AML: Ireland in turmoil as confiscation law declared unconstitutional
Ireland's Criminal Justice Act 1994 contained asset freezing provisions that were far ahead of their time - and the Garda (police) loved them. But a judge has now said that the provisions (which have since been replaced) were "unconstitutional" - leading to the prospect of a host of legal actions in respect of freezes over a period of some 15 years.
Her Honour Mary Laffoy yesterday made an order that section 31.8 of the Criminal Justice Act 1994 was "unconstitutional."
In 2008, following a request for mutual legal assistance from police in Belgium, the Garda instructed Allied Irish Banks to freeze two accounts in the name of Vehicle Tech Ltd. which the Belgian authorities said they had evidence to show was being used to collect the proceeds of sale of lorries stolen in Belgium and shipped to Ireland for sale.
Vehicle Tech Ltd sued AIB for return of the funds.
The basis of the Judges finding is that of breach of the principles of natural justice. She says that the making of a freezing order which, under the 1994 Act, had no end date specified in an administrative proceeding i.e. without court authority and without notice to the owner of rights, fell short "to an extraordinary degree" of providing safeguards to anyone with rights in property."
AIB says that it is immune from action because it was acting in accordance with the Act and on lawful authority.
Now that is uncertain and the prospect arises that hundreds of other cases will be brought to return frozen funds or to claim damages caused as a result of those freezing orders.
The law was changed when Ireland passed a substantially revised legal regime last year - long after it originally indicated its intention to cover shorfalls in the range of businesses affected.
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