REVIEW AIMED AT TIGHTENING MONEY LAUNDERING NET

The authorities have the powers to prosecute criminals for laundering
money, but it is widely seen as one of Drugs and Crime Correspondent the
most difficult crimes to prove, writes CATHERINE CLEARY, Drugs and Crime
Correspondent

Less than three years ago there were complaints that the then Garda Fraud
Squad did not have its own fax machine. Since then, the Garda Bureau of
Fraud Investigation has been established with the latest information
technology and no lack of fax machines.

Now, officials in the Department of Justice are examining the 1994 Criminal
Justice Act with a view to strengthening its powers. The review could
result in solicitors, accountants and estate agents being obliged to report
suspicious transactions to the Garda and Revenue Commissioners.

"Gardai would be anxious that solicitors, accountants and estate agents
would be designated as reporting bodies," a senior Garda source said.
"There is nothing to prevent a major criminal going into a solicitor or an
auctioneer with £500,000 in cash to buy a house."

Money laundering became a criminal offence under the 1994 Act, which came
into effect in May 1995. Financial institutions are obliged to report any
transaction over £10,000 they deem suspicious. However, solicitors,
accountants and estate agents are not obliged to make such reports. The
official line is that the law, generally, is under constant review in
consultation with those who are responsible for implementing it.

However, there is a particular focus on money laundering, which is also
being examined this year for the first time by the international Financial
Action Task Force on Money Laundering (FATF), an OECD body. Up to £800
billion is estimated to be laundered every year.

A questionnaire has been sent to the Irish authorities by FATF and its
officials will visit Ireland next month to assess the laws. Irish officials
will travel to Paris to respond to questions about anti-money laundering
powers. Any changes recommended in the review could be in place before then.

More than 90 suspicious transactions have been reported by financial
institutions to the Garda Bureau of Fraud Investigation this year. Since
May 1995, when the law came into effect, there have been more than 1,000
such reports involving some £75 million.

When a report is received it is put through the bureau's records and if it
is linked to a particular case, an asset trace can be run on the money.
Gardai must prove the money is the proceeds of crime.

Another aspect of the review involves the power to freeze bank accounts
once a suspicious transaction is reported. In Britain, the police have
powers to temporarily freeze any account where a report has been made until
an investigation is completed.

The bureau has carried out 400 investigations. Of the 10 cases prosecuted
it has had three convictions, the remaining seven are pending.

The Proceeds of Crime Act, which established the Criminal Assets Bureau,
allows a chief superintendent to apply to the High Court for the seizure of
assets. The burden of proof in a civil case is on the balance of
probability, rather than the criminal burden of beyond a reasonable doubt.
This measure is the "envy" of other police forces, according to gardai.

The Department review is also examining the requirement of instant
reporting, obliging financial institutions and other organisations to
report a suspicious transaction as soon as it happens. However, the speed
of electronic transactions mean the money can be transferred before the
report is made.

Another difficulty with the law has been the onus on the authorities to
prove that someone is hiding money in order to avoid prosecution. This can
mean that it is easier to prosecute the "bagmen" on a charge of handling
suspect funds, rather than the criminals themselves.

An average of three fraud-related inquiries are made to the Garda every
week by Interpol. The law on money laundering applies to proceeds of crimes
committed outside Ireland if the money is found in an Irish financial
institution. It also applies to money laundered before the Act was passed.

The bureau was set up in response to the increase in scale and complexity
of fraud investigation. An adequately-resourced bureau with the services of
full-time accountants had been recommended in an expert report published in
December 1992. Much of the concern at the time related to fraud in the
beef, food and finance sectors.

The publicity surrounding the earning power of some of the State's most
notorious criminals has put drug money firmly into the spotlight, where it
is likely to remain.