Denis O'Donovan (Fianna Fail)

I welcome the Minister for Justice, Equality and Law Reform. I also welcome the Bill which is another bow in the armoury of those fighting organised crime, with which we have to deal. As the Minister said, the main purpose of the Bill is to transpose into national law the third EU money laundering directive which was introduced in 2005 and the associated implementing directive. It should be noted that the Criminal Justice Act 1994 provides the foundation for our money laundering laws. Obviously, this updates and brings it into line.

I remind Senator Regan who was critical of the delay in introducing the Bill that the most important matter is for its contents to be as correct as possible. The Minister has said it is likely that he will table amendments in this House on Committee Stage or Report Stage. That is an indication of the ongoing, fluid nature of this process. It is not something solid that cannot be changed.

The Bill will also ensure Ireland complies with the recommendations of the third mutual evaluation report on Ireland of the Financial Action Task Force, FATF. The Bill also proposes to repeal and re-enact the current anti-money laundering provisions contained in other statutes, principally the provisions relating to money laundering contained in the Criminal Justice Act 1994. To highlight the difficulties faced by not just the Legislature but the Garda and those dealing with criminal terrorism, I note from the House of Lords European Union Committee 2009 report on money laundering and the financing of terrorism that the "acquisition of the wealth and property of others is the ultimate objective of every serious criminal; those assets are also the lubricant of criminal activity, and so the motivation for further crime". It is a serious worldwide issue.

The significant work done by the Minister for Justice, Equality and Law Reform in addressing drug smuggling must be noted. Historically, Ireland has been used as a gateway to Europe for the importation of drugs. Significant and frighteningly substantial volumes of drug shipments destined for the British and European markets have been intercepted off the west Cork coast. The first case off Mizen Head led to the jailing of four individuals. Some of those who planned the shipment but fled from west Cork when it failed have been captured and will face the rigours of the law in another jurisdiction, England. Such detection is to be welcomed.

The claim that only 5% of what is smuggled through Ireland is detected is often trotted out in the media and debates. The truth is that it is far closer to 40%. While we cannot take our eye off the ball in combating drug smuggling, it must be recognised that in recent years, especially under the watch of the Minister for Justice, Equality and Law Reform, Deputy Dermot Ahern, the Garda, Customs and Excise and the Naval Service have had major successes in the detection of drug smuggling.

Drugs naturally are sold for cash only which in turn fuels money laundering. The Bill's objectives will impose additional responsibility on designated private sector bodies, in particular the financial sector, to carry out due diligence measures on customers, identification of politically exposed persons, etc.

I recall in the 1980s, in the infancy of my solicitor's practice in west Cork, a European client arrived at my office at 5.15 p.m. on a Friday with a case containing £150,000. Having spent an hour counting the money, the client wanted me to sign an undertaking to take responsibility for his suitcase of cash for the weekend. My office safe at the time was meagre. A couple of strong criminals would have easily lifted it away. I refused to give him the guarantee despite his severe protests.

While I had no reason to suspect his motives, I was nervous about the undertaking as the banks were already closed and I did not have the financial back-up to deal with the sum involved. On Monday, I was a bit regretful the individual vanished and that I may have been too strict. In time I realised, however, I was fortunate that I did not take on the undertaking. In the 1980s, there is no doubt that accountants, solicitors and financial advisers were used by others to launder money. There was a time when these professions would not dare ask someone where they got the large sums of money with which they were asked to deal. That the Bill will tighten the requirements of these professionals to prevent money laundering is to be welcomed.

As Senator Regan pointed out, it is frightening that between $590 billion and $1.5 trillion of the world's gross domestic product is estimated to be laundered each year. While I am not normally taken to studying the proceedings of committees in the House of Lords, its European Union Committee's 2009 report on money laundering was interesting. It stated:

Serious organised criminals invest in property, shares, trusts, and pensions as well as accumulating high value goods, such as jewellery, vehicles, art and other collectable items. These assets may be held in the names of friends or family to conceal the true ownership. Investment in private and commercial property, including overseas, is especially attractive because it appreciates in value over time.

It shows the sophistication of money laundering and the extremes taken by the criminals involved in drugs, racketeering and terrorism. From the CIA, FBI and international police force investigations into the events of 11 September 2001, there is no doubt a network like al-Qaeda has access to billions of dollars internationally. Much of this is laundered nationally and internationally. The atrocious disaster of 9/11, its planning and other international terrorist atrocities came from money laundered in different ways in countries. We must deal with the situation in Europe and we must comply with European directives. No doubt this legislation will comply with same.

Senator Regan referred to the processing and placement of illegally derived funds into the financial system. We learn something new every day. Another aspect is the layering and integration. This is a sophisticated system and for those on the receiving end it is worthwhile. It is intriguing and there is no doubt money laundering is very complex. Money laundering takes place and even with the implementation of this legislation, while I wish I could say that in 12 months or two years money laundering will be a thing of the past, regrettably that will not be so. The measures in this Bill and the measures taken by our financial institutions and our professional groups will help to curtail the effects of money laundering. That is not before time.

Section 37 refers to enhanced customer due diligence for politically exposed persons or parties. Perhaps the Minister can further elaborate on this point on Committee Stage or Report Stage. I am glad to see colleagues welcome the thrust of this Bill even though they are critical of the delay since 2007. I lend my support to this Bill and I hope it gets speedy passage through this House. If the Minister introduces amendments on Committee or Report Stage I am sure they will be well thought out and I am reasonably confident such amendments will be scrutinised by the Opposition. If these are seen as appropriate and strengthen the Bill, they will receive a substantial welcome.