BROUGHAN RAISES COMMUNITY CONCERNS WITH GOLD TRADING OPERATIONS

Deputy Thomas P. Broughan: I thank the Ceann Comhairle for the opportunity to raise this important issue. At a number of recent community and constituency meetings as well as at my constituency information clinics, grave concerns have been raised by citizens about the recent proliferation of gold shops and gold trader operations across the Dublin region which seem to be linked to the recession and current economic climate. I understand the issue also featured recently on the “Liveline” radio programme when residents from throughout Ireland highlighted the recent huge upsurge of gold trading operations and widespread advertisements in the national and local press.

I acknowledge that an overwhelming number of jewellery shops and businesses are involved in legitimate buying and selling of jewellery and other gold items but on-street and door-to-door gold operations are causing serious disquiet among many citizens. Some of my constituents believe gold jewellery and other items stolen in the recent upsurge in robberies and house burglaries are turning up in some of these operations.

The media have highlighted the huge increase in house break-ins in certain urban areas. The most recent third quarter CSO statistics highlighted a 21% increase in the number of robbery, extortion and hijacking offences. There was a slight decrease of 16% in the number of burglaries in the third quarter but this came on the back of a one third increase in the number of robberies in the second quarter of 2010. It is clear that the levels of robberies and burglaries remain unacceptably high.

Many reputable and legitimate businesses are involved in the trading of gold jewellery but the mushrooming of gold trading operations has given rise to many questions. Is the Minister of State concerned about the apparent lack of regulation of the trade in gold jewellery? There have been many disastrous examples of the lack of regulation of various industries under this Government, including the taxi, banking, financial and building industries, and the Government should act quickly to address this issue.

Citizens have asked me if a licensing procedure has been put in place for the establishment and operation of gold shops, on-street or door-to-door gold trading operations. Can anyone establish a gold trading operation, even if he or she has a past conviction for handling stolen property? Do any legal requirements apply for the establishment of a gold trading operation, whether mobile or in a premises? If there is no licensing regime, why will the Government not urgently establish one? Legitimate gold businesses would have no problem with this as it would exclude unscrupulous traders.

I hope the Government will consider introducing a system of invigilation to make it easier to track items of jewellery and other gold products received by businesses in response to allegations that stolen property may be turning up in shops. Have procedures been put in place to compel gold vendors to show that their products have been legally acquired where gardaí doubt their legal provenance? I understand that some shops have asked and continue to ask an individual selling them items to produce identification. Perhaps the Government would consider making the sale of any gold item dependent on a copy of valid identification being kept on the purchaser’s records. Many businesses depend on proof of identity. How can the Garda address the problem of robberies and burglaries if gold jewellery trading operations can operate with impunity? The Garda should be asked to conduct spot checks of gold trading operations for jewellery and other gold items stolen in house burglaries.

The lack of regulation of the trade in gold jewellery is damaging legitimate traders and causing concern in communities. A licensing system for gold traders, identification of gold vendors and regular spot checks by the Garda are key elements for the regulation of this mushrooming trade.

Minister Barry Andrews: I thank Deputy Broughan for raising this important issue and giving me the opportunity, on behalf of the Minister for Justice and Law Reform, to update the House on it. Deputies will be aware of a significant increase in the number of cash for gold outlets in towns and cities in the State and in the advertising for the direct mailing of gold to such outlets or to dedicated postal and Internet cash for gold traders. It is understood that many kiosks situated in hotels or shopping centres are operated by individuals employed by registered companies to buy gold for cash. It appears that most gold offered to these outlets is paid for on a scrap value basis and items are smelted and recycled. Established jewellers also buy gold and jewellery for cash. The prevalence of this trade appears to be linked to the high price that gold now commands on international markets and the cash for gold concept appears to be an international phenomenon.

There has been a considerable amount of media coverage of the activities of these cash for gold outlets, much of which has involved speculation as to the source of the gold being offered. The Minister is aware that the trade gives rise to concerns in communities about burglaries and other crimes that may be linked to the cash for gold trade.

The informal purchase of jewellery is not specifically regulated in criminal legislation but the circumstances under which jewellery is bought and sold may indicate the commission of certain offences, such as the handling or possession of stolen property under sections 17 and 18 of the Criminal Justice (Theft and Fraud Offences) Act 2001. Section 17 of that Act provides that a person is guilty of handling stolen property if he or she, knowing that the property was stolen or being reckless as to whether it was stolen, dishonestly receives or arranges to receive it or undertakes or assists in its retention, removal, disposal or realisation by or for the benefit of another person or arranges to do so. A person guilty of handling stolen property is liable on conviction on indictment to a fine or imprisonment for a term not exceeding ten years or both. Section 18 of the Act provides that a person who, without lawful authority or excuse, possesses stolen property knowing that the property was stolen or being reckless as to whether it was stolen is guilty of an offence. A person guilty of an offence under this section is liable on conviction on indictment to a fine or imprisonment for a term not exceeding five years or both.

In the context of money laundering and terrorist financing legislation, the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 only addresses a situation where a person buys gold and jewellery from a dealer, usually a jeweller, and pays in cash to the value of €15,000 or more or makes a number of separate purchases for smaller amounts to that total value. In such cases, significant requirements are placed on the vendor to carry out customer due diligence.

The Garda enforces the provisions of the criminal law in respect of the theft and robbery of jewellery and gold. Should members of the public have suspicions that goods being sold or traded may be stolen, the correct action is for these suspicions to be referred to the Garda for investigation.

The latest CSO crime statistical bulletin of 28 October 2010 indicates that with regard to burglary in quarter three of 2010, there were 6,016 recorded burglary and related offences, which represents a decrease of 1,194, or 16.6%, on the number recorded in quarter three of 2009. The annualised total for these offences up to end of quarter three of 2010 saw a smaller percentage decrease of 2.9% over the 12-month period to end of quarter three of 2009. Aggravated burglary offences decreased by 37, or 10.1%, in this 12-month period. The total recorded burglary and related offences for the years 2007 to 2009 are 23,603 in 2007, 24,683 in 2008 and 26,911 in 2009.

To take account of concerns about the matter, the Minister’s Department has formally asked the Garda Commissioner to state his view on the extent, if any, of criminal offences that are being committed in the procurement and receipt of gold and similar items in transactions carried out at cash for gold locations. In particular, the Commissioner has been asked to examine whether the trade may be linked generally, or in particular areas, to burglary offences; whether criminal justice legislation, particularly the Criminal Justice (Theft and Fraud Offences) Act 2001, is adequate in the context of cash for gold transactions; whether criminal elements involved in organised crime or otherwise may be connected with the operation and ownership of the cash for gold outlets; and whether new legislative provisions may be required to address criminality in respect of cash for gold transactions. As soon as the outcome of this examination of the matter is to hand, the Minister will make an assessment of what if any action, legislative or otherwise, may be required.