APPENDIX
I am grateful for the opportunity to respond to the
report of the Northern Ireland Affairs Select Committee into the
financing of terrorism. I would like to take this opportunity
to express my appreciation for the important work that the committee
does in scrutinizing the Government's efforts to fulfil its responsibilities.
The Government is committed to bringing paramilitary
violence to an end as quickly as possible. In this we have adopted
a dual approach, giving the security forces the necessary support
in their fight against violent and criminal behaviour, whilst
also pursuing the political process, which is offering the kind
of progress towards settlement that violence will never achieve.
The interrelation of paramilitary activity and organised
crime has become increasingly apparent in recent years. The NIO
has a remit to tackle both as part of the Government's commitment
to secure a safe, just and prosperous society in Northern Ireland.
It has therefore taken this opportunity to bring together the
other interested agencies and authorities in order to combine
our efforts in the most effective way. We are determined not to
permit the legacy of terrorism to be a mafia culture of organised
crime.
The Government is pleased that the Select Committee
was able to hear about the important work being done by the Organised
Crime Task Force. We believe that the OCTF has provided an invaluable
basis for cooperative working between the relevant agencies and
authorities in Northern Ireland in addressing the problem of organised
crime.
(c) The Northern Ireland Organised Crime Task
Force Threat Assessment 2001 highlighted:
- money laundering;
- tobacco and fuel smuggling;
- business and social security fraud; and
- intellectual property theft (counterfeiting)
as the highest priority problems for the task
force to address in its first year. These are operationally complex
and potentially very lucrative crimes.
The OCTF Threat Assessment for 2002 (published
in May) has expanded the list of organised criminal activity upon
which it shall be focussing this year. It now includes:
- Money laundering
- Drug dealing
- Extortion and racketeering
- Counterfeiting goods
- Armed robbery and hijacking
- Excise evasion and customs fraud, including oils
fraud, tobacco smuggling and alcohol duty evasion.
The Task Force has also identified a number of other
offences with connections to organised crime which it intends
to examine more closely; these include hitech crime, currency
counterfeiting, vehicle theft to order, illegal immigration and
public sector fraud.
(d) Organised crime has been clearly demonstrated
to be feeding and facilitating Northern Ireland terrorism. We
applaud the fact that the Northern Ireland Office and law enforcement
agencies have identified this threat and publicised it so explicitly.
It is crucial that Government as a whole should recognise this
link: organised crime must be rooted out of both Northern Ireland
and Great Britain.
The UK law enforcement agencies are committed to
the fight against organised crime throughout the country. In Northern
Ireland such crime has been shown to have links to paramilitary
groups, which adds a further dimension to the urgency with which
the authorities are tackling it. Whether or not organised crime
elsewhere in the UK has links with paramilitary and terrorist
organisations, and this cannot be discounted, the Government is
wholeheartedly committed to fighting this pernicious form of crime.
(e) We welcome the action taken by the US
Government to identify and take action against paramilitary groups
in Northern Ireland, as part of the war against terrorism. We
recommend that our Government, in its continuing dialogue with
the US Government, press for further such measures where funds
and fund raising activity for any Northern Ireland paramilitary
organisation can be identified within the United States.
The Government will continue to engage the efforts
of the US Government in identifying and taking action against
fundraising activity for those designated Northern Ireland terrorist
groups.
(h) We hope that the overwhelmingly positive
reports from participants in the Task Force will encourage both
those in the Task Force itself and other agencies to consider
how the benefits of this approach might be extended and shared
more widely.
The Government is keen that lessons be learnt from
the experience of the Organised Crime Task Force in Northern Ireland.
We are conscious that this model has been especially useful in
the context of Northern Ireland and at the start of this new push
against organised crime. We always seek to demonstrate the benefits
of this project to other law enforcement and justice agencies.
However, we shall not become complacent; we shall also continue
to learn from the experiences of other organisations and other
jurisdictions.
(i) We are encouraged to learn of the cooperation
between the Northern Ireland Executive and the Northern Ireland
Office in the publicity campaign about the dangers of counterfeit
goods. We hope that this success will provide the foundation for
many more joint initiatives in the fight against organised crime.
Cooperation between the OCTF and the Northern Ireland
Executive is organised through the Task Force's Public Sector
Subgroup, which comprises officials from OFMDFM and the NIO. The
OFMDFM officials are then able to raise matters with other Northern
Ireland Departments through the Executive's interdepartmental
group. The Government is certain that joint initiatives with the
Northern Ireland Executive, like the campaign about counterfeit
goods, will form an integral part of the Task Force's work.
(k) We agree with Customs & Excise that
publicity campaigns can be more effective than law enforcement
in certain situations, and we urge the Government to give serious
consideration to the role which such campaigns might play in the
future strategy for dealing with specific facets of organised
crime such as fuel laundering and tobacco smuggling.
The Government is determined to use all the tools
at its disposal in the fight against organised crime. This includes
exploring the effectiveness of using publicity campaigns. Such
campaigns can be used to highlight to the public the damage that
organised crimes or specific facets of organised crime do to their
society. Moreover, publicity campaigns can also be used to provide
a deterrent message to those engaged in such activity by underlining
the commitment of Government to tackling them and by emphasizing
the sanctions and penalties.
Customs & Excise already have in place a publicity
campaign as part of its national 'Tackling Tobacco Smuggling'
strategy and is currently developing a publicity campaign as part
of the national strategy to tackle rebated fuels fraud announced
by the Chancellor in the 2002 budget.
(m) Given the importance of intelligence in
countering terrorism and serious and organised crime, the inability
of the NIO to access, or even locate, data on organised crime
when needed is a cause for concern. There is clearly much more
work to be done.
The NIO will not face the same difficulties in collecting
data on organised crime for the period since the establishment
of the OCTF as it has for the period before 2000. The objectives
set for the OCTF in Year Two will be measured according to impact
and activity indicators developed jointly by the Task Force partners.
There will be consistency and clarity in the preparation of statistical
evidence across the different authorities and agencies.
As your report highlighted, PSNI has established
a central statistical collection point, which will provide the
principal source of data for external requests. This resource
will also ensure that data from different Task Force partners
is comparable.
(n) We recommend that the NIO and the Task
Force jointly consider the development of an information strategy.
The OCTF is supported by an Analysis and Assessment
Subgroup, which includes representatives from the PSNI, HM Customs
& Excise, the NIO and NCIS. The subgroup has agreed to discuss
a strategic informationsharing framework for the Task Force,
including datasharing protocols for the contributory bodies.
This work is ongoing.
At an operational level, internal restructuring of
the PSNI's crime and intelligence capability will result in the
creation of a specific Serious and Organised Crime Desk within
the intelligence structures. The Analysis and Assessment Subgroup
has been kept informed of, and has encouraged, this development.
The new structures should be fully in place in late 2002.
(o) We believe that the consistent publication
of results would do much to convince the public of the value of
the Task Force's work.
We agree with the Select Committee that the publication
of the Task Force's results is an important part of the task ahead
it reminds people of the seriousness and invidiousness
of organised crime as well as pointing out the value of the Task
Force's work.
The publication of the annual Threat Assessment plays
the central role in making results available. The launch of this
year's Threat Assessment was well covered by the media and we
aim to have the same, if not a greater, impact next year. The
OCTF also publishes a quarterly newsletter called Response with
an update on achievements.
We want to make sure that the public does not count
the Task Force's impact solely in terms of the volume of goods
seized or the number of arrests, important as these are. The impact
of the Task Force also needs to be gauged in terms of the disruption
of criminal gangs, the prosecution of key figures and the overall
reduction in the amount of organised crime going on. This kind
of impact is more clearly illustrated in news reports than in
charts or tables of figures. The PSNI and HM Customs & Excise
will continue to flag up successes as and when they occur and
when those organisations feel it appropriate. The Task Force's
own Impact Indicators include the 'number of press bulletins or
interviews to inform the public about developments in the fight
against organised crime'.
The OCTF website was launched on 23 September, containing
all the publicly available information about the OCTF's work (www.octf.gov.uk).
(p) It is imperative that the police and other
agencies engaged in tackling paramilitary or criminal activity
have the resources and the support that they need. To ask them
to make a choice between fighting domestic terrorism, or international
terrorism, or organised and other crime which affects people directly
in their daily lives is wrong.
(q) We urge HM Treasury to recognise that
investing in action, not only against organised crime, but against
terrorism in Northern Ireland and Great Britain, would provide
a strong financial return to the Exchequer and contribute to the
establishment of a more honest and stable society. We call on
Government to consider sympathetically the cases presented by
the police services and other law enforcement agencies concerning
the resources they need to tackle such crimes.
The Government is committed to tackling organised
crime in Northern Ireland as an integral part of its responsibilities
within the Belfast Agreement. The NIO will dedicate the resources
necessary to support the Organised Crime Task Force from within
the budget available to it. At the same time, the Government is
committed to ensuring the Chief Constable has all the resources
he needs to deliver an effective policing service; the Chief Constable
is responsible for the deployment of the resources he has according
to operational need. Last year £642m was devoted to maintaining
a daytoday police service in Northern Ireland. This
is on average 2 1/2 times more than anywhere else in the UK and
reflects the demands associated with fighting terrorist and other
crime. The Government as a whole is addressing the scourge of
organised crime throughout the UK.
(r) We find the picture of support for potential
witnesses presented to us by the PSNI very disappointing. The
level of personal sacrifice required of the individual, as it
was described to us, is unreasonable; it makes the individual
and potentially his or her family victims twice over. It is not
surprising that so few are currently willing to make a stand.
(s) We believe that the Government, in conjunction
with the Executive where appropriate, must look again at the type
and level of resources it makes available to support potential
witnesses before, during, and after cases which go to trial.
The Government recognizes the difficulties faced
by victims of extortion in bringing their cases to the notice
of the authorities. PSNI has agreed to lead discussion within
the Legal Subgroup of the OCTF (which comprises representatives
from the NIO, PSNI, and HM Customs & Excise) on the application
of witness protection schemes to the victims of extortion. In
response to work begun by the PSNI, this group will be looking
carefully at the existing provisions for the protection of victims
who are prepared to inform the authorities, and will consider
what improvements may be made. The work that my international
adviser on Organised Crime, Prof. Ron Goldstock, has been doing
on securing crosscommunity support will also make a contribution
to this discussion.
(u) We recommend that the Government ensure
that the judiciary in Northern Ireland are fully apprised of the
strong links which have now been established between paramilitary
organisations, serious and organised crime and the range of offences
which provide these groups and individuals with their income.
The NIO was glad to have had the opportunity to make
a presentation on the work of the OCTF to the Judicial Studies
Board at the beginning of last year, and we were gratified by
the appreciative response. Although conscious of the pressures
upon this forum, we will always welcome an invitation to address
the JSB again. We also believe that the high profile of the Task
Force's work in the media and the publicity that it enjoys are
effective means of informing the judiciary about the nature and
the seriousness of the organised crime problem in Northern Ireland.
It has been suggested in addition that an OCTF conference in mind
for early next Summer might include a seminar specifically prepared
for an audience including members of the judiciary.
In a related move, I have recently set up a Law and
Order Action Group, in which I am joined by the Lord Chancellor
and the Attorney General. This group will be looking at the whole
range of law and order issues in Northern Ireland today, and no
doubt organised crime and paramilitary funding will feature.
(v) We draw the suggestion by the PSNI of
an aggravated offence in relation to extortion to the attention
of the Northern Ireland Office.
(w) We believe that the raising of the maximum
tariff for extortion and other crimes linked to paramilitary fundraising,
combined with the greater exercise of the courts' powers in such
cases, would significantly increase the deterrent effect on paramilitaries
and other serious criminals. We recommend that the Government
consult the law enforcement agencies about the evidence that they
and others have presented to us, and explore how the relevant
statutes can be most effectively updated.
The PSNI has agreed to lead discussion within the
Legal Subgroup of the OCTF on legislation surrounding extortion
offences, including the suggestion of an aggravated offence and
the possibility of raising the tariff. If there is a clear case
for updating the relevant statutes, the Government will take the
lead.
(y) We are pleased that the particular nature
of the problems in Northern Ireland has been recognised in the
decision to appoint an Assistant Director of the Agency with responsibility
for operations in Northern Ireland.
The Government welcomes the Committee's support for
the requirement in the Proceeds of Crime Act for the Director
of the Assets Recovery Agency to appoint an Assistant Director
for Northern Ireland.
(z) There is little to be gained, and far
more to lose, from proceeding with assets recovery on the limited
basis indicated by the Government in Northern Ireland.
(aa) There are high expectations on the part
of politicians, law enforcement agencies, the general public and
(presumably) the criminals themselves, that the Assets Recovery
Agency will have a significant impact on the problem of organised
and serious crime. On the basis of the evidence we have heard,
those expectations are unlikely to be met so far as Northern Ireland
is concerned.
(bb) We call on the Government to reassess
its allocation of resources to the Assets Recovery Agency in order
that more resources can be allocated to Northern Ireland. We believe
that it is currently underresourced for the task required,
and we further believe that the establishment of its reputation
as a threat to criminality in its first few years will be crucial
to its success. We therefore recommend that the Government make
forward provision now in its spending plans for the substantial
expansion of the Agency as its work develops.
(cc) We further recommend that in reassessing
the allocation of resources to the Assets Recovery Agency, the
Government directly consult the agencies represented on the Organised
Crime Task Force for Northern Ireland about the level of resources
they believe will be necessary for the Agency to be effective
in Northern Ireland.
(ff) A distinct minimum threshold for Assets
Recovery Agency activity in Northern Ireland, which reflects local
circumstances, must be set so that the Agency can be effective
in that particularly difficult situation. We recommend that the
Assistant Director of the Agency for Northern Ireland be given
the power to determine this threshold, having consulted with the
local law enforcement agencies and the Northern Ireland Office.
The Government notes the Committee's view that a
branch of 10 staff would be too small to have a worthwhile impact
in Northern Ireland. The Government does not agree that it makes
sense to draw a simple comparison between the size of the Agency's
branch in Northern Ireland, serving a population of 1.7 million,
and that of the Criminal Assets Bureau in Dublin (45 staff for
a population of 3.8 million). A proper comparison must take account
of the whole asset recovery capacity that will be available to
Northern Ireland and the fact that the two bodies have different
responsibilities. For example, the Agency's Northern Ireland branch
will not be separate and selfcontained. Rather, it will
form part of the Agency as a whole and will therefore be able
to draw on that support. It is also possible that some of the
Agency's work on Northern Ireland cases would be handled from
London, e.g. for security reasons, so the number of staff based
in Northern Ireland will not necessarily be proportional to the
number of cases originating there. Moreover, while the Agency
will have sole use of the civil recovery and enhanced taxation
powers available in the Proceeds of Crime Act, the law enforcement
and prosecution agencies will continue to be major players in
the use of the confiscation powers (which will be greatly enhanced
when the Act comes into force).
No final decision has been taken on either the size
of the Agency overall or of the Northern Ireland branch; the Government
will keep the Committee's concern in mind as work on establishing
the Agency progresses. The Government will ensure that the Agency,
including its Northern Ireland branch, has the staff and resources
that it needs in order to make the required impact. It is expected
that the work programme of the Agency will include regular consultation
with stakeholder organisations, including those represented on
the Organised Crime Task Force for Northern Ireland (as called
for by the Committee in conclusion cc).
(dd) We recommend that the Government consider
the possibility of enabling certain staff seconded to the Assets
Recovery Agency to maintain access to their sponsoring organisation's
databases.
Under section 436 of the Act, organisations that
have been designated as "permitted persons" may disclose
information to the Director of the Assets Recovery Agency for
him to use in the exercise of his functions. Such a disclosure
must not contravene the Data Protection Act 1998 or Part 1 of
the Regulation of Investigatory Powers Act 2000, but, that apart,
the Act provides that such a disclosure is not to be taken to
breach any restriction on the disclosure of information however
imposed. The Commissioners of Inland Revenue, and of Customs and
Excise, are permitted to delegate to an Inland Revenue official
or to a customs officer (as appropriate) the power to authorise
disclosures to the Director. The Government considers that these
provisions will enable the Director to have access to all the
information the Agency requires in order to perform its functions
effectively.
The practical arrangements for collaboration between
the Agency and its stakeholder organisations (including access
to databases) will ultimately be for the Director to consider
in discussion with his or her counterparts.
(ee) We welcome the establishment of the Recovered
Assets Fund, which provides a means to return the proceeds of
crime to the community whilst protecting the integrity of the
confiscation process. We recommend that detailed consideration
be given to the ways in which such projects might be publicly
associated with assets recovery work in order to foster support
for this new approach to tackling crime. In order to safeguard
the reputation of the Fund and also its links with the assets
recovery process, we also recommend that care be taken to ensure
grants provided by the Fund are appropriately spent.
The Government agrees that it is important to publicise
the benefits which communities are deriving from projects financed
by the Fund and will continue to make every effort to do so.
The rules and conditions governing the disbursement
of grant under the Fund include audit arrangements to ensure proper,
efficient and effective use of public money, and arrangements
for independent monitoring and evaluation of results.
(gg) We appreciate the very positive response
from the Government towards our suggestion that staff of the Assets
Recovery Agency should receive some form of statutory protection
of their identities. We believe that staff of the Agency will
be able to work far more effectively and safely because of it.
The Government welcomes the Committee's support for
the pseudonym provisions in section 449 of the Proceeds of Crime
Act for the Director of the Assets Recovery Agency to authorise
his staff to use pseudonyms in appropriate circumstances.
I hope that our response has reassured you of the
Government's commitment to tackling the combined threat of terrorism
and organised crime, and that they go some way to answering the
concerns of the Committee.
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