Examination of Witnesses (Questions 260
WEDNESDAY 13 FEBRUARY 2002
260. You will be looking at it from the proceeds
of crime perspective in future?
(Ms Ferguson) Under the new legislation.
(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 areasand 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 itwhat 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
(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
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
(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
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
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
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.
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) * * *