Examination of Witnesses (Questions 340
WEDNESDAY 6 MARCH 2002
340. You say you visited 600 petrol stations.
What percentage of the whole is that?
(Mr Byrne) There are 700 petrol stations. We visited
600 in the last 18 months. A lot of that will be because of VAT
visits, assurance visits, relatively low level visits. Some will
be by the detection forces. A small number will be by the more
intensive audit investigators because we are concerned about that.
341. If this question strays into an area of
sensitivity, it is entirely appropriate for you not to answer
it. You talked about the petrol retailer maybe using 20 per cent
illegal fuels. What evidence do you have that he or she has been
coerced into doing that by paramilitary groups?
(Mr Byrne) None. It has not been brought to anybody's
attention. Paul and I discussed this earlier. We do not have any
direct evidence of arm up the back coercion. It is more commercial
342. You do get people who may be paramilitaries
or certainly people outside the law doing direct selling, hucksters,
who can frequently be paramilitary or associated with the paramilitary.
Is that correct?
(Mr Acda) Yes.
343. When the Chairman was discussing with you
the question of staff protection, it was established that nobody
had been shot, but there are other forms of intimidation. I suppose
people associated with paramilitary groups can say, "We know
where you live" or, "We know where your child goes to
school." Have you ever stopped an operation in Northern Ireland
because it was considered a risk to the personnel in pursuing
(Mr Byrne) Most of what would be going on from day
to day, the routine activity by our detecting staffthey
are advised to be sensitive and not to take chances so in terms
of pulling an investigation or operation I have no experience.
(Mr Acda) * * * .
344. While there is no particular case that
has been pulled, there are cases that might not have started or
where the techniques that you decided to perform would be somewhat
different, so I suppose the surveillance avenues you would engage
in might involve somewhat different techniques.
(Mr Acda) Some of the problems are caused by weather.
Some places are best dealt with by helicopter insertions and if
the weather is bad a helicopter cannot go in and the security
services do not go in. That is a concern for us but it is primarily
a concern for the people providing the security for us, PSNI or
(Mr Byrne) It would be helpful to give examples where
circumstances inhibit how we carry out operations. Paul talks
about helicopter insertions, which we do principally because of
speed. If we want to take out a laundering plant near the border,
we know that we have a finite time in which to move in, carry
out the operation and get out of the area before there is distress.
In some instances, we have had to move very quickly because we
know that our presence is okay for a finite time. After that,
the locals who oppose us appear on the scene. In the last nine
months, I have six instances here where officers have been stoned,
their cars and vans have been rammed; they have had serious verbal
abuse from a crowd of people at a huckster site.
345. What security measures do you take therefore
to protect officers in these circumstances?
(Mr Byrne) Where we are talking about most of the
large scale, targeted operations, we take the full advice and
we follow the directions of the military, if necessary, but certainly
the police service of Northern Ireland. Ronnie Flanagan said to
me that his view of their role was to provide us with a safe bubble
within which to operate for a period of time. They determine the
length of time that we can take, for the very high scale operations.
For the low scale operations, two officers carrying out routine
patrols and the like, all we can do is to warn them not to take
chances, to identify situations, to withdraw if they have to.
They have to give extra attention to security. There is a third
element to what we have to do in Northern Ireland through a range
of techniques which it is not necessary for me to go into today.
* * *.
We have arrangements with other agencies so
that we are aware of that and from time to time we trigger the
arrangements with the Northern Ireland Office to carry out a security
check for us, either on the circumstances of an individual or
on a building, if appropriate.
346. If you have some particularly difficult
areas, you are presumably using rather different surveillance
techniques. You might have a bigger dossier or some background
information as to where you can move in. If helicopters are being
used, filming from helicopters might give background information
but it would not be so necessary if it was not a difficult area.
If it were moved further inland, the officers would be able to
tackle movement of vehicles.
(Mr Byrne) Yes.
347. On the question of charges that you bring
against individuals who have been laundering fuel or money, smuggling
across the border, what charges are you able to bring? What sentences
do you expect to get?
(Mr Byrne) Principally, the offences that we charge
are under the Customs and Excise Management Act which covers a
range but has two or three major ones to do with "knowingly
concerned in the fraudulent evasion" or there is a strict
liability offence. For the more important one that we naturally
pursue most of the time, the offence is punishable by seven years'
imprisonment or an unlimited fine or both. There are other offences.
Obviously, we can move into money laundering although that has
not often been done in Northern Ireland with the exception of
two splendid operations at the back end of last year. That is
a relatively new area. We have from time to time pursued offences
under the Theft Act or conspiracy where the offences are different
but due to changes in the statutes we no longer do this.
348. Do you think these sentences provide a
sufficient deterrent, in your opinion?
(Mr Byrne) It is difficult for us to say because the
kind of things which we are putting through the courts at the
moment, and therefore the sentencing, are a reflection of what
we were doing two years ago. The process takes a long time. Our
strategy is meant to be dynamic; we are meant to be developing
and the department did not have a strategy a couple of years or
so ago. We had a series of activities, tactics, and that was focused
pretty heavily bottom up. Therefore, I suppose typically we find
through the courts that the levels of punishment are a financial
penalty, £5,000 or less, quite often a suspended sentence
from time to time, no more than three months' imprisonment. That
is as much a reflection of the relatively low quality of operation
of the people that we are putting before the courts as it is the
courts' reluctance to sentence. In September of last year, we
had something a little more serious and the person got 18 months.
Just two weeks ago, we had somebody who got two and a half years.
The potential penalty of up to seven years is enough. It depends
whether the courts apply it and it is not for me to judge whether
the courts get it right. It is a dangerous area for an enforcement
officer to get into. The more important point is that we must
use the array of penalties because taking the money off people
through assessment, as well as simply confiscation, causes pain.
We need to raise the cost of doing business so that people do
not want to get involved in that game.
349. Were you slightly surprised by the remarks
of the Lord Chief Justice yesterday when he said that white collar
crime should not attract a custodial sentence?
(Mr Byrne) I have been in law enforcement for a long
time. The people who are most deterred by the prospect of being
incarcerated are those who commit white collar crime. Putting
people in prison is not about vindictiveness from a law enforcement
officer's point of view. The only reason that we pursue prosecutions
is because we believe that will be the way which causes the greatest
deterrent and the greatest impact. We do lock up 700 couriers
bringing half a kilo of cocain in from the West Indies every year.
I am not sure how huge a deterrent that is to some of these people
to spend one or two years in prison. If you are a businessman
or you are in it by way of nature and you want a reputation in
your society which tends to go with being a businessman, the fact
that you have spent the last 12, 18 months, two years or longer
in prison, in my view, is probably much more of a deterrent for
that type of crime than it is for traditional criminals.
350. Have the courts, in your experience, been
giving a higher tariff because of a defendant's paramilitary links?
(Mr Byrne) We have no experience of that.
351. Can I ask about the Proceeds of Crime Bill?
How do you think it will be of particular benefit to you?
(Mr Byrne) We are taking the Proceeds of Crime Bill
very seriously. These are easy things to say but we have developed
a strategy of our own. We think it is a structured way of determining
what you are going to achieve and then driving to achieve it.
We have already started to seize with two hands tackling the money.
The Proceeds of Crime Bill will give us the powers to tackle cash
away from the frontier. It will give us the opportunity to tackle
cash and assets which are not to do with drugs, more broadly.
I know in the drugs area how important it will be. It is a massive
asset to us in that area. In the fiscal area we are able to go
after assets. We are able to go after money because we can assess
for back taxes because that is what the criminality is. Nonetheless,
it will give the agencies together an opportunity to tackle the
lifestyles of criminals without having to go back and prove the
predicate offence. That is likely to bite quite hard in Northern
Ireland. Whether it will bite through Customs or more likely through
other agencies, I am not so sure.
352. In your assessment, is there anything missing
from that proposed piece of legislation as it currently stands?
Is there anything you would like to have seen included that is
(Mr Byrne) No. We have been through this several times
in Customs. In Customs we are probably the lead agency in looking
at the potential paths of using it. The answer is, no, we are
quite happy with what has been provided.
353. What about the Assets Recovery Agency in
particular; how will that impact on paramilitary activities and
(Mr Byrne) The Assets Recovery Agency will be the
only authority, of course, which has the power to use the civil
route simply because of the existence of assets. Forget the Human
Rights Act, the proportionality considerations mean that organisations
like Customs and the Police will not be able to take that straightforward
civil route without predicate offences. We are pretty determined
that it will provide a very valuable partner and we intend to
make sure that, as and when it is up and running, that we provide
it with a set of confiscation orders which it can pursue so they
can get money into the tin box. I keep getting on to my officers
and saying, "It is all very well what they have got in Confiscation
Orders, how much money goes in the tin box? That is the bit which
is missing from the impact. That should give the Assets Recovery
Agency something very worthwhile to do. The more difficult area
is this use of the civil power to tackle those with the wealthy
unexplainable lifestyle. I have never understood the lack of publicity
in Northern Ireland for the so called modern-day "Robin Hoods"
on either side of the religious divide who have a high reputation
but when you go and see where these people live without working
(on the face of it) I wonder why the populace does not see through
that element of the sham. We do not make enough of the fact that
there are people with lavish lifestyles built on the back of fraudulent
activities and smuggling where some of those people say it is
paramilitary activity. There is a combination of selfish interest
as well as political interest here. I believe as and when the
Asset Recovery Agency completes its introductory period, takes
stock and picks up its skirts, that is where it may well bite.
354. So in terms of Confiscation Orders there
will be clear, direct liaison between yourself and the Agency
and you think there may be some further scope through the provisions
covering criminal lifestyles? Is there any other obvious involvement
that you envisage between yourselves and the Agency?
(Mr Byrne) Yes. It is expected that at the outset
it will need to recruit individuals and I think we have in Customs
probably more of the trained, capable financial investigators
because there are additional skills there. We will certainly be
seconding officers to help them in the early days. I suspect some
of our people will see a career there for themselves so it will
help them to develop that expertise. We also expect them to help
us develop expertise in the area because they will be the centre
of excellence for training and they will take from us, we will
second people to them, they will develop technical expertise,
and hopefully we will receive benefit by getting the people back
Mr McCabe: Thank you very much.
355. We have come to the end of the questions
we wanted to ask you about this particular inquiry. Can I abuse
my privilege as Chairman and lob a little grenade on another subject
for which I am afraid you are unprepared. On 1 April the Aggregates
Levy comes into effect. We have formed a view in the Committee
about the effect that might have in Northern Ireland and one of
the problems we have foreseen and warned the Government about
is the enforcement of it because it seems to us that you are going
to be more interested in finding a lorry load of oils which is
evading hundreds if not thousands of pounds of revenue than a
lorry load of aggregates which is evading £10 or £20.
Have you made any plans to enforce these measures and to counter
any smuggling there might be of aggregates to the disadvantage
of the Northern Ireland industry?
(Mr Byrne) No to all of that. We have not made plans
on my side of the house. I can take some solace here in the fact
that my side is concerned really with the criminals, those who
simply do not want to comply under any circumstances. The other
side of the organisation deals with those who we call "compliance
raiders", where although their willingness to comply is a
little uncertain, given the right encouragement they are willing
to comply. Therefore until the regulatory basis is determined
and until that side of the house identifies it in a strategic
wayhow close the control is going to be, what is the nature
of regulations and therefore what are the gaps that people will
try to slip throughthey will not engage with my side of
the house to look at how we can deal with the problem of those
who are determined to commit fraud. I think you have foreseen,
rightly so, that we are set priorities in the Department. That
is what development strategy is about, it is about setting priorities
and determining where you are going to get most bangs for your
buck and how you are going to deliver a real outcome. Frankly,
until we are clear that the Aggregates Levy is going to deprive
the Chancellor of large sums of money, I suspect that most of
our enforcement action will be through a tight regulatory regime
rather than employing the watchdogs on my right and left. I am
being called back before you to talk about Northern Ireland oils
generally some time in May so I will not be able to escape it.
I will carry the message back and I will be briefed on the next
occasion and, if you wish, we will submit something to you in
356. That is from the Committee's point of view
a highly satisfactory answer. We are full of sympathy and we believe
that things could have been otherwise if the Government had listened.
It is a message that we will reinforce on your behalf. If you
wish to reinforce it when you come back that will suit us even
better. Thank you very much for coming. It has been an interesting
afternoon. It has been very useful to us in terms of our report.
We look forward to seeing you again.
(Mr Byrne) Thank you very much, Chairman.