country have paid a heavy and enduring price for the Government's mistakes. I can hear the story of the elephant and the fly ringing in my ears. Those who put one in the dung are not always one's enemy and those who take one out of it are not always one's friend.
While I will support the Bill, I want the Government to enact legislation to ensure we deal effectively with criminals who produce counterfeit currencies and to recognise the damage it causes. However, I do not want that nearly as much as I want it to deal with those who seem to think they are not responsible for recreating ill feelings that Ireland as a nation took 20 years to suppress. They may attribute this to safeguarding the EU’s share of the vaccine but long after the Covid vaccine has been rolled out, we will live with the effects of the EU’s mindless action of invoking Article 16, just as we live with the so-called bailout, generation after generation.
We hear daily from the Government that we have teething problems with regard to Brexit and that it is confident these will be resolved.
On many occasions I have rebuffed its confidence. It has been misinformed by those responsible for the incompetence of delivering seamless operations from customs, the Department of Agriculture, Food and the Marine and others. Instead the Government's failure to listen attentively to those who are experiencing trade devastation daily means that it takes no action except to say that Brexit is not of its making. This inaction will have a far more devastating effect than any counterfeit currency could have on this country.
I can only hope that the Government took note of the unfortunate announcement by Wilker Auto Conversions in County Offaly that it must lay off 80 of its 100 staff. In simple maths 80% of the workforce has been laid off. This scenario will be replicated tenfold. That is not me wishing to scaremonger. That is the reality which is being masked by the fact that the Government has the country in level 5 lockdown. The construction sector is not purchasing supplies nor are the many businesses regarded as non-essential. When Government decides it will open up the country for people to return to work, we will then see the true levels of the inaction and all that remains is what are whom it will blame. The "B" word for bailout and the accompanying loss of economic independence, just as the "V" word may well see the loss of peace on the island, but the "I" word for inaction is the most detrimental of all. Every one of us on the island deserves better.
The Bill is a good move, but we must not lose the plums in the duff by neglecting matters in need of urgent attention. We need mechanisms that safeguard our economy from damaging impulsive decisions such as those taken by powerful EU figures, such as Ursula von der Leyen and Jean Claude Trichet.
I support the Bill which updates Irish law to reflect four pieces of EU legislation in the area of counterfeiting. These changes will give the requisite powers and functions for the Central Bank of Ireland to monitor and enforce measures related to suspected counterfeit euro currency. As the effective branch of the European Central Bank here the Central Bank of Ireland requires the power to check euro notes and coins we all use without thinking. The crime of counterfeiting money is as old as money itself. For as long as people have been using negotiable instruments other people have been attempting to create fraudulent versions of them. There has been a significant increase in the volume of counterfeit money due to the enhancement of technology graphics, software and high-quality low-cost colour printers, meaning that even an amateur can produce possible counterfeit notes easily through unprotected transaction points that are not equipped to detect them.
No business owner wants to absorb the loss due to counterfeit money. Such losses if occurring on a regular basis can lead to an increase in prices for consumers. Having counterfeit money in circulation is harmful to the economy and undermines the credibility of our currency, the euro, which has national and international effects. The focus of the directive is the creation of criminal offences of making, uttering or importing counterfeit currency, and possessing instruments and security features for making counterfeits. Such action requires co-operation between national authorities in the European Union, the Commission and the European Central Bank.
Thankfully, the number of counterfeits detected as a percentage of the genuine bank notes in circulation is at a very low level. However, 308,000 counterfeit euro bank notes were withdrawn from circulation in the second half of 2019. That represents an increase of 22.7% when compared with the first half of 2019 and is 17.6% more than the second half of 2018, indicating that it is a very serious issue. Therefore, continual updating of the legislation is required to ensure that the integrity of the euro as a means of exchange and as a store of wealth is protected.
We are also living in an era where currency is modernising with the potential inclusion of digital currency becoming more mainstream. As the Minister of State is aware there has been a large increase in digital transactions since the onset of Covid-19 to stop the spread of the virus and protect our essential workers through the reduction of the use of cash. In recent times the European Central Bank has investigated the use of a digital currency. Digitalisation has spread to every corner of our lives and transformed how we pay for our goods and services. In this new era, it is critical that we guarantee that citizens in the euro area can maintain costless access to a simple universally accepted safe and trusted means of payment.
In recent times we have seen the advent of cryptocurrencies and volatility in their value. We must ensure that a digital currency, when it becomes available, does not have that level of volatility. We must also ensure that digital currencies have the necessary safeguards in place to prevent counterfeit technology. Cryptocurrencies fluctuate in value due to their decentralised nature but are less likely to get hacked as a consequence. A centralised ledger used by digital currency would be more prone to cyber attack due to its single point use. Therefore heightened cybersecurity would be required to ensure that such digital currencies would be protected. This is the future and we must stay one step ahead of it.
The counterfeiting of cash does not hurt those involved in organised crime and big business. It is always the smaller people who get hit hard, including local businesses in our towns and villages. It could be independent bookmakers, for example. There are multiple examples of individuals who are at risk because of this. Based on my research having spoken to people and business owners in my community, this legislation is timely and needs to be enacted. We need to be more proactive and progressive in how we deal with the ever-changing money landscape. Obviously, the advent of cryptocurrencies will bring enormous pressures on the regulating authorities that have responsibility in these areas. We in Ireland need to start to get our act together.
I thank the Deputies for their contributions. This is an important Bill while it is technical in nature. There are 25 billion euro banknotes in circulation throughout the European Union, with a value of more than €1.4 trillion. As I stated earlier, the chances of a note being counterfeited in 2020 was only 17 in 1 million. Most counterfeit bank notes are very low quality and thankfully quickly detected. Much of this is down to the new security measures in current bank notes. Nevertheless, we must keep vigilant. We need to stay strong on these issues and that is why we are introducing this legislation to ensure harmonisation across the European Union in tackling these very serious issues.
Deputy Catherine Murphy spoke about targeting messages to vulnerable people who may be targeted by criminals involved in counterfeiting or money laundering and I agree with her on that. Some young people are being taken advantage of with devastating consequences resulting in them being prosecuted for being money mules or for other such activities.
Deputy Durkan spoke about a review of EU legislation. I can assure the Deputy that has already occurred; it happened as soon as I became a Minister of State in the Department of Justice.
A number of other Deputies spoke about delays that have happened and I acknowledge that is the case. I thank the officials in the Department of Justice who have supported me since I became Minister of State. I am determined to get any backlog on the transposition of EU legislation through the Dáil and Seanad as quickly as possible. To that end the Criminal Justice (Mutual Recognition of Decisions on Supervision Measures) Act, enacted in November, was brought through both Houses in a matter of months. We completed all Dáil stages of the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Bill, which is currently on Report Stage in the Seanad. We have completed all Seanad stages and the Dáil Second Stage in the transposition of the protection of the Union's financial interests, PIF, directive and we expect to enact that in the coming weeks.
We have also published and progressed the Bill before the house today. Two particularly important bills are on the priority list due for publication by Easter on prisoner transfers and people-smuggling. There is a standing note with the Whip's office that I am prepared to come into the Dáil or Seanad to move legislation at short notice to get it through as quickly as possible and have it enacted so that we can no longer be accused of being a laggard. There has been substantial work in clearing the backlog and I am confident that we can clear the rest of the backlog as quickly as possible. Limited time in the Dáil and Seanad is the only thing holding us back.
This Bill specifically relates to the counterfeiting of hard cash, both notes and coins. It does not relate to online money laundering. However, measures on cybersecurity, fraud, anti-money laundering and terrorist financing are being dealt with in other legislation we are introducing.
The Minister, Deputy McEntee, and I and the Department of Justice are implementing new anti-fraud and anti-corruption structures, informed by the work of the review group of the Hamilton report. That is a programme for Government commitment and recommendations contained in it will be implemented. There will be an action plan, which will be coupled with timelines. We are being very proactive in tackling online crime.
Deputy Ó Murchú referred to the National Cyber Security Centre. Technically that comes under the aegis of the Minister for the Environment, Climate and Communications, Deputy Eamon Ryan. However, cybersecurity is also of great importance to the Department of Justice and all Departments work with the Minister, Deputy Eamon Ryan, on the National Cyber Security Centre.
Deputy Ó Murchú also mentioned the issue of youth justice. This is a hugely important matter for me as a Minister of State, as many parts of youth justice come under my remit. We will launch the youth justice strategy in the next few weeks. It has been a number of years in the making and many stakeholders have had input into it. It will expand the youth justice services that are there at the moment for young people who come into contact with the justice system, as well as those who are very hard to reach. We will be trying to achieve early intervention and identify indicators of people who may come into touch with the youth justice system in order that we can intervene at an earlier point to help them. Ten or 12 years ago, around 20,000 young people per year came into contact with the justice system and that is now down to about 10,000. As Deputy Ó Murchú pointed out, there are about 1,000 really hard-to-reach young people who are consistently committing crimes and we need to intervene with them.
The Greentown project that was mentioned did a massive piece of research over five years, identifying how young people are being groomed and brought into the criminal system either by gangs, community groups or family members. It also examined how we can target those areas to disrupt the criminal activity, support families and the community and provide alternative pro-social activities for those young people. We must not only stop them committing crimes but find alternative positive things in which they can get involved. The Greentown project is massively important through that research and a number of pilot projects have now started. I am not at liberty to say where they are being carried out for sensitive reasons but they have commenced and will set out a template. Only yesterday I met representatives of the Solas Project, which is doing fantastic work in south-west Dublin by working with hard-to-reach younger people who have not only been involved with the justice system but perhaps have been imprisoned. It has a policy of never giving up and has had massive success in turning young people away from criminal activity.
I had a conversation with the Minister for Further and Higher Education, Research, Innovation and Science, Deputy Harris, about how we can find pathways for young people who may be in touch with the criminal justice system but who are also early school leavers. Apprenticeships could potentially play a huge role for those young people but because they do not have their junior certificate qualification in maths, they cannot take up an apprenticeship, so alternatives will be looked at in that regard. When people turn their life away from crime and become positive members of society, they should be supported to continue on that path as much as possible.
We also have the antisocial behaviour forum, which held a high level meeting yesterday on trying to find alternative activities for young people to get them away from crime. In particular we spoke about scramblers and quad bikes, which is an area in which the Acting Chairman, Deputy Lahart, is very interested. We must find alternative pathways for those young people either to get away from antisocial behaviour using quad bikes or scramblers or alternatively, as has happened in Moyross in Limerick, to find a productive way to use their scramblers in a safe manner within the communities.
Deputy Catherine Murphy raised the issue of regulatory impact assessments. These are always being carried out and if I have any further information I will give it to her.
I thank the Garda National Economic Crime Bureau for its continued work in challenging counterfeiting and in particular the payment card counterfeit currency unit, PCCCU, which is very much focused on tackling this type of money fraud and counterfeiting crime. It is doing much good work behind the scenes on this issue.
I thank the Deputies for their contributions. There will be a further opportunity to discuss many of these issues on Committee Stage. There have been significant delays in much of this type of legislation but I assure all Deputies that this will no longer be the case.