Select Committee on Northern Ireland Affairs Minutes of Evidence

Examination of Witnesses (Questions 260 - 279)



  260. You will be looking at it from the proceeds of crime perspective in future?
  (Ms Ferguson) Under the new legislation.

  261. Yes.
  (Ms Ferguson) I think it is fair to say that we are looking operationally at how that new legislation will come into effect and it does allow us the potential to look at things and exchange information with the police in ways which we have not been able to before.

  262. How many financial investigations in each of the last three years have uncovered any evidence of activity linked with paramilitaries?
  (Ms Ferguson) In terms of investigations undertaken locally, I could not actually give you that information. We conduct something like 2,500 full inquiries a year on average. Some of those will have monies taxed in them which we suspect come from illegal or paramilitary activities but taxpayers generally do not tell us that and because of the gateway issues which we have discussed we would have no firm information

  263. There is nothing within the statistics that would give any indication?
  (Ms Ferguson) No.

The Reverend Martin Smyth

  264. Following through the questioning Mr Bailey was making one recognises accountants drawing up balance sheets which are designed to conceal rather than reveal. We have seen that happening more recently as well in larger firms. At any time have you actually looked at a sudden increase in expenditure which does not seem to have a reason behind it because, say, in 1979 or 1980, whenever it was, a firm made a certain return to a building society and then suddenly, the next year, there was a large increase? Is that a sign you would ask questions about?
  (Ms Ferguson) In any business anywhere any deviation from a standard pattern would cause us to stop and look and ask the question "What was that about?"

  265. Knowing some of the areas—and we are speaking specifically of Northern Ireland where there has been racketeering going on and of course the public purse over the years has funded most of it—what about new businesses set up with people coming from nowhere apparently with money? I am still trying to find out the stockbroker who advised a person to invest 30 bob a week from their prison wages, could make a fortune. What sort of investigations do you do into new start ups?
  (Ms Ferguson) Again, any new business start up where there was a substantial amount of capital invested we would seek to identify the source of that. Sometimes it is very apparent we have a previous tax record for the individual, they have perhaps been made redundant and we can assume that there was a large redundancy payment which then has been put into a new business. If on the examination of the first accounts there is that sort of payment and we have no history of the person or no history which would substantiate that amount of money we would ask the question "Where did it come from?"

  266. Broadening out the questioning, what formal mechanisms do you share, information with, say, the Police Services in the United Kingdom as a whole, bearing in mind that people from Northern Ireland, for example, scatter everywhere and people in Scotland, England and Wales are not immune from being caught up in racketeering and even terrorist financing as we have discovered recently? What sort of formal mechanisms have you and how frequently do you use them?
  (Mr Martin) In the past we have not been able to share our information frequently with the police simply because we have not had the legislative power to do this except in restricted circumstances, for example where the police obtain production orders and the like. But, following the enactment of the Anti-Terrorism Bill last December, we do now have a formal gateway to share information with the police and other law enforcement authorities where it is concerned with the investigation of a crime, criminal investigation or criminal proceedings and we shall be making use of that either to disclose information spontaneously to the police where it seems to us it will be useful to them or to receive requests from them and respond to them. What I am really saying is in future there will be a great deal more opportunity for us to do this than there has been in the past.

  267. Hitherto there have been no formal mechanisms but you are now hoping to set them up?
  (Mr Martin) Indeed, that is right.

  268. Would that be at regional level or national level, in other words would a branch if it discovered an issue here, would they be able to make local contact or would it have to go up to a higher level?
  (Mr Martin) The passing of information will to start with, certainly, be through a single channel in Keith Moore's office in London but I think we will make arrangements to ensure that where information is needed urgently it will certainly be possible to achieve that.

  269. You referred specifically to law enforcement bodies, in one sense the Benefits Agency is not a law enforcement agency but would you be including them in your formal contacts?
  (Mr Martin) The answer is that we do already have some provisions to share information quite widely with the Benefits Agency. We have been in the practice of doing that in the past wherever that has been necessary and helpful.

  270. Apart from those who we have mentioned, are there any other agencies or organisations you would find it helpful to work more closely with?
  (Mr Moore) The new legislation is not framed in terms of law enforcement agencies. It is framed in terms of information relevant to a criminal investigation or the initiation of such an investigation. Any body which is a prosecution authority in its own right we would be able to exchange information with for the purposes of those criminal investigations. In the widest sense, yes, the Department of Trade and Industry, for instance, Trading Standards officials, Housing Benefit authorities, all that wide body of Government departments we would be able to disclose information to.

  271. Would you share the response that we discovered in Dublin where we discovered that the Criminal Assets Bureau there bring together in a formal setting representatives of different agencies and they can work together much more efficiently than, as it were, at both levels? They work together, share together and they bring into that Assets Bureau their authority from their own particular agencies. Would you think that would be a helpful development?
  (Mr Moore) I think in terms of our equivalent of that, the proposed Assets Recovery Agency, the establishment of that is being discussed by an Assets Recovery Committee. On that Committee are the various agencies including ourselves, Customs and Excise, National Criminal Intelligence Service, Home Office representatives, so that effectively, I think, is a precursor to the type of co-operation that you are talking about. I would see that certainly continuing within the forum of the Assets Recovery Agency certainly.


  272. Did you mention the Benefits Agency? If you did I did not hear it.
  (Mr Moore) I do not think that DWP are represented on the Assets Recovery Agency but certainly we are working with the Benefits Agency on joint prosecutions at the moment and we are involved in criminal confiscation with them. So I can see them having a real interest in the Assets Recovery Agency as it progresses.

The Reverend Martin Smyth

  273. You are approaching it with a degree of positiveness. Has there been any negativity? In other words, have you discovered some folk defending their own goals? Job protection everywhere is a natural instinct. Have you discovered in the plans that have been discussed in Parliament amongst yourselves that you are all unanimous that this is the way to go forward or are there those flagging up issues?
  (Mr Moore) I have been our representative on the Assets Recovery Committee and expect to be our representative on the Organised Crime Task Force and I have been pleasantly surprised at the welcome that I have received as the Inland Revenue's representative at forums which previously we have not been able to attend because of the restrictions on availability of information. I think that everybody is looking towards this with a very positive attitude for the future. Similarly, there are some reservations. I certainly do not think that we should ignore certain reservations of staff. For instance, I know the Criminal Assets Bureau take certain security steps in regard to their staff and staff that we might second to the Assets Recovery Agency we would want to ensure they will be properly protected and in our involvement in the Task Force we would expect the security of our staff to be a prime consideration. Against that, there has been a lot of enthusiasm. I have explained the situation that if we had information in the past we were not able to do anything with it. There have been situations in my own experience, not specifically within the Northern Ireland context, where I have received information and I have been uncomfortable with the fact that I was not able to pass it on to the police. Investigators in the future will not be in that uncomfortable position.

Mark Tami

  274. Looking at the Organised Crime Task Force, has that made a difference in really pursuing paramilitary and organised criminals in Northern Ireland in your view?
  (Mr Moore) I think it will make a difference. Because of the availability of the gateways now we see a real role for the Inland Revenue in the Task Force, primarily in the provision of information where it is required but certainly we would be wanting to look at organised crime as it affects Inland Revenue through the mechanism of the Task Force. Our interests overlap with Customs and Excise and Benefits Agency to a growing extent in Northern Ireland and I think the suspicion certainly is that paramilitary involvement in organised crime of that nature must be there, so to that extent we would expect to be involved in that.

  275. Have you detailed the nature of your work as you would see it as part of the Task Force?
  (Mr Moore) In anticipation of our joining the Task Force I have had discussions with the Northern Ireland Office and representatives of the Task Force and we have to a very large extent a shared view of how things should proceed. We would expect to take cases where we suspect organised crime involvement in Revenue fraud to the Task Force and where our strategy in terms of Revenue crime matches the strategy of the Task Force and the other parties in the Task Force we would expect those investigations to go forward under the banner of the Task Force. We will, to whatever extent we are able, assist in the investigations which fall in other people's areas. The difficulty is that the powers that we have are only available for the purposes of tax investigations. If it comes to providing assistance in, say, a Customs and Excise investigation where there is no Inland Revenue fraud, all that we can offer them are the skills of the individuals who may be able to assist. We would not be able to offer individuals to act as investigators because their powers would not allow them to.

  276. Do you see a workload issue there or not or is it just to see how it pans out?
  (Mr Moore) When I say to the extent that we are able, clearly resources come into that. The availability of staff to provide that assistance is an issue certainly.

  277. Sorry to press this but how would that decision be made? Is it a cost benefit type arrangement or is it the perceived importance of that case?
  (Mr Moore) Our strategy with criminal investigation is to undertake investigations that do most to bolster enforcement of the tax regime, both the tax and tax credit regime as that grows. One of our other priorities within our criminal investigation strategy is to support the Government's wider policy on countering crime, organised crime, wherever it appears. We have a number of priorities. We have to look on each occasion at how we resource each of those priorities and on a case by case basis we will decide whether it fits our strategy or the Task Force strategy.

  Mark Tami: Thank you.

Mr Robinson

  278. Good afternoon. I wonder if you could tell me first of all whether any of your investigators have been threatened in a paramilitary context during investigations?
  (Mr Moore) The last threats that I am aware of, and I have made specific inquiries in advance of this meeting, go back to 1988/89 as I said earlier. Those were anonymous threats by post and by telephone.
  (Mr Martin) * * *


  279. * * *
  (Mr Martin) * * *

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