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 Header Item Written Answers Nos. 75-81
 Header Item Tax Code
 Header Item Tax Clearance Certificates
 Header Item Money Laundering
 Header Item Insurance Costs
 Header Item Banking Sector Investigations
 Header Item Bank Liabilities
 Header Item Central Bank of Ireland Investigations

Wednesday, 3 July 2013

Dáil Éireann Debate
Vol. 809 No. 3

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Written Answers Nos. 75-81

Tax Code

 75. Deputy Pearse Doherty Information on Pearse Doherty Zoom on Pearse Doherty asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan further to his Parliamentary Question No. 85 of 26 June 2013, if he will set out the average additional tax take paid by taxpayers earning over €100,000 if tax credits were abolished; the average additional tax take that would be paid if these taxpayers also incurred a new third rate of tax of 48% on the income earned in excess of €100,000; and what the effective tax rate with the credits abolished under either the current rate, or with the new tax rate, for average income earners at €125,000, €150,000, €175,000, €200,000, €300,000, and €500,000.  [32384/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan Unfortunately, it was not possible to collate the information required for this answer in the time allowed. I will provide the Deputy with the answer in writing shortly.

Tax Clearance Certificates

 76. Deputy Sean Fleming Information on Seán Fleming Zoom on Seán Fleming asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan the procedure by which companies with registered offices in the British Virgin Islands can obtain tax clearance certificates to be awarded contracts by public bodies and Government Departments here for work to be carried on here; and if he will make a statement on the matter. [32438/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I am advised by Revenue that a Tax Clearance Certificate is a written confirmation that the tax affairs of a person or business are in order at the date of issue of the Certificate. I am further advised that Revenue is obliged to issue tax clearance certification to any entity, regardless of where the entity is registered for company law purposes, providing there is no money outstanding to the Irish Exchequer and where relevant, providing all required tax returns are filed.

The application process for tax clearance certification can be completed either through the Revenue online system or in certain circumstances via manual application. For ease of administration Revenue has divided responsibility for processing tax clearance applications across a number of its operational areas. For example, Irish resident businesses are managed through the relevant local Tax District, while non-resident businesses are either dealt with by Dublin City Centre District or by the Non-Resident Unit in the Collector-General’s Office, depending on whether the applicant is already permanently established in the State or not.

I am assured by Revenue that every application for tax clearance is fully vetted and certification will only issue where all tax obligations are up to date. In circumstances where the application is refused, Revenue will make direct contact in writing with the business and will outline why the application was refused.

Money Laundering

 77. Deputy Tom Fleming Information on Tom Fleming Zoom on Tom Fleming asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if he will re-examine the requirement to have anti-money laundering identification requirements applied to the purchase of prize bonds over €25 as it is unnecessary restrictive and will have a detrimental impact on the sale of prize bonds to customers who wish to give them as a gift to family members; if he will review this with a view to setting the limit at €100 before any requirements were applied and accept that this would be a move appropriate level; and if he will make a statement on the matter.  [32476/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan European legislation has been adopted to protect the financial system and certain professions and activities from being misused for money laundering and financing of terrorism purposes. The anti-money-laundering obligations applicable in Ireland derive from the Third EU Money-Laundering Directive. The Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 was enacted in July 2010 to transpose the Third Money Laundering Directive (2005/60/EC) and its Implementing Directive (2006/70/EC) into Irish Law.

  Part 4 of the Criminal Justice Act 2010 sets out the obligations of “designated persons” in relation to customer identification. One such obligation set out in the Act is the obligation to conduct customer due diligence, prior to the establishment of a business relationship. Customer due diligence refers to the identification of customers and that of any beneficial owners of financial products associated with the customer.

An Post and the Prize Bond Company are deemed to be a “designated person” under the Criminal Justice Act 2010 as they fall within the definition of a “financial institution”. In light of this, An Post and the Prize Bond Company are required to comply with the relevant provisions of the Act in relation to the sale of Prize Bonds to customers. This means, in practical terms, that customer due diligence must be conducted on all purchases of prize bonds, irrespective of value.

  The extent to which any particular person or product may be exempted from the customer due diligence requirements of the Act is determined by reference to the Act having regard to the underlying Directives.

  The Central Bank of Ireland has no discretion to exempt certain firms from the requirement to comply with the Act.

  In light of the above, I am exploring with the National Treasury Management Agency (NTMA) and my colleague the Minister for Justice whether or not exemptions available under the Directives may be applied to small value purchases of prize bonds facilitated on behalf of the State by An Post and the Prize Bond Company.

Insurance Costs

 78. Deputy Joanna Tuffy Information on Joanna Tuffy Zoom on Joanna Tuffy asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan the protections there are for holders of life insurance policies against insurance companies unreasonably and arbitrarily increasing the premiums to be paid by the policyholder; and if he will make a statement on the matter.  [32477/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan At the outset the Deputy should note that neither I nor the Central Bank has the power to intervene in such matters as pricing of insurance policies is a commercial decision for firms to make themselves based on the risks involved.    It should be noted that consumer issues are covered by the Central Bank’s Consumer Protection Code which amongst other things sets out a series of general principles about how financial service firms (including all insurance companies) should interact with their customers. The Code however does not prohibit or restrict an insurance company from increasing its annual premium rates, as this is a commercial decision for the company in question and is generally determined by such issues as higher claims volumes, and the nature of the product.

  My Department has previously had a number of enquiries about this type of issue and it would appear that in most instances people have what are known as “Whole of Life” insurance policies. The Central Bank has advised that premiums for such policies are not fixed and can increase over the duration of the policy. “Whole of Life” policies which cover the policyholder for their entire lifetime while the policy is active must be distinguished from “Term Life” insurance policies which cover a fixed period of time such as 10 or 20 years and have a fixed premium unless index linked. Finally, it should be noted that if a policyholder has a complaint about an insurance company not honouring a claim on a policy, they can refer the matter to the Financial Services Ombudsman for adjudication
http://www.financialombudsman.ie/.

Banking Sector Investigations

 79. Deputy Michael McGrath Information on Michael McGrath Zoom on Michael McGrath asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if he will state, in respect of each of the former covered institutions, if internal and-or external telephone calls were recorded by the bank; when the recording of telephone calls commenced; the current practice; if any such recordings from the period 2008 onwards have been passed on to the authorities as part of their investigation into certain matters associated with the banking collapse; and if he will make a statement on the matter.  [32527/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan As the Deputy will be aware banks are required to record phone calls for a variety of reasons. I have not sought access to these recordings as under statute the Garda Síochána are the body responsible for criminal investigations in the State. I understand that the Garda Bureau of Fraud Investigation have requested access to various documents/materials in the banks, including audio recordings, and that the banks have fully complied with these investigations to date. It would be completely inappropriate for the Department of Finance to act outside of its legal powers and interfere with any investigation that could compromise potential future criminal or civil investigations by the bodies responsible under statute. Any phone calls that are relevant around this period may feature as part of the forthcoming banking inquiry for which the legislation is currently before the House. Under the proposed legislation responsibility is assigned exclusively to the Houses of the Oireachtas to determine the requirement for a formal inquiry, the terms of reference of that inquiry and the procedural and organisational aspects of the inquiry.

Bank Liabilities

 80. Deputy Michael McGrath Information on Michael McGrath Zoom on Michael McGrath asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if he will provide the official breakdown by class of liability of the total amount of bank liabilities at 30 September 2008 covered by the bank guarantee announced on that day and subsequently enshrined in legislation. [32528/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan The Deputy will be aware that details of bank funding profiles, including a breakdown of the aggregate amounts of the liabilities of the covered banks for any given period, received by my Department in the course of official communications and which are not a matter of public record are commercially sensitive. However, in the case of the period specified by the Deputy, 30 September, 2008, the information requested is already available on public record as published in the Nyberg Report in March 2011 http://www.finance.gov.ie/documents/publications/reports/2011/nybergreport.pdf. I repeat the figures published in that report (page 77 refers) for the Deputy’s convenience.

Funding Profiles
Customer Deposits€173.2bn
Interbank Deposits€49.1bn
Senior Unsecured Debt€124.2bn
Financial Instruments€0.7bn
Asset Covered Securities€15.8bn
Dated Subordinated Debt€12.2bn
Total€375.2bn
 

Central Bank of Ireland Investigations

 81. Deputy Michael McGrath Information on Michael McGrath Zoom on Michael McGrath asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if he will provide details of each of the separate investigations currently under way by the Central Bank of Ireland into the banking collapse; the subject matter being investigated; if he will provide an update in respect of each investigation; and if he will make a statement on the matter.  [32531/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I am informed by the Central Bank of Ireland that in January, 2009, it (the “Bank”) commenced an investigation into certain matters in relation to Anglo Irish Bank. The investigation focused on the unwinding of CFD positions in Anglo Irish Bank, the back-to-back loans with Irish Life and Permanent and loans to directors and connected parties. In May, 2011, the Gardaí informed the Bank, following consultation with the Director of Public Prosecutions, that to proceed with the Bank’s investigations at that time could prejudice any future criminal prosecutions. Accordingly, the Bank decided to defer its investigation but has kept this decision under review. Given the seriousness and sensitivity of criminal proceedings and the strength of the sanctions available to the Gardaí and the Office of the Director of Corporate Enforcement (ODCE), the Bank considers that this is the most appropriate approach to take where there is a reasonable possibility of multiple proceedings. Regular liaison with these agencies is continuing.

In relation to Irish Nationwide Building Society (INBS), an investigation into historical lending practices at INBS is at an advanced stage and, once concluded, decisions regarding any possible future enforcement proceedings will be made.

In addition to the above two investigations, the Bank commenced a review in June, 2011, of the fitness and probity of all sitting directors of the six banks and building societies covered by the State guarantee. This review concluded in June, 2012. In respect of a small number of directors, the Bank investigated more thoroughly their individual roles and responsibilities during the period leading up to the present banking crisis. During the period of the review, many of the long-standing directors of the six institutions have resigned.

In respect of any directors who continued in their roles into 2012 and beyond and who were in place prior to 2008, the Bank concluded that, based on the evidence available, it had no reason to suspect the fitness and probity of those individuals. In some cases, this decision was taken within the Bank and, in others, the Bank sought an external opinion on the material available.

In respect of any directors of the institutions, including those whose tenure goes back to before 2008, the Bank will continue to carry out its role in respect of the supervision of the fitness and probity of those directors. Where any information comes to light to give the Bank reason to suspect that the Bank’s standards may not be met by any individual director, then the Bank will commence to investigate that information in a thorough and comprehensive manner and take any action that may be warranted using the powers available.

New applications to sit on the boards of any of these institutions which remain under the Bank’s active supervision will require the applicants to establish, to the satisfaction of the Bank, that proposed directors meet the Bank’s minimum standards of fitness and probity.

In addition to the above, the Central Bank is carefully studying the various transcripts emerging in relation to Anglo Irish Bank. This is something that is viewed very seriously. The Central Bank will be liaising with the Gardaí in this regard and is also examining whether or not any breaches of regulatory requirements may have occurred arising from the information contained in the transcripts.


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