Simon Harris (Wicklow, Fine Gael) | Oireachtas source

I am pleased to be here to debate the Customs Bill 2014, which was published on 3 October 2014. The purpose of the Bill is to consolidate, revise and modernise Ireland's existing national customs legislation, some of it dating back to the Customs Consolidation Act 1876. The Customs Bill can thus be seen as another significant milestone in the Revenue Commissioners' comprehensive programme to consolidate and modernise our tax and duty legislation. Senators should note, however, that this is not a standard statutory consolidation of the existing customs legislation. Instead, it includes the two additional elements of revision and modernisation, both of which were necessary to cater for developments in trade and technology that have taken place over nearly 140 years.

The principal domestic legislation under which Irish customs currently operates is the Customs Consolidation Act 1876. This Act has been extensively adapted over the years to take account of various events and developments - for example, the foundation of the State in 1922, Ireland's joining the EEC in 1973, and the introduction of the EU Single Market in 1993. As a consequence, many of the provisions in the 1876 Act are now of doubtful validity, yet they remain on the Statute Book. In addition, a number of other Acts concerning customs matters were also passed in the intervening period, including the Customs Act 1956 and the Customs and Excise (Miscellaneous Provisions) Act 1988. Numerous Finance Acts have also, over the years, introduced customs measures, as have a number of ministerial regulations made under the European Communities Act 1972. The result is a complicated, overlapping structure of both old and newer national customs legislation, which can be difficult to follow and understand. The Customs Bill is designed to address this. When enacted, the Customs Bill will repeal the old structure with a single, very much shorter Customs Act, which will be clear, easy to understand and easy to access, which is what we should strive for in all legislation. This consolidated approach, which is in accordance with the requirements of Better Regulation, will result in much clearer legislation in the customs area, to the benefit of all.

Senators should be aware that there is also a European dimension to this. The European Union customs legislation - currently known as the Community Customs Code - now directly provides most of the legal framework for customs, including the rules relating to rates of customs duty in different circumstances, customs valuation, the form of declarations, and so on. As a consequence, national legislation is needed only in respect of those areas that are not already covered by European Union legislation. Typically, these areas include certain control provisions, enforcement powers, and sanctions for breaches of the various customs provisions. This trend can be seen in the structure, and the very much smaller size, of the Customs Bill. The bulk of the material in the Bill reflects a small core of existing legal provisions in relation to customs, now updated to reflect modern language and terminology. This includes certain controls and procedures that are not included in Community legislation, mainly related to arriving and departing vessels and aircraft; specifying the various offences that arise in a customs context, for the most part involving smuggling; specifying the penalties associated with these offences and the procedures to be followed in court proceedings; and providing the necessary powers to customs officers to enforce customs law.

The Bill also includes a number of administrative and housekeeping provisions, among them the repeal and revocation of a large body of existing legislation, much of it of old vintage, which will become redundant upon the enactment of the Bill and its subsequent commencement as the Act. Similarly, the Bill provides for the meeting of a number of specific EU and international customs obligations relating to mutual assistance between Ireland and other member states, to controls of cash entering or leaving the European Union through the State, and to centralised customs clearance.The Bill also carries forward the existing customs appeals procedures. The new legislative provisions are simply a reiteration of the procedures that currently apply and any subsequent changes applied to the tax appeals procedures will have appropriate application to customs appeals.

The Bill also restates and modernises the existing legislation applying customs law to prohibited or restricted goods on their import into, or export from, the State. The Bill sets out the rate of interest to be applied on customs duties that are not paid on time. Lastly, the Bill updates the Taxes Consolidation Act 1997 in respect of Revenue offences.

Before I go through a Part-by-Part explanation of the Bill, I ask Senators to try to imagine the environment for which the original 1876 Act was designed to cater and the social and political mores of those times. I like to think that we have moved on considerably from then and that, for example, we no longer have a need for some of the more extreme powers with which customs were conferred at that time. However, we will always have those who will try to outwit our customs rules and, therefore, not everything has changed in the Customs Bill before the House. Senators might wish to be reminded of the scale of the customs operation in modern day Ireland. For example, Irish customs annually process, on the automated entry processing system, approximately 1.1 million customs declarations in respect of goods being imported from, or exported to, non-European Union countries. This breaks down into roughly 600,000 declarations in respect of imports and roughly 550,000 in respect of exports. Customs duty collected on such imports was €277 million for 2014.

However, it is not just the scale of the customs operation that should be noted. Irish customs also have an enviable reputation regarding the way that they do this business, and it is important to acknowledge that. Senators might like to note that in recent reports from respected international bodies such as the World Bank, the World Economic Forum and the Swiss-based Institute for Management Development, Ireland, and in particular Irish customs, has scored highly in terms of ease of doing business with them. Some of the rankings achieved by Ireland, in categories in which Irish customs have a direct involvement, are as follows. In the category "trading across borders", Ireland scored fifth in the world and second in the EU. In the category "burden of customs procedures", Ireland scored eighth in the world and third in the EU. In the category "efficient transit of goods", Ireland emerged as the leader in the world, beating Singapore into second place. Senators will agree that these rankings paint an excellent picture of the way that Irish customs go about their business and that the Revenue Commissioners are to be congratulated on this.

With that in mind, I will now go through the Customs Bill and describe the main provisions contained therein. Part 1 includes the usual preliminary and general provisions that apply to legislation of this type. Thus, it provides for the Short Title, collective citation and commencement of the Act; for the interpretation of certain words and expressions used in the Bill; for the repeal of certain statutes and the revocation of certain statutory instruments; and for a number of technical linkages to provide for legal certainty and for legal continuity in the operation of the law.

Part 2 of the Bill deals with customs controls. Accordingly, it provides for the appointment of customs ports and airports for the arrival and departure of vessels and aircraft into, or out of, the State; for the approval of places within customs ports and airports for the arrival of vessels and aircraft, for the loading and unloading of goods and stores, for the embarkation and disembarkation of passengers and for the storage of goods awaiting customs clearance; for the control by customs of movement of vessels and aircraft into and out of the State; for the reporting on vessels and aircraft, respectively, arriving in or departing from the State; for the control by customs of persons entering or leaving the State and of their baggage; and lastly, for the continuation of the existing control by customs of postal traffic into and out of the State. Each of the relevant sections provides for an offence for contravention of the provisions of the section and for the penalty that applies.

Part 3 deals, in the first instance, with customs offences and penalties. Thus, it provides for offences relating to improper import or export of goods, that is to say without payment of any duty or contrary to a prohibition or restriction on their import or export, and for other customs-related offences, primarily related to non-compliance with a requirement imposed by a customs officer performing his or her duties, or interference with customs property or equipment, or adapting conveyances for smuggling purposes.

In both cases the sections reflect provisions in current legislation and they provide for the penalties that apply. Part 3 also deals with various aspects of customs-related court proceedings. As such, it provides for determining whether a customs offence is to be tried summarily or on indictment; for the forfeiture of goods which have been illegally imported or attempted to be illegally exported, that is to say without payment of duty or contrary to a prohibition or restriction; for a notice of seizure to be given to the owner of goods, where the goods are seized by a customs officer; for a notice of claim to be made by a person who claims that something seized as liable to forfeiture was not so liable; for court proceedings for condemnation of seized goods; for the rules for court proceedings in relation to customs offences; for the question of damages and costs in civil or criminal cases where judgment is given against a Revenue official as the defendant, on account of the seizing or detention of any thing; and lastly, for presumptions and onus of proof in proceedings under the Customs Acts, that is to say where certain things may be presumed to be true until the contrary is proven. In all these areas, the sections are a restatement and modernisation of existing customs provisions and no changes of substance are involved.

Part 4 deals with customs powers. Thus, it provides customs officers with powers to enter, inspect and patrol certain places without a court warrant; to stop vessels, aircraft, vehicles and other means of transport in different circumstances; to board and search conveyances that are entering or leaving the State, as well as away from ports and airports and the land frontier; to examine goods under customs control; to enter and search a specified premises or land under a search warrant issued by a judge of the District Court, and to seize and detain anything found in the course of the search which might be required as evidence in proceedings for an offence under the Customs Acts or any other enactment; to search persons in certain circumstances and subject to certain safeguards; to stop and question a person entering or leaving the State as regards their journey and their baggage and, if necessary, to search that baggage; to arrest without warrant a person who a customs officer suspects is committing, or has committed, certain offences, or where the person has obstructed or assaulted a customs officer; to detain goods being imported or exported, pending the outcome of inquiries and investigations into whether the goods in question are in compliance with the Customs Acts; and lastly, to seize any goods that are liable to forfeiture under the Customs Acts and to deal with seizures, whether before or after the goods have been condemned by the courts. Such powers are essential control requirements to ensure compliance with both EU and national customs legislation and, crucially, to prevent smuggling.

Part 5 deals with general customs administrative matters. Most of the sections are standard provisions in legislation relating to the Revenue Commissioners. They provide that the duties of customs are under the care and management of the Revenue Commissioners; that the commissioners may authorise customs officers to carry out various functions; that certain powers, functions or duties may be delegated to an officer of the commissioners; and that the Revenue Commissioners and the Minister for Finance, respectively, may make regulations for the purposes of giving effect to the Customs Act and of giving full effect to the community customs code.

Part 6 deals with EU and international customs obligations. As such, it provides for a system of penalties for contravention of certain customs rules and procedures; for the continuation of the force of law in respect of the Naples II Convention, which governs mutual assistance between EU customs authorities in relation to criminal matters; for the application by Ireland of the 2009 EU Council decision on the use of information technology for customs purposes; for controls of cash entering or leaving the European Union through the State; and lastly, for the ratification by Ireland of the EU Council convention of 10 May 2009 on centralised customs clearance, concerning the allocation of national collection costs when customs duties are made available to the EU budget.

Part 7 provides for the appeal procedures in relation to customs decisions and assessments of customs duty. As I stated earlier, these sections are a restatement of the existing legislation. Part 8 deals with a number of miscellaneous provisions. The first of these restates and modernises the existing legislation applying customs law to prohibited or restricted goods on their import into, or export from, the State. The second provides for the charging of interest arising from late payment of customs duties. Lastly, the Bill amends section 1078 of the Taxes Consolidation Act 1997 in respect of Revenue offences.

I commend the Bill to the House. I look forward to the debate on Second Stage and to teasing out any issues on Committee and Remaining Stages.