Ivor Callely (Dublin North Central, Fianna Fail)

I am pleased to have the opportunity to speak in the House. I was with some Senators last night who are, should I say, of the right political persuasion or socialist persuasion and we had an enjoyable night. Some of the females ditched me but I managed to get home safely in any case.

I am pleased to present to the House the Proceeds of Crime (Amendment) Bill 1999 on behalf of the Minister for Justice, Equality and Law Reform. Regrettably, the Minister is unable to be present due to other business and has asked me to convey his apologies to the House for his absence. The original purpose of the Bill, which was published in 1999, was to make some technical amendments to the Proceeds of Crime Act 1996, based on the experience of the operation of the Act since 1996. The Second Stage of the Bill was taken in the Dáil in June 2000, but further progress was delayed pending the outcome of a number of court challenges to the Act at that time. The Bill fell with the last Dáil and was restored to the Order Paper in July 2002.

However, following the publication of the second interim report of the Flood tribunal in September of that year, it was decided to provide additional powers to bolster the work of the Criminal Assets Bureau in pursuing the proceeds of all forms of crime, including corruption. To this end, a substantial number of additional proposals were drawn up for inclusion in the Bill which were moved by way of amendments to the Bill on Committee Stage in the Dáil.

In its amended format as passed by Dáil Éireann, the Bill is now divided into five parts. Part 1 contains standard provisions. Part 2 deals with amendments to the Proceeds of Crime Act 1996 while Parts 3, 4 and 5 deal with amendments to the Criminal Assets Bureau Act 1996, the Criminal Justice Act 1994 and the Prevention of Corruption (Amendment) Act 2001, respectively. I propose to deal with the main proposals in the Bill, including those changes which have been made in the other House.

Sections 1 and 2 of Part 1 contain the preliminary and general interpretative provisions. Part 2 comprises nine sections and contains the amendments to the Proceeds of Crime Act 1996. Section 3 substitutes new definitions in that Act for "applicant", "proceeds of crime", "property" and "respondent". The new definition of "applicant" is a broader definition which will give the Criminal Assets Bureau the flexibility to take proceedings in its own name in addition to taking proceedings, as is already the case, in the name of a member or authorised officer of the bureau.

The new definition of "proceeds of crime" replaces the reference to "the commission of an offence" in the existing definition, with the words "criminal conduct" and a definition of "criminal conduct" is included in the section similar to that used in section 21(7) of the Criminal Justice (Theft and Fraud Offences) Act 2001 in respect of the offence of "money laundering". This change means that it will not be necessary for the CAB to show that the criminal conduct was a particular kind of criminality if it is shown that the property was obtained through conduct of one of a number of kinds, each of which would be an offence. In addition, the extra territorial references are included in the definition of "criminal conduct" to link into the definition of "property" which can include property outside the jurisdiction.

The new definition also takes account of the recent Supreme Court decision of 17 May 2004 in the case of McK. v. D. which found that the Proceeds of Crime Act 1996 did not apply to foreign criminality. The definition of "criminal conduct" ensures that foreign criminality is now covered by the scope of the legislation where there are proceeds of that criminality within the State. As I have stated, the definition of "property" has been amended to provide for inclusion of a reference to property which is situated outside the State but where there are specific links to this jurisdiction, namely, that the respondent is domiciled, resident or present in the State and all or any part of the criminal conduct takes place within the State.

The definition of "respondent" has also been amended to include a reference to wherever the person is domiciled, resident or present to reflect the fact that in some instances the service of proceedings may be out of the jurisdiction. An additional change provides that not only may the respondent be the subject of proceedings but also a person who, but for the Act, would become entitled to inherit the property of the respondent if he or she died. In addition to the changes in definitions already in the Proceeds of Crime Act 1996, new definitions are included for "consent disposal order" and "criminal conduct". The consent disposal order is a new provision which I will describe when I come to section 7. As I stated, a definition of criminal conduct is included.

The combined changes relating to the definitions of "proceeds of crime", "property", "criminal conduct" and "respondent" will mean that the proceeds of crime legislation will apply in five specific scenarios as follows: where the respondent and the property are in the State and the criminal conduct occurs within the State; where the respondent is situated outside the State but the property is located in the State and the criminal conduct occurs within the State; where the criminal conduct occurred outside the State but the respondent and the property are situated within the State, provided that the conduct constituting the offence is also an offence in the foreign jurisdiction; where the respondent is situated within the State and the criminal conduct occurred within the State but the property is located outside the State; and where the property is located within the State, the respondent is situated outside the State and the criminal conduct occurred outside the State, provided that the conduct constituting the offence is also an offence in the foreign jurisdiction.

Section 3 also inserts a new section 1A into the 1996 Act, the purpose of which is to make it clear that a person remains in possession of property even where the property, after seizure, is in the lawful possession of the Garda or the Revenue Commissioners or is subject to an interim or interlocutory order or any other order of the court or is subject to a letting agreement.

Section 4 is largely similar to section 3, as published. The first change, contained in subsection (a), is a technical amendment consequent to the amendment already made in section 2(a), which provides for applications to court to be made in the name of the Criminal Assets Bureau. The second change makes provision for an interim order made under section 2 of the principal Act to be varied so that income tax or other sums owing on foot of court orders may be recovered. At present, an interim order may only be varied on the application of the person against whom the order is made or by another person who claims to own part or all of the property. This additional subsection provides that the applicant, namely a person who is a member or an authorised officer of the CAB or the Criminal Assets Bureau itself, or any other person may apply for a variation of an interim order for certain purposes. The purposes for which a court may vary any of the terms of an interim order are set out in subsections (a), (b) and (c) of the new subsection 3A and include where the respondent owes a sum under a court order, recovery of any sum owed in income tax and to permit proceedings to be taken for the recovery of any other sum owed by the respondent. This new provision will enable other specified claims on the property to be met from the frozen assets and will facilitate further the tracing of other properties without cost to the Exchequer.

The third change brought about by this section deals with giving notice of an application for an interim order under section 2 of the principal Act and follows on from subsection 3A, which enables the applicant or other person making the application to seek a variation of an interim order. The section also provides in paragraph (d) that a section 2 application is to be made by way of originating motion. Similar amendments are included in sections 5 and 6 with regard to section 3 interlocutory orders and section 4 disposal orders. The purpose of providing for applications by way of originating motion is to ensure a procedure by way of motion grounded on affidavit. As a result, defendants will be obliged to respond to proceedings on affidavit and so avoid the need for particulars and discovery at an early stage in the process. The court will still be able to order particulars and discovery and fuller pleadings when necessary. The effect will be to have the matter in a court list at the earliest opportunity with the full case of both parties set out in a formal manner.

Section 5 is substantially the same as section 4, as published. In subsection (a), it reflects the changes in section 3(a) to allow an action to be taken in the name of the Criminal Assets Bureau. It also introduces a permissive element to the decision making process of the court, by providing that the evidence tendered to it may now consist of or include evidence admissible by virtue of section 8, whereas previously the evidence tendered to it was required to consist of or include such evidence. The effect of the latter change is to provide the court with more flexibility with regard to the matters it may take into consideration in reaching its decision as to whether to make an interlocutory order. The new subsection (b) inserts a new subsection 1A into the principal Act to provide for a consent disposal order to be taken contemporaneously with a section 3 interlocutory order if all the parties are in agreement.

Subsection (c) of section 5 inserts an additional subsection 3A into section 3 of the principal Act. This additional subsection provides that a court may vary the terms of an interlocutory order following an application to it by the applicant or any other person for the same reasons for which it may vary an interim order, that is, to permit enforcement of any court order for payment of any sum, including an order as to costs; recovery of income tax due as well as any fees or expenses arising under section 962 of the Taxes Consolidation Act 1997; and proceedings to be taken for the recovery of any other sum owed by the respondent.

Subsection (d) of section 5 substitutes a new wording for section 3(6)(a) of the principal Act, providing that notice of an application under the section be served by the applicant or other person making the application on the respondent unless the court is satisfied that it is not reasonably possible to discover his or her whereabouts.

Section 6 contains the provision to which I have already referred to allow for an application for a disposal order to be made by way of originating motion.

Section 7 is a new provision for a consent disposal order which was included on Committee Stage. Section 4 of the Proceeds of Crime Act 1996 already provides that where property has been the subject of an interlocutory order for a period of seven years, an application may be made to the High Court by the Criminal Assets Bureau for a disposal order, whereby the property is transferred to the Minister for Finance. This amendment introduces the concept of a "consent disposal order" which will allow for that period of seven years to be reduced on application to the court with the consent of all the parties concerned. However, it contains a protection by providing that the court must not make such an order unless it is satisfied that no serious risk of injustice arises. This provision was sought by the Criminal Assets Bureau based on its experiences to date. It has pointed out that, in some instances, the individuals concerned want to see final closure on the proceedings and do not wish to wait for the seven year period to elapse. The consent disposal order procedure will allow this to happen.

Section 8 amends section 6(1)(a) of the principal Act. At present, a respondent whose property is frozen under an interim or interlocutory order may apply to the court for an order which will enable that person to discharge reasonable living and other necessary expenses. This section will extend that facility to any person who may be affected by either an interim or interlocutory order under the principal Act. For example, it will enable a spouse or dependent of the respondent to make an application to the court in his or her own right for access to the frozen property.

Section 9 amends section 8 of the principal Act in two ways. At present, section 8 of the 1996 Act provides that evidence of belief of the applicant that property is the proceeds of crime must be given in the case of an application for an interim order under section 2, either on affidavit or if the court so directs in oral evidence and, in the case of an application under section 3 for an interlocutory order, in oral evidence only. Under this new provision, such evidence at the interlocutory stage may be given on affidavit or, where the respondent requires the deponent to attend for the purpose of cross-examination or where the court so directs, the evidence must be given orally.

This measure will enable the resources of the Criminal Assets Bureau to be used more efficiently, while, at the same time, safeguarding the court's role and the rights of the respondent. In the second change, a new subsection (6) is being added to section 8 of the 1996 Act. This new subsection is a consequential amendment arising from the earlier proposal which permits the Criminal Assets Bureau, as a corporate identity, to apply for orders under the principal Act under its own name. It provides for a rebuttal of a statutory presumption that a document purporting to have been issued by the Criminal Assets Bureau and signed on its behalf shall be deemed to be such a document and so signed.

Section 10 is included because of confusion which has arisen in the past where proceeds of crime applications for interlocutory orders pursuant to section 3 of the 1996 Act were challenged on the basis, incorrectly, that they are actions for forfeiture so as to benefit from the two year limitation period provided by section 11(7) of the Statute of Limitations 1957. This amendment confirms the decision of the Supreme Court of 17 May 2004 in McK. v. D., where the court upheld two earlier decisions of the High Court to the effect that section 11(7) of the Statute of Limitations 1957 does not apply at any stage to proceedings under the 1996 Act. Section 11 amends section 9 of the 1996 Act to make it clear that an affidavit of property or income which the court may direct a respondent to file is not generally admissible in evidence in any criminal proceedings against the respondent or his or her spouse.

Part 3 comprises 6 sections which amend the Criminal Assets Bureau Act 1996. Section 12 reflects the earlier change to the definition of "criminal conduct" contained in the Proceeds of Crime Act 1996 and provides for consistency between the definition in that Act and the Criminal Assets Bureau Act 1996. The definition of "place" is included with particular reference to the search warrant provisions of the legislation to clarify that the scope of application of such warrants may include a dwelling in addition to any other place.

Sections 13, 14 and 15 replace references to "criminal activity" with "criminal conduct" in those sections of the Criminal Assets Bureau Act, where they occur, and provide consistency with the corresponding new proposals for the Proceeds of Crime Act. Section 5(1) of the 1996 Act provides, as one of the functions of the Criminal Assets Bureau, "for co-operation with any police force, or any authority, being a tax authority or social security authority of a territory or state other than the State." However, civil forfeiture asset recovery agencies like the one recently established in the UK do not come within these categories and hence the need to include in the area of co-operation an authority with functions related to the recovery of proceeds of crime. Section 14(b) provides accordingly.

Section 15 amends the section 14 search warrant provision of the Criminal Assets Bureau Act 1996 in many ways. It provides for the period of the search warrant to be for one week from the date of issuing of the warrant unless a judge orders otherwise, but in any event the period of the warrant shall be no longer than 14 days. This upper time limit on the warrant was included following concerns expressed in the Dáil by several Opposition Deputies. Section 15(b)(ii) makes it clear that the material that can be seized cannot include material subject to legal privilege. Section 15(e) provides that the authority to search also includes authority to make and retain a copy of documents or records and, if necessary, the seizure and retention of computers or other storage medium on which a record may be kept. Section 15(f) inserts a new subsection (6A) modelled on the provisions of section 48 of the Criminal Justice (Theft and Fraud Offences) Act 2001. It provides, in the context of a search warrant, for a bureau officer who is a member of the Garda Síochána to take certain specified actions in the case of computer searches.

Section 16 contains a provision to increase the maximum amount of fines on summary conviction for offences under the Criminal Assets Bureau Act 1996 from €1,500 to €3,000. Section 17 creates three new sections, 14A, 14B and 14C, in the Criminal Assets Bureau Act 1996. The new section 14A provides for production orders to make material available for Proceeds of Crime Act purposes. This new provision is modelled on section 63 of the Criminal Justice Act 1994. It allows a bureau officer who is a member of the Garda Síochána to apply to the court for an order to make material available for the purposes of an investigation into whether a person has benefited from, is in receipt of, or controls proceeds of crime. It outlines the conditions attaching to this order and deals with the operation of these orders and also includes provision for criminal sanctions for non-compliance with the order.

The new section 14B provides for an offence of disclosure prejudicial to making available of material under the new section 14A, more commonly referred to as a "tipping off" offence. This new provision is modelled on the offence of prejudicing an investigation contained in section 58 of the Criminal Justice Act 1994.

The new section 14C provides for application to the court for disclosure of the identity of persons for whom property is held in trust. This new provision will enable the chief bureau officer or an authorised officer of the Revenue Commissioners to apply to the High Court to establish the identity of trustees or persons for whom property is held in trust where there is an investigation into whether a person is in receipt of, or controls, or has benefited from, the proceeds of crime.

Part 4 comprises 4 sections which amend the Criminal Justice Act 1994. Section 19 amends the seizure and detention of cash provision contained in section 38 of Criminal Justice Act 1994. The new subsection (1) of section 38 gives the Garda and officers of Customs and Excise a power of search where there are reasonable grounds to suspect that a person may be involved in importing or exporting an amount of cash not less than the prescribed amount of €6,500 and which either directly or indirectly represents the proceeds of crime or is intended for use in connection with criminal conduct.

The new subsection 1(A) broadens the power of seizure in section 38 of such cash to officers of the Revenue Commissioners instead of officers of Customs and Excise, as at present, and allows for seizure of cash which is suspected directly or indirectly to represent proceeds of any criminal conduct, and not just drug trafficking, as at present. In addition, the amended seizure power will now apply to cash anywhere in the State and not just to money "being imported into or exported from the State." A new subsection (3A) inserted after subsection (3) of section 38 of the 1994 Act provides that where an application under section 39 of the 1994 Act has been made to the Circuit Court for forfeiture, then the provisions of section 38(3) relating to a three month time limit shall not apply.

Its effect is to avoid the need for returning to the District Court every three months to renew a seizure order under section 38 in a situation where the Circuit Court has taken seisin of proceedings to deal with an application for forfeiture of cash seized under section 39. In other words, the cash can be retained without the need for orders to be made in the District Court at three monthly intervals pending a final determination of the application for forfeiture in the Circuit Court.

Section 20 amends the provision contained in section 39 of the Criminal Justice Act 1994 relating to forfeiture of seized cash and is a consequential amendment to take account of the fact that section 38 has been amended to refer to cash which is suspected directly or indirectly to represent proceeds of any criminal conduct, and not, as previously, just drug trafficking.

Section 21 amends section 43 of the Criminal Justice Act 1994 by providing for new definitions of "cash", "criminal conduct" and "proceeds of crime". The new definition of "cash" widens the existing definition by including notes and coins in any currency, postal orders, cheques, bank drafts, bearer bonds and bearer shares. The definition of "criminal conduct" is the same as that proposed for the Proceeds of Crime Act 1996, while the inclusion of the "proceeds of crime" definition ensures compatibility with the definition in the Proceeds of Crime Act 1996.

Part 5 comprises just one section — section 22 — which inserts new sections 2A, 2B and 2C into the Prevention of Corruption (Amendment) Act 2001. The new section 2A provides for seizure of a gift or consideration which is suspected to be a gift or consideration within the meaning of section 1 of that Act. It is modelled on section 38 of the Criminal Justice Act 1994 and will mean that a suspected bribe, as an instrumentality of crime, will be automatically capable of seizure. The new section 2B provides for forfeiture by the court of the gift or consideration which has been seized and detained under the previous provision. The provision is modelled on the forfeiture of cash provision in section 39 of the Criminal Justice Act 1994. The court may make an order, regardless of whether proceedings have been brought against a person for an offence with which the gift or consideration is connected, and the standard of proof for proceedings for forfeiture is that applicable to civil proceedings.

The new section 2C applies the provisions of section 40 regarding appeal, section 41 on interest, section 42 on procedure and section 45 on disposal, which change the seizure and forfeiture provisions of cash contained in Part VI of the Criminal Justice Act 1994 to the new seizure and forfeiture provisions in these amendments.

There are two possible additional proposals for inclusion in this Bill on which work has been continuing. An outline was given by the Minister for Justice, Equality and Law Reform on Committee Stage in the Dáil of a possible provision for an in personam action which would constitute a statutory tort of unjust enrichment. Its purpose would be to deal with the situation where someone, by means of some corrupt act, is able to benefit from the enhancement of value of property legally acquired, arising from the corrupt act. The example was given of a person who bribes a council official to allow him or her to build 60 rather than 50 houses on an estate. The mechanism that is being considered would provide for a procedure to go after the additional profit generated by the bribe.

As outlined on Report Stage in the Dáil, a draft head of such a provision has been drawn up. It is currently being scrutinised by senior counsel from both a constitutional and technical point of view and those views are expected shortly by the Attorney General. Senators will appreciate that any such provision must be able to stand up to the most rigorous scrutiny. Subject to the advice of the Attorney General, it is intended to move an appropriate amendment on Committee Stage in this House.

The other provision being considered for possible inclusion as an amendment on Committee Stage in this House relates to hearsay evidence following the decision of the Supreme Court in the Hunt case, CAB v. Hunt, 28 February 2003, 173 and 174 / 01. In that case, the court took the view that the reference at the end of section 8(5) of the Criminal Assets Bureau Act 1996 to information, documents and other material obtained by CAB officers under the subsection being admissible in subsequent proceedings, did not bypass the rules of evidence but merely allowed such documents to be admitted in accordance with the usual rules of proof, notwithstanding their origin. The Criminal Assets Bureau has expressed concerns about the added administrative burden in providing large volumes of administrative records arising from that decision and a possible amendment is therefore being examined. If feasible, the intention would be for this to be done by way of an amendment to the Criminal Assets Bureau Act 1996, so that any proposal would be restricted to proceeds of crime cases under the remit of the Criminal Assets Bureau.

This Bill is very complex and technical, but will considerably bolster the powers of the Criminal Assets Bureau in its continuing battle to go after the proceeds of all types of crime, including white collar crime and corruption. It also makes some important changes to the Criminal Justice Act 1994 and the Prevention of Corruption (Amendment) Act 2001 which will be of great benefit to the Garda Síochána and customs officials in pursuing all those who seek to profit from all crime.

I would like to record my appreciation of all those who have been involved in the drafting — the detail, application and otherwise — of this particular Bill. The officials of the Department of Justice, Equality and Law Reform have been very determined to assist in addressing the issue before us, namely, the proceeds of crime and corruption. I commend the Bill to the House.