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Home > Dail Eireann debate. Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Bill 2013: Second Stage

[Oireachtas] Dail Eireann debate. Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Bill 2013: Second Stage. (18 Apr 2013)

External website: http://oireachtasdebates.oireachtas.ie/Debates%20A...


[Deputy Peter Fitzpatrick:] Due to the underground nature of money laundering, it is not possible to give precise figures regarding the extent of the activity. According to a 2011 report by the United Nations Office on Drugs and Crime, in 2009 criminals and drug traffickers in particular may have laundered approximately $1.6 trillion or 2.7% of global GDP. This figure is consistent with the 2% to 5% range previously established by the International Monetary Fund to estimate the scale of money laundering. The process of money laundering involves three stages, the first of which is the initial or placement stage, whereby the illegal proceeds of crime are introduced into the financial system. This may be done by breaking up large amounts of cash into small less conspicuous sums that are then deposited into a bank account or by purchasing a series of monetary instruments such as cheques or money orders that are then collected and deposited into accounts at other locations. The second or layering stage involves a series of conversions or movements of funds to distance them from their original sources. This may be done by the purchase and sales of investment instruments, by wiring the funds through a series of accounts at different banks across the globe or by disguising the transfer as payments for goods or services, which may give them a legitimate appearance. The third or integration stage involves the re-entering the funds into the legitimate economy. This may be done by investment of the fund into, for example, real estate, luxury assets or business ventures. The current definition of "vocational transaction" provides that once the transaction or series of transactions exceed €15,000, obligations such as customer due diligence apply. Section 2 of the Bill amends this and lowers the monetary threshold to €2,000 in the case of a private member gaming club and €1,000 for wire transfers of funds. In all other cases, the definition applies when an amount of €15,000 is reached. 

Deputy Finian McGrath: I thank the Leas-Cheann Comhairle for the opportunity of speaking on this new legislation. I welcome this important and urgent debate, as it is highly relevant to the modern world and, in particular, to the major crisis that exists both in Ireland and across the European Union, as well as internationally. In recent days, Members have seen the horrific effects on innocent people in Boston, as well as the slaughter of ten innocent children in Afghanistan two weeks ago. It is important to focus first on the victims of these heinous crimes. Blowing people to bits in Boston, Afghanistan, the West Bank, Omagh, Dublin or Monaghan should never be an option and should never be acceptable in any democratic society, nationally or internationally. The bottom line is it is completely unacceptable and Members should agree with this core principle. This is known all too well in this country and I commend all those who started our own peace process, faced up to the reality and used their skills in conflict resolution. Members should never forget and all should be vigilant to prevent it happening in the future. One should never take the peace process in Ireland for granted and all Members of the Oireachtas should be on their guard in respect of this issue.
 
As for the legislation before Members, I was absolutely shocked and horrified when I saw some of the figures illustrating the scale of the problem. Due to the underground nature of money laundering, it is not possible to give exact figures in respect of the extent of the activity. However, according to a report produced relatively recently, that is, in 2011, by the United Nations Office on Drugs and Crime, in 2009 criminals and drug traffickers in particular may have laundered approximately $1.6 trillion or 2.7% of global GDP. This figure of $1.6 trillion internationally is a lot of money on which many countries could survive, particularly during the current economic crisis. Moreover, the figure is consistent with the 2% to 5% range previously established by the International Monetary Fund to estimate the scale of money laundering. It is important to consider the scale of the crisis internationally. When one then turns to the details of money laundering, it is the process whereby the proceeds of crime are disguised to conceal their illicit origins. The financing of terrorism is the provision of financial support to those who engage in, encourage or plan terrorism, because this all costs money. According to the World Bank, money launderers send illicit funds through legal channels to conceal their criminal origins, while those who finance terrorism transfer funds that may be legal or illicit in origin in such a way as to conceal the source and ultimate use, which is to support terrorism. The Financial Action Task Force, which is an intergovernmental body established in 1989 by the G7 group of countries to combat money-laundering, explains the concept of money-laundering in the following terms. When a criminal activity generates substantial profits, the individual or group involved must find a way to control the funds without attracting attention to the underlying activity or to those involved. Criminals do this by disguising the sources, changing the form and moving the funds from place to place, where they are less likely to attract attention. Again, I will focus on the details in respect of this aspect of the legislation.
 
It is important to get the facts right before having the balance and discussion. When one discusses the issue of money laundering, one must also keep a close eye on its close link, that is, to white-collar crime, because many so-called "respectable" individuals and businesses are directly involved in such activity. This is not acceptable and a justice system is required that ensures those involved in white-collar crime are prosecuted, charged and hounded. In addition, one must also accept the reality that people and states are involved in these issues. I saw an interesting programme this week broadcast by RTE, which dealt with Liberia, an extremely damaged country in Africa and the ongoing scandal there regarding diamonds. It showed how all the diamonds are being shipped out legally, while people are living in muck and dirt without toilets or water. Moreover, massive wealth is being generated there in this regard. Consequently, I believe there also is a political dimension to this debate, which is it is not simply or exclusively about the illegal stuff, as some of the activities that are taking place in states or internationally are unacceptable, full stop.
 
It reminds me of the time in the 1980s when the merits of the Criminal Assets Bureau were being debated and I commend all those who were directly involved in it. I also will use this opportunity to pay tribute to my old colleague and friend, the late Tony Gregory, who was one of those who initially pushed for its establishment during the heroin crisis in the north inner city during the 1980s. He wanted the money confiscated from the drug gangs and drug lords to be pumped back into the disadvantaged communities. Tony was ahead of his time and most people who take an objective view on this issue would commend him and praise them. Consequently, it is fitting that Members honour him today in this debate when discussing these issues. I will go one step further in this regard. At present, a beautiful new bridge is under construction near the centre of the city and I propose it be named the Gregory Bridge, after Tony Gregory and in his honour. Moreover, this is related to the issue under discussion.
 
In addition, casinos must also be closely monitored when it comes to money-laundering. Nationally and internationally, there are casinos into which much of this money is dumped. Similarly, there are bookkeepers, bookmakers and others who have similar links and Members must be very careful of such groups. I am familiar with this issue from my experience of dealing with issues in my own constituency, where the drug gangs run parts of the city. Sadly, I refer to the amount of money that is made, the amount of money that is ripped off and the massive intimidation that takes place in communities. Members must stand up for those who are suffering at the hands of such people. Their money must be confiscated and I emphasise this money must be put into the most disadvantaged areas. One cannot have a situation in which drug gangs, drug leaders and people like that are amassing amounts of money, are getting involved in shootings and killings from which people walk scot free, as well as intimidating entire communities. This is the sad reality for many people in the Ireland of 2013.
 
A small point, which I regularly raise in this Chamber and for which I am regularly hammered and criticised, concerns the debate on cigarettes. There is a very significant trade in illegal cigarettes. I have met shopkeepers and people with small and medium-sized businesses on the front line who tell me that by not taking action regarding illegal cigarettes, €600 million per year is being lost in tax revenue. I note that this week the figure of €300 million is being discussed in the context of the Croke Park II deal and the amount of revenue that must be found by the end of July.

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