Memorandum submitted by Police Service
Northern Ireland
INTRODUCTION
Northern Ireland remains in a period of political
transition. While much has been achieved terrorism has not (yet)
gone away and major public order issues remain unresolved. Policing
in Northern Ireland must retain the flexibility and capability
to protect that society wherever transition may take it and respond
to a number of challenges, not least the threat posed by serious
and organised crime.
The control structures which sustain terrorism
remain largely intact and can equally be applied to serious and
organised crime. This represents a significant threat to the stability
of Northern Ireland and potentially hinders the transition to
a responsible civil society. Managing the legacy of terrorism
requires a multi-agency approach driven by government in order
to identify the scale and nature of organised crime in Northern
Ireland and to respond to it. The Police Service of Northern Ireland
(PSNI) is fully committed to confronting the illegal financial
activities of organised crime groups in Northern Ireland, many
of which remain closely linked to paramilitary organisations.
BACKGROUND—THE
INVESTIGATION OF
TERRORIST FINANCE
In 1988, following a request for assistance
from the Royal Ulster Constabulary (RUC) to the then Secretary
of State for Northern Ireland, Rt Hon Tom King MP, the NIO established
a specialised unit, the Anti-Racketeering Unit (ARU) with a remit
to confront paramilitary fundraising and reduce the flow of funds
to terrorist organisations. This unit worked closely with the
RUC, who provided the necessary operational support and led on
investigative issues. In 1993 the ARU was renamed the Terrorist
Finance Unit (TFU). In 1996, following a fundamental review of
the functions of the NIO, a joint NIO/RUC working party was formed
to consider the work and future of the TFU. On conclusion of this
process, responsibility for investigating terrorist finance passed
formally to the RUC on the grounds that this would provide greater
operational focus for the work of the unit. At the same time,
the work of the TFU was expanded to cover other areas including
non-terrorist financial crime activity. To reflect these changes,
it was renamed the Financial Crime Services Unit (FCSU).
In 1999, following an internal RUC review, a
specialised unit within RUC Special Branch assumed responsibility
for intelligence gathering in respect of the financial activities
of paramilitary organisations. Other research and analytical functions
of the FCSU were retained and enhanced through the establishment
of the RUC Analysis Centre which now provides a Service wide analytical
service, covering all aspects of policing in Northern Ireland.
ORGANISED CRIME
TASK FORCE
The PSNI is a full and active partner in the
government's Organised Crime Task Force (OCTF) and takes the lead
on a number of key areas, including the 2001-02 strategic priority
areas of drugs, extortion and money laundering. Recently a restructuring
of Crime Department saw the appointment of a Detective Superintendent
as Organised Crime Co-ordinator to act as a single point of contact
for OCTF and partner agencies and to co-ordinate within PSNI resources
and activity in respect of serious and organised crime.
Work is ongoing regarding the development of
information flows within and between agencies and the identification
of lead agencies. Moreover, work has been undertaken to establish
a number of expert groups to address key crime areas, both as
an OCTF and PSNI issue.
The raising of finance by paramilitary organisations
is largely being addressed through the OCTF. The rationale for
this development is based on the fact that there has, in recent
years, been a migration from politically motivated crime to commodity
based criminal enterprises. Indeed, paramilitary groups are now
routinely operating alongside other criminals in a common cause
and their activities more appropriately fall within the remit
of organised crime.
The Analysis Centre has to date played a key
role in the work of the OCTF and is responsible for producing
the annual assessment of the threat to Northern Ireland Society
from serious and organised crime. Enhanced co-ordination of Northern
Ireland law enforcement agencies in the investigation of this
type of crime is fundamental to effective enforcement activity.
This includes sharing of intelligence and good practice; the avoidance
of duplication of effort, and the provision of appropriate expertise
and support to the OCTF. It is anticipated that as these co-ordination
structures develop, the work of the Analysis Centre in this field
will increase significantly and there will be a greater requirement
for strategic and tactical analysis of organised crime, its links
with Great Britain and internationally and the identification
of intelligence leads for exploitation in the operational field.
TERRORIST FINANCE
This report summarises current and historical
reporting on paramilitary fundraising. One of the greatest problems
facing paramilitary groups in Northern Ireland has been financing
their activities and they have traditionally engaged in a wide
range of criminal activities to generate funds.
It is possible that the transition from terrorism
to crime has led to a decrease in leadership control of membership.
The fact that volunteers' activities now entail money rather than
terrorist attacks mean they are likely to want to keep a cut for
themselves. It is very difficult to assess how much of the profits
go to the individual and how much to the organisation. It is hard
to assess the state of each group's finances but likely that groups
on ceasefire require considerably less money to function. If volunteers
are making money through crime, the organisation is under less
obligation to pay their "wages".
It is also worth noting that the events in the
US on 11 September are likely to reduce republican income from
North America and elsewhere overseas.
Following is a list of key crime areas that
have been used by paramilitaries to generate finance. This list
is not exhaustive but seeks to give an indication of the wide
range of acitivies in which the paramilitaries are, or have been,
involved.
ARMED ROBBERY
AND HIJACKING
It appears that, proportionately, the Northern
Ireland figures for armed robbery and hijacking are significantly
higher than the United Kingdom average. In 2000-01, 927 armed
robberies and 182 hijackings were reported.
Traditionally armed robbery has been used by
terrorists as a way of raising large cash sums. It is likely that
larges scale armed robberies raise in excess of £500,000
annually. Paramilitary groups remain heavily involved in this
crime.
Recent years have seen a marked increase in
the number of cash-in-transit and ATM robberies in Northern Ireland.
85 per cent of the case in transit market in Northern Ireland
is conducted by Securicor, who have reported an alarming increase
in attacks on cash in transit and on ATMs. In addition to Securicor
robberies, the Post Office has also reported 22 cash in transit
robberies this year. This represents a 100 per cent increase on
last year's figures.
17 people have been arrested and charged with
similar offences. It is assessed as unlikely that paramilitary
organisations have benefited directly from any of these activities.
PUBLIC SECTOR
FRAUD
Benefit Fraud
There is evidence of organised crime involvement
in this area—particularly groups involved in running "multiple
identities" and in the manipulation of instruments of payment.
35 per cent of organised crime groups are reported to engage in
Benefit fraud.
There are no benefit frauds unique to paramilitary
organisations. Members of Republican and Loyalist paramilitary
organisations are known to:
— "Do the double" ie work
and claim benefit (particularly popular where work can be casual
ie construction industry and private taxis).
— Claim to have separated thus increasing
the amount of benefit to each individual.
— Claim in two areas—particularly
popular in South Armagh though also done between NI and GB.
— Abuse the Motability scheme.
— Sell benefit books ie genuine claimant
sells benefit book which can be used a few times before it is
stopped but tells the SSA that it is lost or stolen and is issued
with a new book.
Fuel Smuggling
HMC & E figures indicate that in 2000, 13
major fuel laundering plants with the capacity to produce in excess
of 40 million litres of illegal fuel had been discovered in Northern
Ireland. In January 2001, a further two mixing and one laundering
plants were dismantled. Analysis shows paramilitary involvement
in this area.
Organised crime has links with fuel smuggling/laundering
operations. Significant illegal activity is carried out in South
Armagh and other border areas including Londonderry by organised
criminal gangs. The financial incentives are such that the trade
is increasingly attractive to new groups. The quantities of fuel
involved are significant. In 1999-2000, HMC & E seized 1.5
million litres of illicit fuel. In the year to September 2000,
over 1.3 million litres of illicit fuel was detected (729,000
litres of which were smuggled, the remainder laundered). Prolific
smugglers can expect to generate tens of thousands of pounds per
day from their activities.
There are indications that organised crime "taxes"
smugglers—taking a percentage of the profits. There is also
evidence that organised criminals influence diesel prices in West
Belfast and elsewhere by imposing sanctions on luckless garage
owners that seek to set their own prices. The problems are spreading.
It is likely that organised crime generates millions of pounds
per annum from smuggled fuel.
Many legitimate businesses, particularly in
the border areas have failed due to competition from the Republic
of Ireland, where fuel is significantly cheaper. Over 120 outlets
in Northern Ireland have been forced to close. Since 1994, legitimate
fuel deliveries into Northern Ireland have decreased by over 50
per cent; in the same period the number of vehicles on the road
has increased by over 20 per cent.
Alcohol and Tobacco Smuggling
By the end of October 2000, publicly quoted
HMC & E figures reveal that 44 million cigarettes had been
seized in Northern Ireland—double the figure for 1999. While
this may in part reflect increased enforcement activity it is
indicative of a major, and significant, criminal interest in tobacco
and alcohol smuggling. The loss of duty runs into tens of millions
of pounds annually. Organised crime is involved in regulating
the supply of smuggled cigarettes in Belfast and some provincial
towns in order to maintain prices (and profits).
Smuggling of cigarettes from EU countries with
low duty rates and smuggling from countries outside EU is prevalent.
According to HMC & E, countries of the former Soviet Union
(Lithuania, Russia, Ukraine) and South East Asia represent the
biggest external cigarette smuggling threat to the United Kingdom[1].
Tobacco is brought in from the continent, where a range of countries
are important transit points—often by the container load—and
then distributed in smaller quantities as required. It is also
the practice for individuals posing as holiday makers, particularly
visitors to the Canary Islands, to return with large quantities
of excess duty free cigarettes. Hundreds of thousands of cigarettes
a week are believed to enter Northern Ireland by this method.
There are extensive distribution networks in place, many of which
are regulated by paramilitaries.
Betting and Gaming
Substantial abuse is reported in the following
areas:
— Suppression of takings.
— Off-record premises (takings unrecorded).
— Illegal/unregistered bookmakers.
— Illegal/unregistered bingo halls.
— Non-licensed/illegal gaming and jackpot
machines.
In 1999-2000 HMC & E collected £2.5
million from betting and gaming activities in Northern Ireland.
Fraud estimates indicate significant non-compliance and the trend
is upwards. There are indications that some ventures may be "legitimately"
run—making action by law enforcement very difficult. Five
per cent of organised crime groups are reported to be involved
in illegal gambling.
Cash businesses provide significant scope for
suppression of income. There are limited resources devoted to
tackling the problem and therefore evasion is widespread. 95 per
cent of Northern Ireland bookmakers, for example, are locally
owned and managed. The quality of audit and control mechanisms
is very variable.
AGRICULTURAL FRAUD
In 1999-2000 substantial abuse of Department
of Agriculture payments was reported. The abuse takes the form
of the deliberate introduction of disease, tampering with or changing
ear tag identification for the purpose of claiming compensation
and livestock smuggling. There is limited evidence of organised
crime involvement in agricultural fraud:
— Suspect herd keepers collaborate
to spread disease.
— A network of dealers facilitates
the smuggling of cattle for profit.
The vast majority of such activity occurs in
South Armagh. Whilst there is no specific intelligence to suggest
that republican paramilitaries have orchestrated such fraud, individual
members have doubtless benefited from such activity.
DRUGS
In the period 1 April 2001 to 20 November 2001
police seized the following quantities of drugs:
| Class A | Class B
|
Cocaine
Powder grammes: 546,39
Crack grammes: 38.5
Wraps: 0
Ecstasy (MDMA)
Powder grammes: 231.81
Tablets: 100,475.5
Capsules: 2
LSD
Tabs: 122
Microdots: 0
Opiates
Grammes: 59.13
Tablets: 29
Ampoules: 4
Wraps: 17
MLS: 260
| Cannabis
Resin grammes: 301,733.88
Herbal grammes: 12,927.75
Oil grammes: 0
Joints: 171
Plants: 87
Amphetamines
Powder grammes: 7,433.92
Tablets: 0
Wraps: 19
Barbituates
Tablets: 0
|
SEARCHES, ARRESTS AND CHARGES
| | Number
|
| Premises searched | 262
|
| Vehicles searched | 246
|
| Persons searched | 584
|
| Arrests | 553
|
| Charged | 212
|
Just under half of the organised crime groups identified
by the 2001 Threat Assessment were listed as having drug dealing
or trafficking as their predominant crime type. While just over
half of these are believed to have paramilitary associations,
it is hard to prove paramilitary-directed involvement.
It is widely held that loyalist paramilitaries are heavily
involved in the Class B, and to a lesser extent Class A, drug
market, but it is hard to estimate the levels of control exerted
by or the profit generated for the organisations. Publicly, the
republican movement has taken a strong stand against drugs and
has used this as another means of exerting control over the community.
Direct Action Against Drugs is held responsible for the deaths
of numerous major drug dealers in Northern Ireland since the 1994
ceasefire. However, historically some republican groups have been
linked to the illegal drugs market and it is likely that individual
members remain involved for personal gain rather than to finance
the organisations.
Analysis of price and purity data would suggest a modest
recent increase in heroin availability—and a local trafficking/distribution
network able (and willing) to meet local demand. Cocaine offers
attractive profits to Northern Ireland traffickers and there is
intelligence to indicate growing organised crime interest in cocaine
importations. There have been notable small-scale seizures of
the highly addictive crack cocaine in 2001. These seizures are
likely to be an important indicator that this drug is developing
a foothold in the Northern Ireland market. Ecstasy is widely available
and there is competition to supply the local market. Lower relative
profits from ecstasy make dealing in other Class A drugs—notably
cocaine—more attractive to well-established trafficker groups.
Cannabis is widely consumed and the drug is prevalent throughout
Northern Ireland. Falling prices indicate intense competition
amongst local traffickers/middle market dealers and significant
(stable or growing) demand. Links to Spain and South Africa are
important in feeding the local market. The amphetamine market
appears to be stable, with local prices and purity in line with
the UK.
Recent local studies have highlighted the emerging problem
of drug-assisted sexual assault. There is an emerging problem
with prescription drug misuse based on law enforcement indicators
and independent work undertaken. It appears that prescriptions
are bought from addicts and the drugs subsequently sold. Selling
of prescription drugs over the Internet is a new and emerging
trend. Dispensing chemists are a target for robbery gangs intent
on stealing prescription drugs that are then sold at a profit.
INTELLECTUAL PROPERTY
THEFT
Intellectual Property Theft (counterfeit goods) is a major
local problem. Since 1 January 2001 police have seized the following:
| Items | Approximate value
£
|
| Music CDs | 370,000
|
| Playstation games | 750,000
|
| Video films/DVDs | 27,000
|
| Clothing | 285,000
|
| Software | 1,200,000
|
| TOTAL | 2,632,000
|
In the period 1995-97 RUC counterfeit goods seizures amounted
to £1.5 million. This total included one major seizure of
goods from Spain.
Three-quarters of the total comprised low-tech goods (eg
perfume, clothing and videos) sourced from Bulgaria, Turkey the
Far East and within the European Union. High-tech items comprised
25 per cent of the total—the vast majority of these (electronic)
items were traced to South-East Asia. In 1999-2000 there was a
marked increase in the number of CDs, videos and computer games
(mainly Play station items) seized—the total value of all
items being £3.5 million, representing a significant increase
on previous years.
Counterfeit goods are widely distributed via local markets
and are a multi-million pound business in Northern Ireland. There
is evidence of the use of the Internet to facilitate trade in
counterfeit items.
There have been a number of recent seizures of illegal video
reproduction plants in Armagh and Belfast. In Armagh 50 video
recorders and thousands of blank and counterfeit video cassettes
were seized. Subsequent examination indicates the Armagh and Belfast
plants produced thousands of items for the local Northern Ireland
market. Intelligence indicates that blank CDs are also imported
in extremely large consignments into Northern Ireland.
It is believed that individuals with paramilitary connections
are involved with the smuggling, distribution and manufacture
of counterfeit goods and it is possible that some of the money
raised is given to illegal organisations. It has been noted that
paramilitary memorabilia is occasionally seen on sale at open-air
markets which may also be a form of fund raising.
COUNTERFEIT CURRENCY
Over the past four years, there has been a steady increase
in the occurrence of counterfeit currency throughout Northern
Ireland, with a significant rise this year.
| Year | Number of incidents
|
| 1998 | 489
|
| 1999 | 520
|
| 2000 | 749
|
| 2001* | 1,579
|
| * To 16 November 2001. |
The most common counterfeit banknotes currently in circulation
are:
— Bank of England £20—exceptionally good
quality with silver foil.
— Bank of Ireland £20 (new style)—good
quality with gold foil.
— Bank of Ireland £20 (old style)—good
quality with no foil.
— Bank of England £5—poor quality but
frequently accepted.
— First Trust £20—good quality with clear,
well-defined image.
Intelligence and investigation have linked paramilitary groups
to the distribution of counterfeit bank notes.
The imminent introduction of the Euro in the Republic of
Ireland presents new counterfeiting opportunities; it is anticipated
that up to 50 per cent of businesses in Northern Ireland will
be in a position to trade in Euros.
Some counterfeit currency still appears to be produced by
opportunists who are using home computers etc but the overall
trend is a significant improvement in the quality of counterfeit
banknotes in circulation. This is most likely due to the increased
availability of technology such as colour laser printers, colour
copiers, scanners etc.
COUNTERFEIT DOCUMENTS
AND TELEPHONE
CARDS
A wide range of counterfeit documents was recovered by the
RUC in 2000. They include counterfeit driving licences (good quality),
letters of authority received by a local bank (good quality),
Belfast business training passes (excellent quality) and a number
of student identification passes (excellent quality). It is not
known to what extent this activity is orchestrated—but there
are links to organised crime.
Intelligence indicates that paramilitary groups are involved
in the distribution of counterfeit telephone cards—which
are sold at a significant profit.
EXTORTION
As well as being a means of raising finance for terrorist
operations, extortion has also been used effectively since the
early 1970s to exercise paramilitary control over the community.
Extortion probably generates hundreds of thousands of pounds per
annum for paramilitary organisations.
In the period 1 January 1995-31 August 2001, a total of 80
persons were arrested for extortion offences. Detailed analysis
suggests that the true extent of Northern Ireland's extortion
problem is not reflected in the number of cases successfully prosecuted.
It is likely that less than 10 per cent of extortion is reported
to police. Over 80 per cent of reported cases of extortion were
carried out on behalf of a paramilitary organisation. Collectively,
loyalist paramilitary groups were responsible for 76 per cent
of reported cases.
The building trade is the worst affected though fast food
outlets, restaurants and licensed premises, car dealerships and
other retail outlets have also been affected. The majority of
cases reported are in the greater Belfast area.
Extortion threatens inward investment and increases the cost
of doing business. This is reflected in higher prices for the
consumer and additional costs to the taxpayer. Extortion destroys
families and relationships and businesses—particularly in
witness intimidation cases. Extortionists drive people out of
business and out of their homes and police are forced to devote
scarce resources to the protection of vulnerable individuals.
MONEY LAUNDERING
Money laundering is a vital activity of all profit generating
organised crime operations. The sums of money involved may be
very significant[2]. 50
per cent of organised crime groups in Northern Ireland are specifically
reported to be involved in money laundering, although it is probable
that all profit-generating criminal groups engage in this activity
to some extent.
Traditionally, paramilitary organisation from both sides
of the community have used legitimate businesses such as taxi
firms and pubs and clubs to launder funds. Other popular laundering
methods have been the use of bookmakers and bureaux de change.
LOAN SHARKING
Money lending rackets have traditionally been used by paramilitary
organisations to raise funds. The profits are often used to fund
prisoner welfare and weapons procurement operations.
November 2001
1
NCIS 2000 UKTA. Back
2
The IMF has estimated that money laundering by criminals worldwide
is valued at between two per cent and five per cent of the world's
GDP. NCIS 2000. Back
| 
