Seanad debates

Tuesday, 28 May 2013

Criminal Justice Bill 2013: Second Stage


Question proposed: "That the Bill be now read a Second Time."

4:35 pm

Photo of Fergus O'DowdFergus O'Dowd (Louth, Fine Gael)
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Táim ag tógáil an Bhille seo thar ceann an Aire Dlí agus Cirt agus Comhionannais. Tugaim leithscéal ar son an Aire nach mbeidh sé in ann freastal sa Teach seo inniu.

The Bill was originally published as the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Bill 2013. However, as it was amended to include a number of provisions unrelated to money laundering, the title was changed on Report Stage in the Dáil. The Bill comprises three parts, the first addressing the usual matters to do with the Short Title and commencement; the second addressing money laundering and terrorist financing; and the third containing provisions to help the Garda Síochána prevent terrorist attacks. The main objectives of Part 2 are to amend the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 so as to more closely align its provisions with the recommendations of the financial action task force, FATF, and to take account of improvements suggested by the experience of operating the legislation ó thosaigh sé sa bhliain 2010.

While our legislation to counter money laundering and terrorist financing is of the highest standard, it is important it is adapted to reflect the practical lessons learned from the experience of its operation but also that is seen to clearly reflect international norms. Part 3 of the Bill provides for mobile phone networks to be shut down to prevent their use in detonating a bomb. New provisions in Part 2 will allow the Garda Síochána to address concrete threats involving the use of cell-activated improvised explosive devices.

Money laundering and terrorist financing can be done on a small or a large scale and can involve international transactions. It requires a response as sophisticated as the methods of the criminals involved and co-ordination on a national and international level. The financial action task force on money laundering was established in 1989 and Ireland joined in 1991. Its purpose was to develop policies to combat money laundering and terrorist financing. The standards are applied by its 36 members and FATF evaluates its member states’ compliance with its recommendations.

Provision was first made for anti-money-laundering measures in the Criminal Justice Act 1994. The Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 saw our laws in the area updated to reflect international developments. The prevention and detection of money laundering relies on the co-operation of legitimate businesses whose systems are abused by criminals to make the proceeds of their crimes appear to be legitimate income. The 2010 Act requires an expanded range of designated persons, including banks, lawyers, accountants, gaming clubs and dealers in high-value goods, to put in place prevention and detection measures.

Following our 2006 FATF evaluation, Ireland was placed in the regular follow-up process. Our situation was reviewed in light of the passage of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 and FATF identified a number of technical issues. The amendments to the 2010 Act in the Bill are, in the main, aimed at giving effect to those technical changes so that Ireland can be removed from the follow-up process at the FATF plenary session in June. It is an important step in protecting Ireland’s reputation as a good place to do business and a country that enforces international standards in preventing and tackling money laundering. The Bill addresses the FATF concerns with the current legislation as evaluated under the old FATF recommendations. It is preferable to legislate for the new FATF recommendations as revised in 2012. However, that cannot be done until the final shape of the fourth EU directive is known, as the fourth directive will give effect in EU law to the new FATF recommendations. The EU Commission’s proposal for the fourth directive on money laundering and terrorist financing was published in February of this year. It is currently the subject of negotiation in a Council of the European Union working group under the Irish Presidency.

We cannot afford to postpone making the amendments to the 2010 Act contained in the current Bill. The Department of Finance advises that if Ireland’s stay in the FATF follow-up process is prolonged beyond June, there could be negative consequences for our international standing.

This Bill is, therefore, an interim measure. It provides for some technical adjustments to the 2010 Act to enhance our compliance with current international standards, but we will have to review the systems we have in place once the proposed fourth EU directive is enacted.

Part 3 of the Bill is aimed at tackling the threat arising from terrorists and criminals who seek to use mobile phones to remotely detonate explosives. It will allow for the cessation of mobile telecommunications services where such a cessation would help to avert a threatened explosion. Given that mobile telecommunications are such an integral part of the everyday lives of people in businesses, such a cessation cannot be undertaken without proper or adequate safeguards and controls. Therefore, Part 3 provides for a series of steps to be taken before a direction can be issued to mobile service providers to cease service within a particular area. Accordingly, where an assistant commissioner of the Garda Síochána reasonably believes there is an imminent, serious threat to life, limb or of serious damage to property, he or she will be able to apply to the Minister for Justice and Equality for an authorisation. If the Minister is satisfied that there are reasonable grounds for believing there is a serious threat and that cessation of mobile phone services would assist in averting that threat and, having regard to all of the circumstances, including the importance of maintaining mobile phone services in the area concerned and the effect on users, that cessation of such services is necessary and proportionate, he or she may grant an authorisation. This authorisation can last for only 24 hours, which will allow a Garda chief superintendent to issue a direction to a mobile service provider to cease providing mobile phone services in an area. A direction can only be issued by a chief superintendent where he or she is satisfied that the serious threat continues and that other means of averting that threat are less likely to succeed. The period for which a direction can be enforced is limited to six hours. Where a direction is no longer required, it must be withdrawn. Mobile phone companies will be required to comply with a direction and failure to do so will be an offence. The proposals will require that mobile service providers continue to maintain, where possible, emergency call facilities. While not all service providers are capable of this at present, it is expected that they will incorporate such a facility eventually, as part of the regular upgrading of their systems.

I will now outline the provisions of the Bill which consists of 29 sections in three Parts. Part 1, section 1, provides for the Short Title, collective citation and commencement. Part 3 shall commence on enactment, while Part 2 shall be commenced by an order or orders. Part 2, section 2, defines the Act for the purposes of that Part. Part 2 deals exclusively with amendments to the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010.

Section 3 amends section 17 of the 2010 Act. The purpose of this amendment is to clarify that orders which may be made by a District Court Judge under section 17 of the Act of 2010 shall be made ex parte and not in public.

Section 4 provides for amendments to the definition of "occasional transaction" which is contained in section 24 of the 2010 Act. The definition provides that an occasional transaction vis-à-visa customer of a designated person means a single transaction or a series of transactions that are or appear to be linked with each other, where the total amount reaches €15,000. This will ensure obligations under the Bill such as customer due diligence apply once this threshold is reached. Section 4 provides for the lowering of this threshold in private members' gaming clubs, where the value concerned in a transaction reaches €2,000, and for the wire transfer of funds, where an amount of €1,000 is reached.

Section 5 provides for a technical amendment to section 25 of the 2010 Act. Its purpose is to clarify that the obligations which arise for a relevant independent legal practitioner as a designated person only apply when such practitioners are carrying out the services listed in the definition of "relevant independent legal professional".

Section 6 amends section 33 of the 2010 Act. The purpose of the amendment in the Bill is to align the wording contained in section 33 more closely with international standards. It will not result in any substantial change to obligations under the Act.

Sections 7 and 8 amend sections 34 and 36 of the 2010 Act which relate to the application of simplified customer due diligence, CDD.

The purpose of the amendments is to make explicit what is implicit in the legislation - a designated person must take the necessary measures to establish that the particular customer or product is one to which such provisions can be applied.

Section 9 amends section 37 of the 2010 Act, which deals with politically exposed persons, PEPs. The amendments will provide that the necessary measures must be applied to an existing customer who becomes a PEP. It also explicitly provides that enhanced ongoing monitoring must be applied to all PEP customers.

Section 10 amends section 39 of the 2010 Act, which deals with the application of additional CDD measures, that is, enhanced CDD, to a customer or beneficial owner where there is a higher risk of money laundering or terrorist financing. The current legislative provision provides for the option of applying enhanced CDD by the designated person. The amendment provides that enhanced CDD must be applied by the designated person where it has reasonable grounds to believe that there is a heightened risk of money laundering or terrorist financing.

Section 11 amends section 54 of the 2010 Act, which deals with the internal policies and procedures that a designated person must put in place with a view to preventing and detecting money laundering and terrorist financing.

Section 12 amends section 55 of the 2010 Act. The purpose of the amendment is to provide the flexibility that is required in relation to where records are stored, while also ensuring that the records are readily available to relevant authorities such as An Garda Síochána and competent authorities to carry out their functions and powers.

Section 13 amends section 84 of the 2010 Act. Its purpose is to clarify that a designated accountancy body is not obliged to act as the competent authority for a company purely because an employee of the company is a member of the designated accountancy body.

Section 14 amends section 71 of the 2010 Act to extend the type of directions that a "State competent authority" may issue to a designated person, thereby increasing and improving existing enforcement powers. The new provision will enable a State competent authority to issue positive as well as negative directions. The new provision will also now provide that such directions may be issued to a class of designated persons. This power will enable State competent authorities to recognise and cater for the different compliance issues that might arise between the different businesses or sectors for which they are responsible.

Section 15 provides for subsidiaries of a credit or financial institution operating as a trust or company service provider, TCSP, to be authorised and monitored by the Central Bank rather than by the Minister for Justice and Equality.

Section 16 provides for miscellaneous amendments to the 2010, which are consequential to those contained in section 15.

Sections 17 and 18 provide for registers which are required to be kept under the Act to be more accessible by being kept online and to allow for their amendment.

A number of terms are defined in section 19 for the purposes of Part 3. A key definition is that of "serious threat" which forms the basis for any consideration of the exercise of the powers contained in this Part. Serious threat is defined as -

"an imminent threat that-
(a) an explosive or other lethal device will be activated by use of a mobile communications service provided in the State by an undertaking, and
(b) the activation of that explosive or other lethal device is likely to cause -(i) death of a person,
(ii) serious bodily injury to a person, or
(iii) substantial damage to property; "
It is clear that we are concerned under this section with a high level of seriousness. The powers conferred under this part will only be available where a serious threat is imminent.

Sections 20 to 22, inclusive, deal with applications for authorisations, the conditions justifying authorisations, and the granting of authorisations. The Minister must receive an application from a member of the Garda not below the rank of assistant commissioner and be satisfied as to a number of matters which, broadly put, are: There are reasonable grounds for believing that a serious threat exists; that the cessation of mobile phone services would help to avert that threat; and that in the circumstances, an authorisation is necessary and proportionate. An application must be made in writing. In cases of exceptional urgency, it can be made orally and confirmed later in writing. Section 21(7) provides for the Minister, for reasons of safety and security and essential interests of the State, to refuse to disclose various matters relating to an authorisation. The Minister may not refuse such disclosure to a court.

An authorisation may remain in force for only 24 hours. An authorisation will permit a Garda of chief superintendent rank or higher to issue directions to undertakings, that is, licensed mobile phone companies. It shall specify a maximum duration of six hours for any cessation period. The Minister must record his or her reasons for granting an authorisation. This recording of reasons ensures the Minister's actions will be capable of subsequent judicial review.

Section 23 provides for an authorisation to be varied or extended. However, such variation or extension is subject to the same conditions applicable to the making of an authorisation contained in sections 21 and 22.

Section 24 contains the power for a member of the Garda Síochána not below the rank of chief superintendent to issue a direction to an undertaking to cease providing mobile communications services. The section contains a range of safeguards and conditions. Subsection (1) requires a ministerial authorisation to be in force. It also requires the Garda to be satisfied that the serious threat on which the authorisation was based continues and that other means are less likely to avert it.

A direction must be issued in writing and signed. There is provision for oral directions in urgent cases, but confirmation in writing is required. A direction must state the name of the undertaking to which it is issued and must contain information on the authorisation on which it is based.

The direction will specify the services to be ceased, the cessation period and the geographical area concerned. It may contain additional requirements necessary to averting the serious threat. The cessation period cannot be longer than that set in the Minister's authorisation and, in any case, cannot exceed six hours. The terms of a direction, other than the cessation period, can be varied, subject to the requirements in subsections (2) and (3). When issuing or varying a direction, the member of the Garda Síochána must limit the effect of the cessation on the public to the minimum necessary to avert the threat.

The section provides a significant power for senior officers of the Garda Síochána. Cessation of mobile communications services represents interference with the ability of people to communicate with one another. However, the interference for which we are providing is not made lightly. It is subject to all the conditions I have mentioned and only available where there is a serious and imminent threat to life, limb or property from an explosive or lethal device activated by mobile communications services.

Section 25, to protect the integrity of counter-terrorist and security operations, provides for a degree of secrecy around authorisations and directions. The content or existence of a direction or authorisation may not be disclosed prior to the cessation period. Only the content of a direction or authorisation cannot be disclosed after the cessation period. This will allow mobile phone companies to explain the cessation of service to customers after the fact, should such explanation be necessary, by referring to the existence of a direction but without disclosing its content.

Subsection (3) requires undertakings to endeavour to continue to provide emergency service calls. The technology is available, if not yet fully in place, for mobile phone companies to maintain the availability of 999 services, while otherwise effectively shutting down their networks. We will be looking to mobile phone companies to live up fully to their obligations under this subsection.

Section 26 places similar non-disclosure obligations as apply to undertakings on other persons in regard to the existence and content of authorisations and directions. Section 27 requires that where the member who issued the direction considers that it is no longer necessary, he or she must withdraw it without delay and notify the undertaking.

Section 28 provides for the Minister's functions under this Part to be carried out by a nominated officer. The Minister may only nominate officers for this purpose of assistant secretary grade or higher.

Section 29 provides for a number of offences, all of which carry penalties of class A fines and-or 12 months imprisonment on summary conviction, or an unlimited fine or five years imprisonment on conviction on indictment. The offences address a failure to comply with a direction, intentionally hindering compliance by an undertaking with a direction, and certain disclosures relating to directions or authorisations contrary to sections 20 and 21.

The standard provision for the criminal liability of corporate officers is made in subsection (5).

In a reflection of the sensitivity of the security issues involved and the non-disclosure requirements of the Bill, provision is made for criminal proceedings or part of them for offences under this Part to be heard otherwise than in public. This would be a matter for the Director of Public Prosecutions and ultimately the court hearing the proceedings.

I look forward to hearing the contributions of Senators and hope the House will support the passing of the Bill which provides for some technical but necessary amendments to the law on money laundering and terrorist financing. It will provide An Garda Síochána with a vital tool in its efforts to prevent death and injury in terrorist bomb attacks. I commend it to the House.

5:00 pm

Photo of Denis O'DonovanDenis O'Donovan (Fianna Fail)
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While I welcome the Minister of State, I express my regret and disappointment that the Minister for Justice and Equality, Deputy Alan Shatter, is not present for the debate on this important legislation.

The Bill updates legislation that Fianna Fáil passed in 2010 which transposed EU directives and UN conventions into national law. Its aim is to combat the efforts of criminals and other associates to conceal the origins of the proceeds of criminal activity or channel money into terrorist activity. In the light of ongoing dissident republican activity across the country, the need to tackle money laundering directly is particularly important to Ireland. Criminal activity in diesel laundering, racketeering, illegal tobacco sales and other illicit activities undertaken by a rump republican movement continues to present a serious threat to law and order in the State and the Garda must be fully resourced to meet this threat. Unfortunately, the number of gardaí is probably at its lowest in a decade and resources are wafer thin. It is difficult to see how modern, sophisticated Garda units can be properly resourced in the current situation. These are points I would have liked to make to the Minister.

It is also important to note that the objective of this legislation is primarily to deal with dissident republican activity. A US Department of State report on terrorist finance cited the major role that tobacco sales, subsequently laundered, were playing in fuelling global terrorism. There is also a problem in this country with illicit tobacco sales. The report specifically mentioned the role of the Real IRA, among other international groups such as Hezbollah, Hamas and the Kurdistan Workers' Party or PKK. We are dealing with a very serious issue.

Last week I was unable to contribute to a debate on the issue of diesel laundering, particularly along the Border. It is particularly relevant to the Minister of State's native county, County Louth, and all the Senators from County Louth contributed to the debate. I listened to some of it. It is a serious problem. It appears to me, as a person from the south west of the country, that the State, the Garda and the Customs service are losing the battle against these organised criminals and money laundering. It is a small concentrated area and I realise the State organisations are doing their utmost, but it appears the criminals can wilfully move from A to B to C. When one operation is closed down, they open one up somewhere else within a few days. This must be seriously examined. That view has been expressed to me by middle ranking gardaí who, in the past, might have served in some of the Border counties and the northern area. We appear to be losing that war, about which I am very worried.

The Criminal Assets Bureau, CAB, a multi-agency body staffed by people from the taxation, customs, revenue and social welfare areas, as well as the Garda, must play a central role in identifying and targeting money laundering activities and the assets of groups such as the Real IRA and the newly emergent New IRA alliance of dissident groups. Dissident republican groups have been waging a campaign of violence against the people of Ireland that is funded by a series of money laundering processes which turn illicit funds into the fuel for terrorism. This is a frightening scenario. There is a view which I share and which I raised with the Minister in the past few weeks that gang warfare is running wild in Dublin, with people being knocked off almost on a weekly basis. Some of this is connected to the Real IRA or dissident republicans, which is a sad reflection on the State. I hope the Garda, the Minister and the Government will try to tackle and stymie it.

We have successfully dealt with it in Limerick and it seems to be a problem in Dublin. I hope the situation is a result of under resourcing or a lack of funds, but I think not. On an almost weekly basis in Dublin there are tit-for-tat killings and gang leaders knocking off others. We should not shed crocodile tears for those who were gunned down because they lived by the gun. I hope the Minister of State will convey my serious concerns to the Minister.

The violent feud between republicans and drug lords in Dublin and the ongoing violence against PSNI officers in Northern Ireland continue to cast a dark shadow across the political landscape of the island. We have a peace process, which we all lauded. Some 98% of people in the Republic of Ireland welcomed it, and it was welcomed in Northern Ireland. I am delighted to hear senior Sinn Féin figures condemn those who are fuelling dissident republicanism. Their idealism has gone out the door and I often wonder whether the Real IRA and dissident republicanism are a front to add some small degree of legitimacy to their operations such as money laundering, diesel laundering and tobacco smuggling. The veil of importance which has been put on such people should be unmasked by the Bill. We welcome the Bill and will support it.

The enhancing of money laundering legislation in line with international standards and the experience of the 2010 legislation will enable Ireland to move effectively to deal with the threat of dissident republicans. However, the Government assault on the Garda, which stands as the thin blue line against the violence of terrorists, undermines its efforts to challenge violence. It is a point I have raised before and I do not want to rabbit on about it.

The Minister, Deputy Shatter, said in an Adjournment motion that the closure of rural barracks was not a cost-saving exercise. I would love to see an evaluation done in three or five years time on what, if anything, has been saved by closing stations across the country. Some five or six in my constituency were closed. It is a backward step.

I am also concerned about the slow reopening of the Garda training facilities in Templemore. The previous Government started the process. We are almost at crisis point. The number of new recruits who have been properly trained has decreased so much that if the situation is not addressed in the next year or two we could face a serious problem in the next four or five years.

The Garda needs to be effectively resourced to meet the threats of the dissident republican movement and ensure Ireland is not exploited by international terrorist groups to finance their global activities. From time to time I have thrown daggers and spears at the Minister, Deputy Shatter. I have also praised him when he has done positive things. I am not being personal.

When I see the Minister for Agriculture, Food and Marine, Deputy Simon Coveney, fighting for farmers and fishermen in Europe, he wears the green jersey. We should unite and I want to show the complete solidarity on this side of the House with what the Minister, Deputy Shatter, the Government and the Garda at all levels are trying to do to stymie those engaged in laundering diesel, smuggling cigarettes, terrorism and so on.

All of us in our democracy should continue to ensure we close ranks, despite our political differences and disputes, to ensure the Garda has the full moral authority of the Houses and that the Minister has our support. There may be a change of Government in three or five years time, but we have to be combined, relentless and ruthless in our campaign against terrorism. The Minister of State and the Minister, Deputy Shatter, have our full support for the Bill. We wish it a speedy passage through the House.

5:05 pm

Photo of Paul BradfordPaul Bradford (Fine Gael)
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I welcome the Minister of State to the House and the initiative of the Minister, Deputy Shutter, in introducing the Bill. As the Minister of State has pointed out, the section dealing with money laundering is an interim measure and further developments will take place.

Notwithstanding the interim nature of this measure, it must be supported. The other section of the Bill, which deals, in layman's language, with mobile phone signals and technological aspects, is very pressing in light of forthcoming events. It is only appropriate that we fully support the Minister in his efforts in this area.

I welcome the comments by the Fianna Fáil spokesperson, Senator Denis O'Donovan, and his generous support for the legislation. He is correct that the vast majority of politicians in this House have, over the years, united in supporting the Garda, law and order and security in this country. Long may it be the case. It is fair to say, however, that it has always been the case, since the foundation not only of the Oireachtas but of civilisation itself, that there will be a clash between civil liberties and state security. Civil liberties are very important and must be guarded and protected. The first duty of government, however, is the security of the state and its citizens, and that is the context in which this legislation comes before us. We in this House must be mindful of doing everything possible to ensure the rights of citizens and civil liberties. At the same time, where law needs to be changed to provide additional security on behalf of every citizen of this State, we must be supportive of those changes.

The briefing we received from the excellent Oireachtas Library and Research Service includes a section on the scale of money-laundering in this country. While we are advised that it is not possible to provide exact figures, there is reference to the staggering estimate in the 2011 report by the United Nations Office on Drugs and Crime that the moneys involved globally in 2009 amounted to some $1.6 trillion, which equates to 2.7% of global GDP. We in this country are not insulated from such issues and for every worldwide problem there is an Irish aspect. Senator O'Donovan referred, for example, to the debate in this House last week on diesel laundering. I agree with him that our attempts to grapple with this problem have not been wholly successful. In fact, we had a disappointing case only a few days ago in which a seized truck and its contents were taken from the location in which they were being held. All the evidence in that case is gone.

We must be vigilant in our efforts to stamp out this activity. Together with fuel laundering, there is also a serious problem with cigarette laundering. Whatever resources are required, within the financial capacity of the State, must be put in place. In the case of Border areas, there seems to be spillover from the days of the tragic conflict in Northern Ireland, with new gangs masquerading as political organisations engaged in illegality on a huge scale. Perhaps we have not yet invested the time, resources and funds to tackle those groups head-on. We must do so without delay, given the scale of the overall problem. It is apparent here in the capital city and in larger towns and cities throughout the country that the illegal trade in cigarettes is a major problem.

We are dealing with a modern manifestation of criminality. I saw an old episode of "Hawaii Five-0" on one of the Sky channels last week. In that simpler time, the baddies in their fast car were chased by the police in their faster car. If the baddies switched to a fast boat, they were inevitably apprehended by the good-guy cops in the faster boat. Now, however, we are in a much changed world in which terrorism and criminality have advanced to a new level. We must be willing to invest time, resources and taxpayers' money in tackling these activities.

This is because every illegal cigarette and every illegal litre of fuel sold is at a cost to the taxpayer. Whatever resources are required should be provided.

The second aspect of the Bill is probably better from the headlines perspective. It relates to mobile telephone technology. We need this legislation to give the Minister and, therefore, the Garda, power to shut off telephone signals. Tragically, we have seen in recent years that terrorists have developed their capacity not only in scale but in ingenuity, such that mobile telephones have become a central part of the terrorist network. The Minister of State has outlined the Minister's proposals relating to regulations and safety measures. We are not moving towards a police state; we are simply putting in place what is needed by a modern society to protect itself.

An event will be held on the island of Ireland in the near future and world leaders of significant importance will be here, although I imagine every world leader believes he or she is of importance. Presumably, the Bill is required as part of the security measures for that visit, but it is required for other reasons and it should be supported. We must be internally vigilant and advanced and we must be willing to take on board all new counter-terrorism activities as they are presented to us, whether they relate to money-laundering or technologies. The money-laundering aspects of the Bill will be revisited in the House when new regulations and legislation are required but we must pass this legislation this afternoon on Second Stage. Likewise, I presume the mobile telephone signal issue has been flagged as a problem and a solution to it is required. I welcome the legislation in this regard.

We have made great progress on this island in reducing paramilitary activities to an almost non-existent level but new replacements have come in, including drugs gangs, and they engage in criminality and money-laundering activities. This is a new level of another type of terrorism which we must deal with now. This legislation is part of but not entirely the solution. I welcome it, I thank the Minister of State for his presentation and I look forward to supporting the Bill.

5:15 pm

Photo of Feargal QuinnFeargal Quinn (Independent)
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The Minister of State is welcome as is this Bill. I understand the need for it in many ways. Let us recall what happened following the bomb in Omagh and the understanding that telephone calls could be traced for some time beforehand. With the G8 summit taking place in Lough Erne next month it is clear that we need this legislation, although I imagine we need it anyway.

I realise the Bill is mainly technical in nature. I wish to raise an issue that is not often raised, namely, the potential for the private sector to use its initiative to get more involved in countering money-laundering and terrorist financing. It is well documented that organised crime groups, including terrorists, are often linked to a wider criminal enterprise and to specific financial transaction partners. Banks can identify payments that are linked to crimes, including those related to human trafficking. I offer a simple example. It has been found that payments to those involved in human trafficking are often large round figures paid from particularly high-risk areas by known fronts or individuals. I understand the JPMorgan Chase & Company bank in the United States has developed a software programme to identify such payments. The bank has passed the information onto the U.S. Department of Homeland Security and has had success in stopping some large human trafficking operations. Could Irish banks give something back to society along these lines?

If there was more co-operation on financial investigation, we could identify criminals such as human traffickers or terrorists more easily. Instead of merely scooping up the point-man in Ireland, we could co-operate on an international level to trace back financial payments. Such investigations can also provide vital evidence in proving cases of various crimes. Electronic databases, including credit cards, are much needed. While I realise privacy is an issue, there must be a balance. Does the Minister believe our electronic databases in this respect are fit for purpose if we are really to identify criminals and co-operate internationally? If the Garda is investigating, for instance, a case of human trafficking or human smuggling, it should initiate a parallel financial investigation at the same time. Could this be turned into a policy? This happens in other countries. Does the Garda even have enough resources to do this? The evidence would suggest it does not. It simply picks up the low-level person at best while the big-time criminals at the top evade arrest. I am not sure, however, whether it is easy enough for the Garda to investigate such transactions. I firmly believe we must follow the money to fight crime. In the case of human trafficking, it is interesting to remember that trafficked people send back sometimes 100% of the money earned and this money can be tracked too. I do not think enough links are being made to this development.

I am interested to hear the Minister's views on the issues raised, particularly private-sector initiatives and whether we could introduce a policy so the Garda is compelled to start a financial investigation if a crime such as human trafficking is suspected. While I believe that legislation in this area is welcome, we must not forget the fundamental fact that it is the Garda that is enforcing the law. We must remember its members are on the front line, so they must be motivated and be directed at a policy level to get stuck into crimes such as money laundering and terrorist financing.

This Bill is well thought-out and there is no doubt that the objective is correct. I believe it will limit the amount of human trafficking and money laundering.

5:20 pm

Photo of Ivana BacikIvana Bacik (Independent)
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With the permission of the House, I would like to share time with Senator Harte.

Photo of Paul CoghlanPaul Coghlan (Fine Gael)
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Is that agreed? Agreed.

Photo of Ivana BacikIvana Bacik (Independent)
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I welcome the Minister of State, Deputy O’Dowd, to the House, and I welcome the Criminal Justice Bill 2013, which has received good support from both sides of the House. We had a good debate, as Senator O’Donovan will recall, on the 2010 Act which this Bill amends. As the Minister stated, the bulk of this Bill - all of Part 2 - deals with amendments to be made to the 2010 Act to improve its operation.

I recently had the pleasure of chairing an Irish Centre for European Law conference at the Royal Irish Academy on the enforcement of criminal law for transnational crimes across national boundaries across the EU. It looked at issues concerning forfeiture and seizure of criminal assets. It was interesting to hear from people on the front line of law enforcement against organised crime and the challenges with which they deal. It is useful to hear that the amendments proposed in this Bill have been devised by the financial action task force on money laundering and are mostly technical to improve its operation.

Section 9 provides for a change to the definition of “politically exposed persons” to include somebody who has become politically exposed. It seems sensible that a person may have developed a relationship with a bank before they became what the 2010 Act defines as a politically exposed person. That is the sort of amendment we can all support.

Part 3 is a more substantial change to the law and others have spoken of the need for this change. Recent developments and tragedies such as the Boston bombing make us mindful of the need to provide these powers, although they are extremely extensive and we would all hope they will never have to be used. We all appreciate these are powers that reside in the Minister and the application for the direction set out can only be made by an assistant commissioner or a Garda officer above that rank.

I think very clear safeguards are being put in place.

I would be grateful if the Minister of State would bring a couple of points regarding this Bill to the attention of the Minister, Deputy Shatter. First, I think the Minister should be mindful of the extensive nature of the powers being provided for. We should be conscious that under section 19 of the Bill, the geographical area to be covered could be the whole country - the whole jurisdiction of Ireland. That seems extremely extensive. Could the mobile phone network be shut down for six hours across the whole of Ireland? That gives us some sense of the extensive nature of the power being provided for.

The Minister of State referred in his speech to section 25, which contains provisions relating to emergency numbers. There is a worry that there is no mandatory requirement for emergency numbers to be accessible when networks are otherwise shut down. I know the Minister of State said he is hopeful that the providers will co-operate. Clearly, there may be technical difficulties with the availability of those numbers.

I would like to make a technical point about the giving of a direction to an undertaking under sections 24 and 25. An "undertaking" is defined in section 19 of the Bill as "a person who is .... authorised or licensed .... to provide a mobile communications service". Clearly, the offences set out in section 29 relate to a person rather than an undertaking. However, the technical rules set out in section 24 for the giving of a direction apply to an undertaking. It strikes me that because of the huge sensitivity in this regard, and the clearly set-out need for confidentiality, it might be useful to require a designated person within an undertaking to be the person with whom the Minister or delegated person makes contact. Perhaps it would be appropriate for the Minister to make regulations to that effect. Given that we are setting up clear lines of criminal liability, it seems important that there should be some clear line of communication between the ministerial officer who physically gives the direction and the person or officer in the undertaking who has the authority to receive it and act upon it.

I will conclude by wondering whether the delegation of ministerial powers provided for in section 28 of the Bill is appropriate in light of the extensive nature of the powers. I have raised some minor points. I welcome the Bill overall, as I think we all do.

5:25 pm

Photo of Jimmy HarteJimmy Harte (Labour)
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I welcome the Minister of State. I would like to raise two issues with regard to this legislation. I welcome the Bill, as I am sure all Members of the House do. Money has been laundered through this country for many years. Senators might be familiar with the Society for Worldwide Interbank Financial Telecommunication, which records details of all transfers of money to the UK or elsewhere in Europe and sends that information to the US. The basis for this is security. People should be aware that SWIFT is required to report to the US authorities any transaction involving the transfer of money for business or personal purposes to another location in Europe. I am not sure exactly what information it gets. The US is outside the EU but it has been given the authority to look at private business. If it stops terrorism, that is fair enough. If information on the financial transactions of all EU citizens that take place outside the citizen's own state is being accumulated by the US Government for some other future purpose, I think that should be monitored. I had understood the EU's view was that it was not particularly happy about these practices, but that information might be out of date. That is my last reading on it and it might not be up to date.

I would also like to comment on the mobile phone technology that is available. Senator Bacik mentioned that there is an all-Ireland dimension to this. As the Minister of State knows, one loses one's O2 or Vodafone coverage as one travels through Northern Ireland. One can end up being covered by Vodafone UK or Orange. When I cross the Border at Lifford, I travel five or six miles before I get Eircom coverage again. There is a buffer of three or four miles on both sides of the Border where someone can use a mobile phone. The chief superintendent or whoever can put down the service in Donegal, which we control. The mobile phone capacity of someone on the other side of the Border might extend six or more miles into the South. I am not sure how far it is as the crow flies. I know from experience that the UK system tends to stop and I pick up the southern system at a certain corner in the road between Lifford and Letterkenny. Does the legislation provide for an all-Ireland dimension?

I am not sure whether the legislation includes an all-Ireland dimension such that the chief superintendent could cut off Vodafone's Irish and UK operations at the one time. Could this be clarified? It is so important that the matter be addressed because it is along the Border that much terrorist activity has taken place and still takes place. It is unlikely there will be a big terrorist event in Kerry, Cork or Waterford. If one occurs, it will most likely be along the Border, from Derry to Dundalk. Perhaps the Minister could clarify what powers the superintendent has in regard to mobile telephone technology. Do the powers of the southern security forces extend to the Thirty-two counties? If not, we must work with the authorities in the North. There should be one 32-county mobile telephone system. Vodafone's UK operation should be the same company as the one in the South. If this were sorted, this Bill would become relevant. It will be irrelevant if we cannot address the Border issue.

5:35 pm

Photo of Trevor Ó ClochartaighTrevor Ó Clochartaigh (Sinn Fein)
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Is maith liom an argóint atá curtha chun cinn ag an Seanadóir Harte i dtaobh cur chuige uile-Éireannach maidir le ceisteanna den chineál seo. Tá Sinn Féin ag tacú leis an reachtaíocht seo mar go gcreidfimid go bhfuil sé fíorthábhachtach go mbeadh na céimeanna cuí in áit le cinntiú nach féidir leis an dream atá ag plé le cúrsaí coiriúlachta an t-airgead atá á dhéanamh acu as sin a thógáil amach agus a chur ina gcuid pócaí féin nó ina gcuid gnóthaí.

Sinn Féin does not believe criminals should be allowed to profit from the misery of local communities. We support actions to ensure that does not happen. It is important to state that such crime does not emerge from nothing. The British Labour Party had a slogan that became commonly used: "Tough on crime, tough on the causes of crime." The second part of that statement is often forgotten. While it is important that we tackle crime as it presents itself, and while we do what we can to ensure criminals are properly punished for their actions, we must consider the obvious point that crime and poverty are very closely related. In particular, a black market emerges when people are struggling to put food on the table. They will take any opportunity to save a few euro. Criminals exploit that demand, and that is wrong. However, the Government needs to consider also that the market would not be as active were it not for the Government continually squeezing the disposable incomes of those least well off in society.

Substantial cuts to front-line services, both statutory and community, in the most disadvantaged and vulnerable communities across the State can only benefit the criminal gangs. Likewise, reductions to the local government fund, which is hurting the ability of local authorities to provide decent services and adequate housing, and the various cuts to social protection payments, have put ordinary citizens in a difficult situation. As I have noted, poverty can breed crime. That fact is well established.

I recognise this is not an issue that is within the purview of this legislation to address but, none the less, I believe the point is worth making. I ask the Minister to bear in mind the consequences of austerity for communities when issues relating to cutbacks and budgets, etc., are discussed by the Cabinet. Likewise, the Government's decisions in recent years on law enforcement have also contributed to communities' sense of unease. Cutting Garda numbers by 10% can only benefit the gangs. Successive Governments have supported a policy of removing resources from and reducing the number of gardaí. We may fall below the unacceptable threshold of 13,000 gardaí. We have seen that the rate of renewal of the Garda fleet of cars is barely managing to keep up with the necessary rate of replacement. We have seen Garda stations closed and hours reduced, particularly in rural areas. Despite this, the reach of the Garda has not greatly improved. This needs to be examined and the Minister needs to ensure that as many recruits as possible come through Templemore in the coming years to replace the numbers lost, although we have no way of recouping the considerable experience lost.

The Bill examines, in particular, how the funds and assets of criminals involved in smuggling can be targeted. This is important. I note the success of the Criminal Assets Bureau in recent years in this regard. It is important to note that this criminal behaviour extends far beyond drugs but that there is now a significant fuel and cigarette smuggling industry. Last year, Retail Ireland reported that 12% of all diesel sold in Ireland was illegal. Nineteen oil laundries were detected and closed, and 690,000 litres of oil were seized. Almost 25% of the Irish cigarette market is sourced from the black market. In 2011, 109 million illegal cigarettes, with a value of €45.9 million, were seized.

I am a little saddened the Minister of State, Deputy O'Dowd, is not present for this part of the debate because the Government needs to provide an answer as regards the fuel truck that was stolen from a barracks. How could this happen in an Army barracks where we put a fuel truck to keep it away from criminal activity? How could criminals break in and steal it under the Army's nose?

The figures we talk about are enormous. Crime affects local economies as business is lost. Nationally, the Exchequer is losing €861 million annually because of illegal black market activity and theft. The retail sector hardly needs further burdens in the context of such high rates, high energy costs and a depressed local economy. Retail Ireland has offered to put money towards the scanners that could be used to detect illegal goods concealed in large containers that are entering our ports. It also noted the fact that counterfeit cigarettes are openly sold at open markets, and that there is a need to deploy Garda resources to police this.

Much very serious criminal behaviour may be happening out of our view in the form of white-collar crime. In recent weeks, we have discussed tax evasion. Irrespective of what one thinks of that, it is worth considering that there is doubtless considerable tax evasion occurring in the form of criminal behaviour. There are many provisions in company law and other related corporate legislation that have barely ever been used simply because the Garda fraud squad remains under-resourced.

As a party, Sinn Féin calls not only for international co-operation on matters such as this but also for a strong all-island policing policy. This is not merely an all-island issue. We need to tackle this internationally and as strongly as possible.

Once again, I emphasise a long-standing proposal of Sinn Féin for which I have yet to hear a sensible rebuttal. Approximately €40 million was seized solely under the proceeds of crime legislation between 2006 and 2010. We have asked the Government to retain this money for community development purposes. The money is separate from the money seized by the Criminal Assets Bureau consequent to Revenue and social welfare fraud. It is the money taken from drug dealers and criminals who are profiting from the communities they are terrorising. What I propose can be done. The current legislation allows for all moneys collected by the Criminal Assets Bureau to be returned to the Exchequer in accordance with the provisions of the Proceeds of Crime Acts 1996 and 2005. There is no reason this should not happen. It would be an equitable compensation for communities plagued by the criminals in question.

On the bringing in of the legislation regarding the mobile telephones, can the Minister of State elaborate on whether there is a real, clear and present threat of a bomb attack during the G8 summit that we should know about? Under the very high-profile EU Presidency, which we have held for the past six months, we have not had these measures introduced. Some might believe this Bill is being rushed through so it will be in place for a potential attack during the G8 summit. Perhaps the Minister of State or one of his officials will be able to tell us about that.

With regard to the mobile telephone issue, is there potential for the misuse of the legislation by criminals? If they wanted the mobile telephone system in an area to go down, could they hoax a terrorist attack of some sort to use the downtime in the telephone network to their own ends? I am not saying that is possible. I appreciate that what is being discussed is a very serious high-level terrorist threat but wonder whether what I describe has been considered? In jurisdictions where the powers proposed are available and have been used, has any activity of the kind I have alluded to occurred?

I would like the Minister of State to consider the issues I have raised. Sinn Féin supports the Bill. Beidh muid ag tacú leis an mBille seo mar go bhfeictear dúinn go bhfuil sé tábhachtach go mbeadh a leithéid ann.

Photo of David NorrisDavid Norris (Independent)
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I welcome the Minister of State, Deputy McGinley, whom I know will transmit to the Minister whatever ideas are brought forward today. I am a little concerned about the infringement of human and civil liberties contained in part 3. I am not sure how imminent any threat brought on by the G8 summit is. I presume that Britain and Northern Ireland leaned on us to introduce this legislation.

What provision, if any, is made for emergency services during a blackout period of six hours or more? How can someone with a medical emergency get in touch with the relevant authorities? Must one light a fire and blow smoke signals? We ought to consider these sorts of eventualities if there is a possibility of introducing these measures.

Ireland, as with every other country, has made a hames of the drug question because it did not confront it honestly.

We allowed sentimentality to get involved. Legalising marijuana and other drugs would strike at the financial core. That will not be done for quite a long time.

Senator Ó Clochartaigh referred to the original CAB legislation. When it was passed - which was as a direct result of the late Tony Gregory and not an initiative from Government - I supported it in the House. I tabled an amendment asking that the money which was bled out of the veins of communities should be ring-fenced and reinvested in facilities for young people. If that is what Senator Ó Clochartaigh was talking about, I agree with him 100%.

Cigarette and fuel smuggling have been referred to. I am concerned about section 3, where orders made by District Court judges under section 17 of the 2010 Act are to be made ex parteand not in public. There is an increasing concentration of power that is not accountable in this country and that worries me.

I would like to know what PEPs are. We are surrounded by PIPs, PEPs, smeeks, smacks, smogs and all the rest, and I do not know who they are. They might be me. I have been politically exposed for most of my political career. I also had my telephone bugged by a previous Government. Who are politically exposed people and why should they be monitored?

My final point concerns banks. As citizens we already suffer. I see no immense appetite for terrorism in this country. I am sure money-laundering is happening. People try to buy prize bonds to support the tottering State. They have to produce fingerprints, dental records, photographic identification, a utility bill and every other bloody thing. I do not know for what they are looking. We are told it is all to do with money-laundering. The same happens in a bank, where one is not allowed to do this, that or the other because of money-laundering. It is a farrago of nonsense to protect the banks from the customers because the one thing they loathe, even more than their staff whom they cannot stand, is the ordinary decent customer.

There is already an impact on people. I have never known it to be so difficult to open a bank account, even in a bank in which one already has an account. One has to produce a lot of information. One can almost forget about buying prize bonds because it is so difficult. Money-laundering is what people are worried about. All I can say is that the laundries seem to be doing remarkably well if there is so much of it around. I have not noticed it, but perhaps I am naive and innocent.

5:45 pm

Photo of Maurice CumminsMaurice Cummins (Fine Gael)
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I welcome the Bill. Money-laundering and terrorist financing are very serious issues, not just in this country but throughout Europe and the world. Any legislation which we introduce to enhance the techniques of the Garda and other agencies in their fight against money-laundering and terrorism is to be welcomed. The Bill seeks to amend the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010. Deficiencies were highlighted in its operation over the past two years, which is why we have to enhance our compliance with FATF standards following the evaluation of the 2010 Act. It consolidated existing legislation on money-laundering and terrorist financing and brought Irish legislation into line with international standards. It transposed the third money laundering Directive 2005/60/EC.

The Bill is important. People have said it is being introduced because of the G8 summit. There are terrorists throughout the length and breadth of the country. Everything should be done to put them in their place. The Garda and security forces should be ahead of the posse. The Bill is about providing better operational tools and a wide range of techniques and powers for financial intelligence units and law enforcement agencies to investigate and prosecute money-laundering and terrorist financing.

In his initial remarks on the Bill the Minister of State outlined the necessity for it. Money-laundering remains a significant risk to the financial sector. There is growing international monitoring of compliance with AML measures, as evidenced in the UK with the HSBC case and in the US. The Central Bank has made it clear that it regards financial crime and money-laundering as key supervisory concerns. We would all agree with that.

The Central Bank has been active in monitoring compliance with the 2010 Act through its themed reviews and inspection programmes. As indicated, it will continue to carry out such inspections. It has been noted that as part of the ongoing inspection programme the Central Bank is likely to continue to focus on firms with weaknesses in their internal controls, possibly taking the view that such weaknesses can increase the risk of the firm being used to handle the proceeds of crime.

Debate adjourned.