Committee Reports > List of Committees > Dáil > 1985 > Select Committee on Criminal Lawlessness and Vandalism > Report No. 06 - Confiscation of assets illegally acquired through drug trafficking

DÁIL ÉIREANN

An Seasca Tuarascáil ón Roghchoiste um Choireacht, Aindlí agus Loitiméireacht

Coigistiú sócmhainí a fhaightear go neamhdhleathach trí mhangaireacht drugaí

Sixth Report of Select Committee on Crime, Lawlessness and Vandalism

Confiscation of assets illegally acquired through drug trafficking

Membership of the Committee

Dáil Deputies

Michael Woods - Chairman

Gay Mitchell - Vice Chairman

Clerk to the Committee: F.J. Brady.

2. Introduction

2.1The Committee consider that illegal drugs and the consequent drug-related crime is one of the major target areas for anybody interested in coming to grips with the serious crime problem facing the community.

2.2When we considered this topic we decided that the first step should be to examine the controls on the illegal importation of drugs and we dealt with this topic in our Second Report (published July 1984): The role of Officers of Customs and Excise in controlling the supply of illegal drugs. We are glad to be able to report that most of our recommendations in that Report have, in fact, been implemented in the Mis-Use of Drugs Act 1984 (July 1984). The major recommendation still outstanding is the establishment of a Drugs Unit within the Customs Service. We hope that further consideration will be given to this recommendation and we look forward to its implementation at an early date.

2.3Having dealt with controls at the point of importation, we consider that the next step is to take effective action against those persons engaged in the organisation and control of drug trafficking operations.

2.4The Committee recognise that drug trafficking is the product of addiction and human greed. It is the latter which comes within the ambit of law enforcement and which we are concerned with at this stage. We consider that if the supply of illegal drugs can be curtailed then the suffering and deprivation and consequent drug-related crime can be controlled. The next major step in the fight against drug abuse must be effective action against the individuals and groups engaged in organised criminal activity involving drugs.

2.5The Committee had discussions in early December with senior Garda Officers about a number of topics including drug crimes. We were very pleased to learn that, to date, 1,870 Gardai of all ranks have undergone a week-long in-service drug training course. These courses were commenced in 1981 and have proved very successful. In addition, all new recruits also receive basic training regarding illegal drugs.

2.6A measure of the success of the drug training courses is that 70% of drug seizures in the first 9 months of 1984 were made by uniformed members of the Force rather than by members of the Drug Squad. In the same period there has been a 21% reduction in seizures of drugs as compared with the same period last year and we were advised that this may reflect a reduction in the availability of drugs.

2.7The Committee are pleased to note the very significant progress being made by the Garda authorities. Not enough attention is given to the practical steps being taken by the Gardai to tackle the problem and we are anxious to express our appreciation of the progress made and we hope that the public and the media will take note of these developments.

3. The need to confiscate illegally-acquired assets

3.1The Committee consider that effective control of drug abuse must include the introduction of measures to trace and to confiscate assets illegally acquired from crimes involving drugs.

3.2The Committee are of the opinion that criminals should not profit from crime. While this is acceptable as a general statement of policy, there are practical difficulties in any attempt to apply this policy to all criminal activity. We decided to confine ourselves to the question of implementing this policy in relation to drug-related crime where the health and welfare of countless innocent persons is put in jeopardy in order to reap very substantial profits. In such cases, we consider that it is essential that the criminals be deprived of the proceeds, whether direct or indirect, of this category of crime.

3.3The growth and power of criminal groups or families depends, to a large extent, on how successful a certain nucleus of people are in “earning”, securing and deploying the financial proceeds of their illegal activities. These people seem to remain aloof from actual criminal activity and the imprisonment of some individuals or the loss of a particular shipment of illegal drugs has little effect on the organisation. A shipment of drugs is split between a number of couriers to minimise the chances of being caught. The current selling price of heroin in Pakistan is around £3,000 per kilo while the street price in Dublin is about £300 per gram i.e. £300,000 per kilo. An initial investment of £3,000 will yield a potential return of £300,000 gross. With organisation and money at their disposal, the financiers can afford to lose couriers without it having a substantial effect on their activities. In addition, the financiers will tend, where possible, to use persons whose background is such that they are unlikely to attract attention from law-enforcement authorities.

3.4If a financier or member of a group is imprisoned, this is unlikely to have a significant impact on the overall organisation. The money and the consequent power is available to others to run the organisation. A person can spend say five to eight years in prison and emerge a very wealthy person. The scale of the profits to be made from drug smuggling is such that the risks are well worth taking. It is to eliminate this illegally acquired wealth that the Committee are considering this topic and making recommendations. The Committee consider that, as money and the accumulation of money, resources and assets underpin the groups of criminals who are engaged in the illegal drug trade, the most effective action against them will be achieved by attacking and eliminating the financial basis of their activities.

4. Forfeiture and confiscation of assets illegally acquired through drug trafficking

Forfeiture

4.1Forfeiture is where a person loses some property, right, privilege or benefit, in consequence of having done or omitted to do a certain act. In general terms, forfeiture will also involve the process of search and seizure. Provisions exist in our legislation for search and seizure followed by forfeiture, if the case is proven by the prosecution in court.

4.2Search and seizure are most needed where accused persons still have the proceeds of a crime in their possession. A conviction, which is obtained after the proceeds have been disposed of, will not meet our objective which is to deprive criminals of assets illegally acquired. Seizure is the process whereby before trial, property may be seized and preserved until the trial for the purpose of producing evidence or for restoration to its legal owner or for forfeiture at the trial. In so far as the Committee is aware, forfeiture is confined to a particular crime and the goods are before the court at the time of the trial following their seizure.

4.3The Committee are convinced that there is a need for a more widespread power to be made available to the law enforcement agencies to enable them to tackle the problem of drug trafficking. This could be achieved by the confiscation of assets.

Confiscation

4.4We would like to make it clear that we are primarily concerned with confiscation of assets arising from drug trafficking activities. It may be that when some experience is gained in this area, the Government of the day will decide to extend the scope of confiscation. We would have no objection in principle to such a move.

4.5Confiscation is the term used by the Committee to encompass the whole procedure including the investigation and tracing of property illegally acquired in the first instance up to the point where it is actually confiscated by the State on foot of a court order. It does not necessitate that a person has been found guilty of any criminal offence. It applies, rather, under the civil law, to any person who is suspected by the law enforcement agencies of being engaged in drug trafficking and who is unable to prove that he acquired his assets through legitimate means.

4.6Confiscation should be used where illegal transactions in drug trafficking yield a profit. While it may also be used at a later date to cover other transactions this power should be confined to serious offences.

4.7In theory, confiscation could be achieved by simply imposing a fine but the Committee consider this to be unsatisfactory. One very real objection to this is that the defendant may, even if a reasonable fine is imposed, choose not to pay, preferring to go to prison with the expectation of having the money available to him on his release.

4.8It is essential that detailed procedures be prepared in connection with any power to confiscate assets acquired, directly or indirectly, by illegal means. We have not the staff resources available to us to enable us to examine these procedures in detail. We consider that this aspect should be investigated by the Government in the context of the preparation of legislation to give effect to our recommendation.

4.9The Select Committee considers that the process of confiscation should be dealt with preferably by an administrative process with a right of appeal to the High Court or, alternatively, in the civil courts. Once the State has proved, on the balance of probabilities that the assets were illegally acquired, the onus should shift to the defendant to prove beyond reasonable doubt that the property was not obtained as a result, direct or indirect, of criminal activity. Before a procedure could be commenced by way of an administrative process, it may be necessary to bring the case before a District Justice who would be empowered to authorise such a process or to refuse it if there were no reasonable grounds.

4.10In considering the question of confiscation the Committee had regard to certain difficulties that might arise, namely,

(i)some persons may object to the principle of confiscation. There will be persons who feel that it is wrong to confiscate property after the offender has been sentenced under the criminal law. This is especially possible where attempts are made to confiscate property from a person who has not been found guilty of any crime,

(ii)the position of bona fide trader and third parties who may be involved only on the periphery needs to be protected in legislation which deals with this topic.

5. International position on confiscation

5.1It is only in recent years that consideration has been given to the question of confiscation in the international community. A number of countries have some legislation dealing with this topic but it appears that the scope and effectiveness of such legislation leaves considerable room for improvement. A short note on the position in other countries is contained in Appendix B.

5.2The Committee have noted that the United Kingdom Home Secretary has recently announced his Government’s intention to introduce provisions for the confiscation of assets of drug smugglers and dealers in a new Criminal Justice Bill. Legislation has recently been passed by the United States Congress and Senate dealing with this specific topic.

5.3Apart from the activities underway in individual countries, there is a real need for international co-operation in a concerted effort to stamp out drug trafficking offences which span national boundaries. Unless very significant steps are taken these difficulties will persist and drug dealers will be able to maintain their ill-gotten gains in foreign jurisdictions. Tax havens, the maintaining of secret bank accounts and the free movement of capital add to the problem of lack of international co-operation. The Government should use its diplomatic and other resources to endeavour to improve the level of co-operation so as to enable this problem to be tackled effectively.

5.4There are some examples of how international co-operation could be improved. In a recent case in England some of the proceeds had been traced to Switzerland where the cantonal government laid claim to them under the provisions of local law which provides for the forfeiture of property acquired in breach of Swizz criminal law or that of any other country. Canada has a similar provisions.

6. Recommendations of the Committee

6.1Drug trafficking is big business organised to earn very substantial profits. The tendency has been to seize illegal drugs but the profits made have been largely ignored. So long as these profits go untouched, occasional losses can be tolerated and quickly replaced. even in circumstances where a leader of a group is imprisoned, his colleagues are free to continue the business using the profits already earned. The Committee are convinced that the risk of imprisonment is an acceptable risk so long as the money acquired is untouched. If we are serious about the problem, and we as members of the Select Committee on Crime, Lawlessness and Vandalism are very concerned, then effective action must be taken to confiscate the assets of drug dealers.

6.2The Revenue Commissioners have always adopted a policy of charging all profits or gains, whether arising from a lawful or unlawful activity, for income tax purposes. A couple of cases arose in recent years where individuals appealed assessments on the grounds that profits were acquired by unlawful means. This lead to the inclusion of a provision in the 1983 Finance Act (Section 19) that any question of whether profits or gains arose from an unknown or unlawful source shall be disregarded in determining the chargeability of tax of the said profits or gains. While this is a very welcome provision, the Committee are anxious to take this further and confiscate the ill-gotton gains/goods themselves.

6.3The Select Committee recommend:

(i)the immediate introduction of legislation to enable the State to confiscate assets (subject to the provisions of paragraph 6.4 overleaf) of drug traffickers which are acquired as a result of illegal drug activity,

(ii)any action for the confiscation of assets should be by way of an administrative process with a right of appeal to the High Court or, alternatively, by legal action in civil law. The onus should be placed on the defendant to prove beyond reasonable doubt that the assets were lawfully acquired. The prior approval of a District Justice may be necessary before commencing any administrative process for confiscation,

(iii)a special investigation unit should be established to examine and trace assets of suspected drug dealers. This unit should consist of representatives of the Garda Drug Squad, Customs Investigation Branch (and when the Customs Drug Unit is established, from that Unit), Garda Fraud Squad and the Revenue Commissioners. In addition it should have an accountant and such other specialised or professional persons as are necessary. While we envisage it being funded initially by the State, it should afterwards be funded from the proceeds of confiscation orders and expanded as necessary,

(iv)the Government should undertake to seek to improve international co-operation aimed at preventing drug dealers from escaping the effects of such legislation by transferring their assets abroad. In this context, consideration should also be given to a common European approach to this problem.

6.4In considering the question of assets to be confiscated, we are of the opinion that the family home should be excluded. A definition of family home is contained in the Family Home Protection Act 1976 (see Appendix C). This, however, may be too broad a definition. What we are concerned with ensuring is that a spouse and children would continue to have an adequate family home. It may also be desirable to exclude household items below, say, £1,000. Our aim is to attack the more valuable property and possessions acquired as a result of unlawful activities including, for example, a pub, land, race-horses or valuable paintings or jewellery.

7. Acknowledgement

7.1The Committee wishes to acknowledge the assistance given by its Clerk, Mr. F.J. Brady in the preparation of this Report and of its Secretary, Miss G. Murphy.

7.2We appreciate the interest shown in our work in this area by Dr. Desmond Corrigan F.P.S.I., School of Pharmacy, Trinity College and thank him for his assistance.

7.3The co-operation of the Garda Commissioner in allowing Deputy Commissioner J.P. McMahon and Chief Superintendent T. O’Reilly meet us and discuss the drug problem is very much appreciated. These two Officers provided us with details of the practical operations of the Force for which we are grateful.

Reports of the Select Committee:-

1.Neighbourhood Watch as a Scheme for Community Involvement in Policing - 27th March 1984.

2.The role of Officers of Customs and Excise in controlling the supply of illegal drugs - 3rd July 1984.

3.The decriminalisation of certain offences under the Vagrancy Acts - 17th October 1984.

4.Controls on the private security industry - 30th October 1984.

5.Report on a visit to Scotland Yard - 30th October 1984.

__________________________

Michael Woods

Chairman