I propose to take Questions Nos. 202 and 203 together.
In response to the findings of the ‘Cyprus Confidential’ report, the Government of the Republic of Cyprus has launched a probe into the investigation’s findings, in addition to its on-going work to establish an independent body to investigate financial crimes and sanctions evasion.
Under the EU’s Fourth Anti-Money Laundering Directive, EU Member States are required to create centralised registes of Beneficial Ownership information. These cover information on those who ultimately own or control corporate and other legal entities and trusts. This requirement has been met by the establishment of a number of registers in Ireland including:
• Register of Beneficial Ownership of Companies and Industrial and Provident Societies
• Central Register of Beneficial Ownership of Trusts, operated by Revenue
• Register of Beneficial Ownership of Certain Financial Vehicles, operated by the Central Bank of Ireland.
There are a variety of degrees of access to the information held on the Registers. Competent Authorities and law enforcement officials are granted the widest access, while ‘designated persons’ (i.e. those having anti-money laundering obligations) may access information when conducting customer due diligence. Access by members of the general public is based upon having a demonstrable ‘legitimate interest’.
Those subject to these filing obligations are also obliged to hold this Beneficial Ownership information locally and make it available to Competent Authorities and law enforcement agencies and to ‘designated persons’ when conducting customer due diligence.
In addition, the Safe Deposit Box, Bank and Payment Accounts Register (ISBAR), operated by the Central Bank of Ireland, commenced collection of information from credit institutions in 2023. This register holds information on the ownership of accounts identifiable by IBAN and on safe deposit boxes held by credit institution.
Access to this Register is limited to the following agencies from May 2023:
• The Financial Intelligence Unit (FIU) of An Garda Síochána;
• Other officers of An Garda Síochána engaged in the prevention, detection, investigation or prosecution of a serious criminal offence or supporting a criminal investigation concerning a serious criminal offence;
• The Criminal Assets Bureau (CAB); and
• The Revenue Commissioners, for the purposes of fulfilling their obligations on administrative cooperation in the field of taxation.
Also of relevance is the updated EU anti-money laundering legislative package, on which political agreement was reached last week. This legislation includes revisions to the beneficial ownership obligations and provides increased harmonisation and cooperation of EU member states in the fight against anti-money laundering. It is expected that the new Anti-Money Laundering package will be adopted in the near term.
In addition, I am advised by Revenue that the acts of money laundering and terrorist financing are not Revenue offences and Revenue is not the competent authority to investigate such offences. Under the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010, An Garda Síochána is the relevant body with responsibility for investigating offences of this kind. Tax evasion is viewed as a predicate offence for money laundering, and I am advised that Revenue contributes to the national imperative of countering money laundering and terrorist financing by, inter alia :
• Reducing the opportunity for tax evasion,
• Countering the activities of those involved in drug smuggling, cigarette smuggling, alcohol smuggling, fuel laundering and Intellectual Property Rights fraud,
• Supporting those agencies directly involved in the investigation of money laundering and terrorist financing,
• Cooperating with An Garda Síochána and the Criminal Assets Bureau, including the provision of key personnel with specific investigative and operational skills to the Criminal Assets Bureau,
• Maintaining well-developed links between the Garda Financial Intelligence Unit and Revenue’s Suspicious Transaction Unit,
• Participating in Working Groups such as the Anti-Money Laundering Steering Committee under the aegis of the Department of Finance, and
• Engaging with designated bodies at conferences and industry fora to communicate best practice for Money Laundering Reporting Officers (MLRO).
I am also advised that Council Directive (EU) 2018/822 (‘DAC6’) provided for the introduction of new reporting obligations for intermediaries and taxpayers, the purpose of which is to assist in addressing tax risks posed by certain cross-border transactions that could potentially be used for aggressive tax planning/ evasion. It allows Member States to exchange information. DAC6 was transposed into Irish law in Finance Act 2019 and the regime came into operation on 1 July 2020.
DAC6 places a mandatory reporting requirement on intermediaries who design, market, organise or manage the implementation of a reportable EU cross border transactions. Such transactions include those which may indicate the predicate offence of tax evasion – for example the use of legal entities, arrangements or structures which purport to eliminate reporting of account holders or controlling persons under EU Automatic Exchange of Information Requirements. It also includes transactions which bear the hallmarks of tax avoidance.
Where laundered moneys have been used in such reportable transactions any Irish intermediaries involved are required to file a return to Revenue notifying them of the details of the transactions. Failure to comply with these requirements can result in the application of penalties.
Finally, I am advised that Revenue has a risk-focused response to non-compliance that reflects taxpayer behaviour. Generally, taxpayers are selected for compliance intervention based on the presence of various risk indications.
Revenue’s Compliance Intervention Framework provides a consistent graduated response to taxpayer behaviour, ranging from extensive opportunities to voluntarily correct mistakes up to the pursuit of criminal sanctions for cases of fraud or evasion. Taxpayers who avail of the opportunities to voluntarily correct will experience the minimum level of penalty and generally not risk either publication or prosecution. Revenue will progressively respond with appropriate vigour to taxpayers who do not voluntarily comply. Where tax or duty evasion or fraud is identified, Revenue will initiate an investigation with a view to prosecution.
