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Dáil Éireann debate -
Thursday, 26 Feb 1998

Vol. 487 No. 8

Irish Registered Non-Resident Companies: Statements (Resumed).

I apologise to the House for not being present this morning. I had an official engagement with the National Training Centre for People with Disabilities.

The story and controversy which has arisen in the past 24 hours is not new. Financial journalists in all the main publications — Shane Ross, Nicholas Webb and Gene Kerrigan in the Sunday Independent, Gerald Flynn in the Irish Independent and Siobhán Creighton in The Irish Times— have been writing about this matter for several months. Although Deputy Rabbitte and his party sat on their hands for a week before making a public statement, it came as no great surprise to me, the media or the parties which were members of the previous Government. Deputy Owen acknowledged that she was aware of the problem. All the parties which were members of the previous Government were aware of it.

The Government and the Department are determined to find a solution to what is a growing problem. We have not yet decided what form the solution will take. Three measures will, probably, have to be taken — reform of company law, reform of tax law and, perhaps, reform of the money laundering legislation. There are a number of Departments, therefore, which will have to make changes to legislation.

Allegations have been made that, in some sense, the Dáil was misled or information was concealed from it. The following is the question put to me by Deputy McManus on 18 February:

To ask the Tánaiste and Minister for Enterprise, Trade and Employment the proposals, if any, she has for improvement to the procedures for registration and monitoring of companies, in view of the fact that up to 40,000 non-resident companies are registered here but hold no assets or carry out no trading in this State and some of these may be set up for the purpose of tax avoidance in other jurisdictions or criminal activities; and if she will make a statement on the matter.

In response I said the Government was acutely aware of the problems that some Irish registered non-resident companies were giving rise to and of the urgent need to put measures in place to address these problems. At no stage did I dispute the figure mentioned in the question and adduced by Deputy Rabbitte because we do not know what the figure is. We have never sought to exaggerate or downplay it when various financial journalists have raised queries with the Department.

I was asked what procedures were being put in place for registration and monitoring of companies. I said there was a working group, the purpose of which was to come up with workable solutions to what was a difficult and complex issue. I also said the Department was being assisted by the agencies under its aegis, that the "thrust of whatever action is taken in the company law area will be aimed at a tightening up of the registration process consistent with avoiding the imposition of undue cost and administrative burdens on business at large" and that we would "respond swiftly to any reasonable proposals emerging".

Deputy Rabbitte said, "the question asked for the number of companies involved in criminality and so on". I was not asked for that information. If I had, the question would have been transferred to the Department of Justice, Equality and Law Reform. The Deputy is trying to rewrite history.

Deputy Rabbitte did not become aware of this matter for the first time in the last few days. As far back as 15 September 1995 the then Minister for Finance, Deputy Quinn, wrote to Deputy Rabbitte, then Minister of State with responsibility for commerce, to express his concern. In the interests of accuracy I intend to publish both letters. Deputy Quinn said:

However, in view of the fact that the tax measure which we have introduced can only be of limited effectiveness and that in the meantime the reputation of Ireland and that of the IFSC in particular is being compromised by the undesirable activities of certain IRNR companies, I would be grateful if you would give urgent consideration to accelerating the adoption of interim administrative measures aimed at curbing the misuse of this vehicle.

Deputy Rabbitte did not respond for nine weeks. He said:

As you know, the IRNR question will feature on the agenda of the next phase of the Company Law Review Group and it would be very inadvisable, in my view, to consider embarking on significant changes in the company law area until the CLRG has had an opportunity to fully examine the matter.

That was reasonable but Deputy Rabbitte never called a meeting of the group to discuss the issue, although Deputy Quinn had informed him that it was urgent.

Deputy Rabbitte said that he had made great changes in the Companies Registration Office and sought Government permission to appoint an outsider to head the office. He wondered why I, as the great champion of privatisation, did not appoint an outsider. I did not do so for the following reason. On 26 May 1997 a decision was made to appoint an excellent public servant, Mr. Paul Farrell, who was recalled from Brussels to take up the position. He is doing an outstanding job. Is Deputy Rabbitte suggesting that I should have dumped him? I know what Deputy Rabbitte would have said if I had dumped him and brought in an outsider. To highlight the hypocrisy on this issue——

Proinsias de Rossa

The Minister is in no position to talk about hypocrisy.

The letters and inaction speak for themselves. Deputy Rabbitte refuted a comment made last night by the Minister of State, Deputy Treacy, that the file on this issue had been left unattended, and looked for an apology. When the matter was first brought to his attention in September 1995 he did not ask the Company Law Review Group to meet and make recommendations.

That is not true.

If that does not amount to inaction, I do not know what does. There is a problem and we have to address it in a way that will not damage the reputation of Ireland as an attractive place in which to invest or cut off options that bona fide companies operating here need to invest profits. In some countries there is what is called participation privilege and in others the establishment of holding companies is allowed. The purpose is to ensure companies can move profits or investments without being subject to double taxation.

I do not believe anyone would suggest legitimate companies creating 50 per cent of jobs in manufacturing and internationally traded services in this economy should be double taxed if they want to take their money out of the economy. We want to find a vehicle that protects them but closes off the possibility of Ireland being used as a tax haven for those who do not want to pay tax — I have plenty of advertisements dating back years publishing that fact — or those who are using Ireland to launder money made from criminal activity or fraud.

The challenge is a difficult one. As I said earlier in relation to company law, we have to change tax law and we may have to change money laundering legislation. If all those changes are required, the Government will not be found wanting in bringing about that change. We regard this as urgent, damaging to the national interest and, in particular, the debate over the past 24 hours may have highlighted this issue in a way that may give the impression that all companies are engaged in this activity when clearly they are not. The vast majority of companies operating in this jurisdiction, Irish or foreign, obey, honour and ensure the law is implemented and pay their taxes. Our duty as a Government and Ministers is to ensure company law is enforced fairly across the board and that those who do business in and with Ireland know this is a country where laws are fairly enforced. We intend to do that. I compliment the Minister of State, Deputy Treacy, for being the first Minister with responsibility for commerce to set up a group within the Department to examine what changes we could make to company law to ensure it would be effective but would not place an undue burden on small to medium sized enterprises.

Forty minutes have been allocated for questions which will conclude at 4.42 p.m. I call Deputy Owen.

The Minister is missing the point of why we are here today. We are not accusing her of not doing something about the IRNRs because a committee was set up to examine this matter. Will she have the grace to accept that in her reply to a legitimate question raised by a Member she failed to purvey the nature of the note prepared for her to give her answer to that question? In that way she failed to purvey any sense of the urgency required to deal with this matter or any sense that she was concerned about the fact that the reputation of the IFSC and this country was at stake. Now that she has had a chance to reflect will she accept that the answer she gave was not in keeping with the note she had? She said in her reply that among the proposals being considered are some in the company law area, but the note states that the company law section of her Department is recommending that IRNRs be abolished without any grant of exemption but allowing for a transition period. That is not merely tinkering around with company law, that note recommends their abolition. Will the Minister accept that she did not give full and open information on this matter, something she always expected when in Opposition?

No. I remind Deputy Owen that the question asks what plans she has for improvement to the procedures for registration and monitoring companies. We have plans to do that, but we do not know their precise nature. I said in my reply that the thrust of whatever action is taken in the company law area will be aimed at tightening up the registration process. Although that has been recommended by some of the officials in the company law section, it may not be the way to proceed because it may damage bona fide companies operating in this jurisdiction. We want to provide them with a vehicle, which exists in most other countries, to allow them to manage the money they are making in Ireland. That is why we have not come down in favour of any particular option. Non-residency is not a company categorisation. It is a tax issue. There are issues that involve other Ministers, including the Minister for Justice, Equality and Law Reform in relation to the criminality aspect and so on. That was not included in the question notwithstanding what Deputy Rabbitte said this morning.

We never sought to dispute the extent of the problem. Deputy McManus mentioned 40,000 companies, the newspapers speculated there are 40,000 companies, but we have never said that is or is not the figure because we do not know. We have not sought to exaggerate or downplay that figure. We have sought to find a solution and our energy and efforts will be put into finding one once and for all. This matter is urgent and we acknowledged that, but it was also urgent when the Minister for Finance wrote to Deputy Rabbitte on 15 September 1995. It is still urgent and the quicker we deal with this matter the better.

It is patently obvious that the written reply which was intended to be given to the House conveys only a fraction of the information available to the Minister. It is also very obvious that the tone was quite different. We could spend the next 40 minutes beating the Tánaiste into an admission of that, but I do not expect her to admit that and it would probably be a waste of our time. It is simply stating the obvious. In so far as I can I want to be as constructive as possible. A Leas-Cheann Comhairle, will I have an opportunity to speak again as I wish to raise a few questions?

Yes, but I would prefer if the Deputy would confine himself to questions rather than statements so that all those who wish to ask questions will have an opportunity to do so.

I intend to do that. Will the Tánaiste indicate what she regards as a legitimate use of an IRNR? What is the legitimate purpose for which those companies are set up?

It is used where a company doing business in Ireland wants to take its profits out of this country and invest them elsewhere without having to pay double taxation when it reinvests. It is to give such companies a legitimate vehicle with which to move their money. It is a route through which companies move money. In Holland and Belgium companies use a holding company mechanism and in other countries they use a participation privilege mechanism. By virtue of that participation privilege they are not prone to double taxation. It is important we do not place any restrictions on those companies which have made such an enormous contribution to our economic growth by investing in the economy and employing 50 per cent of those employed in manufacturing and internationally traded services, but at the same time we must close down the capacity for that mechanism to be used for illegitimate activity, money laundering or as a tax haven. One of the options being considered is that we would link the companies that would use that vehicle for investment activity here with their domestic activity and that may be a way of avoiding damaging bona fide companies. Another option is that we could close down the non-residency element for tax purposes.

I do not believe this is controversial and I hope the Chair will indulge me as I am genuinely trying to elicit information. I understand that in the case of the United States of America we have a double taxation agreement and an agreement in place which ensures this does not happen. Most multinational corporations located here are of American parenthood. Am I right in assuming that argument would not apply to them?

No, that is not the case. There is also the question of paying tax on dividends made by those companies. That is the only reason they use them. They use them to manage their investment in a way that is tax efficient.

I believe Deputy McDowell is wrong. The critical issue here is that important information was concealed from this House by the Minister. It is a question of the Minister having double standards, one standard in Opposition and another in Government.

There was an opportunity to make statements earlier and I request the Deputy to ask a question.

Stick to the point.

That is the man who wanted a large bomb thrown on Iraq to kill a few more million unfortunate people.

The Deputy has completely lost it.

Why did the Minister conceal the information in the memo from the House?

It was freely available in the newspapers.

Why did she conceal the information provided by her Department as back-up information if she was answering the question orally? Why did she release a question that did not contain the critical information sought in the question? I wish to draw the Minister's attention to the last part of the question.

This is not an opportunity for Members to make further statements. The Deputy should ask a question.

I asked the Minister a question. The Minister quoted selectively from the question. She left out the last part which is included in virtually every question tabled to enable a Minister to give information which he or she considers important and of which the House may not be aware. The phrase is: "if she will make a statement on the matter". This is common practice because Deputies know the Minister will have more information than they do, so in order to elicit that information they always ask the Minister to make a statement on the matter. That gives a Minister carte blanche to say what he or she chooses, but unfortunately this Minister chose not to give information.

In order that the Minister has the opportunity to answer the maximum number of questions for the benefit of the House, I ask Members to confine themselves to asking questions. There was an opportunity to make statements before we took questions.

I do not dispute that and I do not wish to cross swords with you, a Leas-Cheann Comhairle, but the statements made so far from the other side of the House have been nothing but flannel and fluff.

Give the Minister an opportunity to answer.

The people who ignored the issue and did nothing to sort it out are sitting close to Deputy De Rossa, as I pointed out in the correspondence. The former Minister for Finance, Deputy Quinn, wrote to ask that things be done.

The current Minister praised his predecessor.

That is not in question, it is a matter of double standards and what was concealed.

Nothing was concealed. The question was what improvements in the procedures for the registration and monitoring of companies were to take place in view of the 40,000 such companies. That question was answered in as far as it could be. We said we would tighten the company law procedures but we do not yet know the exact nature of the changes we will make and the other changes required as regards tax matters and perhaps money laundering. The important thing is that we are doing something about it and it will be addressed urgently.

The important thing is that the Minister did not answer the question in terms of the information available to her. It was quite a straightforward question.

What information was not given?

Why did the Minister conceal the information in that memo? The reply ran to one and a half pages but there are five pages of information in the memo. The Minister's officials clearly believed that information was relevant to the question, otherwise they would not have put it in the brief.

Part of the back-up documentation to help the Minister deal with oral supplementaries was the definition of an IRNR company — the Deputy will be familiar with the procedure because he was a Minister. I presume if Deputy McManus asked the question she knew what an IRNR was. The memo gave the Minister a handle on the issue in a general way and this is common practice. It gave information and educated the Minister about various aspects in anticipation of supplementary questions. The question asked by the Deputy was answered.

But only the specific question was answered.

If this was such a gem of concealment, why did Deputy De Rossa wait a week before making a statement about it? The question was put down on 18 February, the Deputy received the response but the statement took another week.

It is the Minister who must answer because she was involved in concealing the information.

Deputy De Rossa is not usually shy about making statements about these matters.

The Minister is clearly embarrassed.

There was no other news that day.

Double standards.

In the context of the by-elections it was clearly a political and hypocritical decision, and the Deputy knows it. His colleague did nothing about it.

The Minister referred to a letter from Deputy Quinn in 1995 when he was a Minister. Is it her belief that the previous Government had access to this information but did not bother to look for it?

I want to be fair to Deputy Quinn so I will publish the letters later because if we are to have an informed debate it is important that we have accuracy. There has been concern about this matter for a considerable time and not just in Government circles or in the IFSC — many people have known about it. The difficulty has been finding the correct mechanism with which to address it. Deputy Quinn as Minister for Finance sought to address it in 1995 but he thought the measure would make only a minor difference. The last Government was aware of it, Deputy Quinn described it as urgent on 15 September 1995 and wrote to the then Minister of State, Deputy Rabbitte to deal with it by way of company law. It was not dealt with and has not been yet, but it will be.

Did the last Government have access to the information contained on the memorandum and when did that information first come to hand?

The same information was available to us. There was no especially new information except that there is a new working group coming up with suggestions. The IDA has also made proposals. The big concern is to protect bona fide investors in the economy and if we can do that without imposing further burdens on the registration process for small and medium sized companies, we have the capacity to deal with it. We must find a way of dealing with the problem that does not throw the baby out with the bathwater. The group established in the Department by the Minister of State, Deputy Treacy — which includes the companies registration office, Forfás, the IDA and the company law division of the Department — will produce amendments to the company law which will deal with some aspects of the matter but there also must be changes to the tax code and perhaps to the money laundering legislation.

Is the Minister asking us to believe that a question which states "some of these may be set up for the purpose of tax avoidance in other jurisdictions or criminal activities; and if she will make a statement on the matter" did not at the very least require her to say either that those companies were not being used for those activities, or that they were, as the memo states? Is she prepared to admit that she did not fulfil the needs of the question by giving more information?

When she went to Brussels with the Minister, Deputy McCreevy, to discuss the level of corporation tax was she aware — and if not, should she not have been aware — that one of the reasons Ireland was in major difficulties about corporation tax levels was that our EU partners felt IFSC companies had the benefit of bringing inward investment into Ireland which was not going elsewhere? If she was so aware, what information concerning these companies was discussed in Brussels? If it was discussed, why did the Minister not imply more urgency and concern in her reply? The reply was intended to get the matter dropped and the Minister hoped no one would come back on the matter. The memo was the only way we would discover there was more information.

Does the Minister know what type of criminal activity provided the funds for these accounts? Was it Russian or US Mafia money, did it come from South America or where did the criminal activity take place? The memo stated that some of these companies have been found to engage in undesirable activities. There has been general discussion about the use of legitimate companies for money laundering but does the Minister have specific information about specific companies in Ireland which have received money from this activity?

The matter was not discussed in Brussels at the meeting she mentioned. What was of concern in Brussels and among our fellow EU members is Ireland's 10 per cent corporate tax rate, by virtue of which many companies are attracted to Ireland. The EU wants us to move to a standard low rate rather than a rate which is seen as a State aid, and that was the issue.

Does the Minister expect us to believe that? What was at issue was the confusion between those companies and IFSC companies.

That is not true. The criminal activities are a matter for the Department of Justice, Equality and Law Reform, which the Deputy will know, as a former Minister in that Department.

The Minister's Department is saying this.

The note states that over the years it has been suggested that some of these companies were involved in money laundering, fraud, share pushing and similar behaviour. In particular, the Garda bureau of fraud investigation gets a small but regular number of inquiries from police authorities around the world about these Irish registered non-resident companies.

Another part of the memo states that some of these companies have been found. That is rather specific.

I do not know about that, it is a matter for the Department of Justice, Equality and Law Reform and I am not aware of which companies they are.

Perhaps Deputy Owen found them when she was Minister.

In The Irish Times recently, Siobhán Creighton wrote about a company which was being investigated by the Portuguese authorities and some of these companies have been the subject of articles in various publications. Which companies were involved in fraud is a matter for the Department of Justice, Equality and Law Reform and the Garda authorities, it is clearly not a matter for me. I do not know how many such companies there are, which ones they are or the nature of the frauds.

Our Department is concerned about closing off any existing loopholes in company law. We do not have jurisdiction over other criminal or tax issues, which are matters for other Ministers. We want to move forward on an agreed basis.

It may well be the case that when the Government reaches some conclusions on this matter we will consult with the Opposition. We are quite open to consultation with others. There has been widespread consultation with outside parties, private interests and State bodies which are affected, such as the IDA and Forfás. It is clearly not a question of trying to conceal or be secretive about these matters. As I said, they have been the subject of numerous articles by financial journalists over a long number of months.

I call Deputy Rabbitte.

We get our information here, not from newspapers. Are we supposed to read newspapers now to get our information?

Deputy Rabbitte, without interruption.

The Deputy should read her letters first.

Deputy Treacy is trying to put the blame on an official in his Department.

Deputy Owen must allow Deputy Rabbitte to speak

I want to deal with the two charges which the Tánaiste levelled against me, which I suppose I will have to do by way of question. The first concerns the appointment of a chief executive of the Companies Office and the second concerns a letter from the then Minister for Finance. Before I deal with those questions I wish to ask the Tánaiste whether she agrees with paragraph eight of the internal memorandum which effectively advised her to conceal the information. It is a very important paragraph with which she should be familiar.

I am very familiar with it.

Why is she seeking to turn what she has said is a very complex issue into performance on the issue, as distinct from the issue that provoked this controversy — which is who decided to conceal the extensive back-up information on file which was specifically addressed in Deputy McManus's question and why they did it? Is it not the case that she sought to give the impression this morning that no information was concealed? Is it not true she did not deal with the question of the criminal activity of some of these companies? Is it not true she did not deal with the issue of tax evasion and avoidance raised in the question? Is it not true she did not advert to the number of companies involved — although we know now she did not know the number in any event?

The Deputy did nothing at all about it but just left it sitting there.

Deputy Rabbitte, without interruption.

The evidence is there.

May I put my questions now?

It is a question of how one treats the Dáil, not what one knew.

It is a bit hypocritical.

We are responsible to the Dáil.

(Interruptions.)

Deputy Rabbitte, without interruption.

Is it not the case that the Tánaiste is the third Minister today to acknowledge the complexity of this issue? No Member on this side of the House is disputing that. The issue is why the House was treated in the fashion it was. Why is the Tánaiste accusing me of accusing her of misleading the House when what I accused her of was concealing information?

I now want to accuse her of misleading the House. In respect of the appointment of an outsider and the information she has just given the House, is it not a fact that I took a memorandum to Cabinet on this issue and the other series of reforms I introduced in the Companies Office? Is it not a fact that the Cabinet authorised my proposal to appoint a chief executive officer from outside on a contract basis at assistant secretary level? Is it not the case that that person was designed to go in over the person whom the Tánaiste now uses as an excuse for not implementing my decision? The person concerned, whom I put in when I moved someone else, was at principal officer level. The chief executive was to go in at assistant secretary level. Is that not a fact? Why does the Tánaiste seek to mislead the House about the decision I made? I will come back then.

I will take the last issue first. It is true that provision was made in the Government decision for the appointment of an outsider if that was felt desirable. However, it is also true that on 26 May 1997, one month before I became Minister for Enterprise, Trade and Employment, a decision was made to bring a civil servant home from Brussels to head up this office on a pro tem basis. He is doing an outstanding job. If I had dumped him and brought in an outsider Deputy Rabbitte would have been the first to criticise me.

Deputy Rabbitte rose.

The Minister, without interruption.

If a civil servant is doing a good job that person should be left doing that job.

So the Minister left him there because she was afraid.

The decision was made on 26 May 1997.

Deputy Rabbitte asked me about paragraph eight of the back-up documentation which says "while reference has been made in the recent media coverage to solutions being sought in the tax and company law area, no specific details have emerged". We do not make pre-announcements unless we have something to announce. We have not decided what we are going to do. When Deputy McManus asked what improvement was being made in the procedures we said that the thrust of whatever action is taken in the company law area will be aimed at tightening up the registration process, consistent with avoiding the imposition of undue cost and administrative burdens on business at large. That is what we are going to do but——

That is reasonable and fair.

——we do not know how we are going to do it and avoid causing difficulties for the small and medium size enterprise sector and bona fide investors in the Irish economy. As soon as we decide, we will certainly make announcements about it.

Deputy Rabbitte rose.

Deputy O'Malley is next.

I beg your pardon, Sir. You indicated and cut me off in midstream.

The Deputy sat down.

I did not cut the Deputy off — he gave way to the Minister himself. I did not intervene. I am calling Deputy O'Malley now and I will call Deputy Rabbitte later.

(Interruptions.)

What is happening here is that the Tánaiste is diverting around how she——

(Interruptions.)

The Deputy gave way.

I will call Deputy Rabbitte again, subject to the availability of time.

If she wants to go back over it I will take her over it step by step.

The Deputy gave way to the Minister. I call Deputy O'Malley and will call Deputy Rabbitte later.

May I come in after Deputy O'Malley?

Deputy Owen is next.

Then I will stay in possession.

(Interruptions.)

That is not appropriate. I ask Deputy Rabbitte to resume his seat while I am on my feet. I want to let him know what the procedure is.

He will do what the Chair says or he will go home.

The procedure is that the parties are entitled to ask questions in proportion to their strength in this House. Deputies Rabbitte and De Rossa are members of the same party and both have had an opportunity to ask questions.

On a point of order, the Minister made various charges about Deputy Rabbitte and he is entitled to have them cleared up.

Of course, he is entitled to ask a question but he is not entitled to do so out of turn. I call Deputy O'Malley.

I suggest you use your discretion——

I will call Deputy Rabbitte again.

——to deal with each of the points raised.

I regret that if we keep discussing procedure it will not be possible for me to call Deputy Rabbitte again.

Can I ask the Tánaiste if a company called Repsol Ltd is an IRNR company? Is it resident?

Ask Deputy Rabbitte.

Ask the two directors here.

Is that what we gave way for? Is that Deputy O'Malley's idea of a joke?

He is entitled to ask the question.

Is that the best they could set up between them?

(Interruptions.)

As Deputy O'Malley knows well, there are others in the House who have more expertise on that matter than I do. Perhaps they should answer.

That is pretty pathetic, I never thought the Minister would stoop to that.

(Interruptions.)

I call Deputy Rabbitte.

I wish to return to the question of the discrepancy. The Minister will agree we can leave it to independent commentators to assess what was in the formal parliamentary reply and what was in the back-up documents. It is written down and people can make their own evaluation of it.

Why does she persist with the argument about the dumping of a civil servant? I have put to her that the Cabinet decision was to appoint a person from outside at assistant secretary level, which had no implications for the dumping or removal of anybody. Why does she persist in seeking to give the impression to the House that it was to remove somebody? She knows that the person was to go in over that body.

When the letters are published later they will set the record straight. Deputy Rabbitte made great play in his statement yesterday about all he had done for the company registration office.

I will come to that; it is not in the letter.

When the letters are published later, they will set the record straight. Deputy Rabbitte made great play in his statement yesterday of all he had done for the Companies Office. This is what he said of the Companies Office to Deputy Ruairí Quinn on 20 November: "Very little would be possible and, even if it were, it would be of a minor nature". The Deputy acknowledged that there was little the Companies Office could do.

Why did the Minister not give this information to the House?

Speaking today Deputy Rabbitte said prior to his leaving office he had a vague recollection of it being brought to his attention by the Department of Finance, that proposals were being contemplated which could not have been acceptable to the Department of Enterprise, Trade and Employment. He had a "vague recollection", even though he was in correspondence and supposed to be setting up the CLRG. He never even set terms of reference for them, never mind call them together. We are trying to do something about it, and Deputy Rabbitte sought, in his statement yesterday to imply that this situation was akin to rocking the foundations of the State, that some big crisis had emerged, some huge concealment from the Dáil. It was being compared with the beef tribunal.

The Minister concealed information from the Dáil.

The Deputy knows this is not true. He knows that something is being done about a very serious matter in a sensitive way.

What has the Department done to ascertain how this note for the Minister's information came to be attached to the reply? In the note it is stated that these IRNRs are perceived as being regulated in the same way as companies from the IFSC. What action can the Minister take immediately to ensure that there is no confusion between these companies and the legitimate regulated companies of the IFSC?

That has been the subject of discussion since 1995. Deputy Quinn sought to address it in the 1995 Finance Bill. As he said himself in the letter I quoted earlier, that would only have a minor impact and that he felt company law changes were also required. That is what we are seeking to do to address it. We will do it as quickly and as urgently as we can. For the first time there is a group in the Department attached to the company law division who are looking at possible changes in company law to deal with that aspect. However, it is a wide issue involving other Ministers with different responsibilities. We need to move on at least two fronts, if not three. I assure the Deputy that the Government will move to close off this loophole as rapidly as possible.

What about my first question in regard to how the note came to be attached to the reply to the question?

The reply was prepared with a view to the question being answered orally in the House. The note was prepared as background information for the Minister. The question, question No. 101, was not reached and the question went for written answer. When the reply was being photocopied, this was photocopied with the reply.

What will happen?

Deputy De Rossa seriously misunderstood what I said earlier if he thinks I said the Tánaiste's response was unimportant. I said nothing of the sort. I simply said I believed it would be an inefficient use of our time to spend 45 minutes trying to cajole and browbeat the Minister into admitting what was obvious, namely, that the information was available. I have heard nothing in the past 30 minutes to dissuade me from that view.

Why does the Deputy not ask his party leader about it? He knew all about it. Why not ask Deputy Rabbitte? He had the information all the time.

The Deputy is digging a hole.

The Deputy should ask his questions briefly so that as many Members as possible can get in.

I am making precisely that point. This problem has existed and has become particularly acute in recent years. We will obviously deal with it today, but we must elucidate soon how exactly we will deal with it.

In relation to the information provided to the House, I am advised that from 21 April next, when the Freedom of Information Act is implemented fully, that back-up information will be available as a matter of routine to people who request it. Will the Minister make that backup information available as a matter of routine to the House from that time onwards? On the substantive issue today, can I take it that the Tánaiste does not agree with the view expressed as being the corporate view of her Department in the back-up information, that effectively these IRNRs should be closed off by means of tax measures?

The Deputy is right. Much of this information will be made available after April if persons affected or members of the public want to seek it. I cannot give an undertaking to include everything that comes in a back-up briefing. If I did that I would be accused of stonewalling at Question Time because there would be pages and pages of answers. We seek to answer the questions we are asked and to deal with any other questions that arise by way of supplementary. Clearly we want to close off the loopholes, but we do not want to affect legitimate bona fide business that operates here. We do not want to restrict the vehicle that legitimate foreign investment uses to efficiently manage their tax affairs. If we were to do that it would be very damaging to inward investment. That is why the IDA has expressed such huge concern about the matter. Virtually all our European colleagues and most civilised countries provide some mechanism, by way of participation privilege or a holding company. It may well be that we will link this registration process to IDA activity and thereby close it off to everybody else. Since we have not come to any conclusions in relation to that matter, I do not want to be definite in what I am saying.

For our part, in regard to making changes in company law, we intend to tighten up the procedures to restrict the capacity to use this procedure to register illegitimate companies through Ireland and, as a result, to launder money and evade taxes in other jurisdictions. We want to close off that loophole, and we want to find the most effective way across departments of doing that. That will be done as quickly as possible.

Why did the Minister not say that in the answer to the question?

I want to establish when the information contained in the memorandum first became available to the Department?

The Department has been aware of the problem since September 1995 when Deputy Quinn wrote to the Department. Whether they were aware of it in advance of that, I do not know.

The Tánaiste is saying that Deputy Quinn was aware of this information in 1995. I do not believe he was aware in such detail. Was he aware?

The Deputy should ask a question.

That is what I am trying to establish, and I cannot elicit that information from the Tánaiste. I am not trying to be difficult.

The Deputy is not asking the right question.

I will publish the letters later. As Minister for Finance Deputy Quinn sought, in the 1995 Finance Act to bring in some measure to change the law but, as he said himself, that would have had a minor impact. He said that the reputation of Ireland, and of the IFSC in particular, was being compromised by the undesirable activities of certain IRNR companies, and that he would be grateful if the Minister would give urgent consideration to accelerating the adoption of interim administrative measures aimed at curbing the misuse of this vehicle. He was suggesting that the Company Law Review Group should look at the matter with a view to amending company law.

Is it not the case that the major administrative measure recommended by the Minister for Finance was the reform of the Companies Office and that the office, contained where it was, was unable to deal with the question of monitoring these companies? Did the Minister's officials not advise her in respect of the letter from the Minister for Finance, that they and the Department and the IDA were inveterately opposed to what the Department of Finance was proposing? Is it not the case that the Department requested me to discuss with the Minister for Finance at the time our objections to the finance proposals; that the Department of Justice has since objected to the finance proposals; and that the format being set out is still being resisted, as is evidenced from the Minister's internal memorandum, by the Department? Why then does the Minister seek to give the impression that there was any delay involved here? That opposition and head on difference of opinion on how this problem should be resolved is still extant. Is it not the case that what the Minister of State, Deputy Treacy, accused me of was leaving the file unattended for three years?

Only for two years.

Is it not the case that far from leaving it unattended, I espoused the views, with which I happened to agree, of the Minister's conscientious civil servants in that Department, and do not and did not agree with the Department of Finance proposals? Is it not also the case that all that has nothing to do with why the Minister chose to conceal pertinent, relevant and substantial information in responding to the question posed by Deputy McManus in explicit terms.

I do not know if the Department of Justice objected to this.

It is in the memorandum. Why does the Minister not read it?

We are talking about the 1995 Finance Act.

We are not.

The then Minister, Deputy Quinn, told Deputy Rabbitte——

The Minister is dodging the question.

The Deputies should listen to the Minister.

This is disgraceful. When the Minister was in Opposition she expected everyone to answer her questions.

A Deputy

The problem is that the Deputies do not like the answers.

Deputy Rabbitte said the Minister for Finance suggested changes in the Companies Registration Office. However, the Minister for Finance said:

As you will see from the enclosed representations and Finance journal articles——

The Minister is fudging the issue.

Will she apologise to the House for concealing relevant information——

This is more of the Deputy's theatrics.

The Minister is on her feet and the Deputy should allow her to give her answer.

The nub of the issue is that she concealed from the House the information in this five page memorandum.

I ask the Deputy not to interrupt the Minister.

The then Minister told Deputy Rabbitte:

As you will see from the enclosed representations and Finance journal articles, the business community has realised that this year's amendment to section 141 is far from effective at wiping out the misuse of IRNR companies. While the Revenue Commissioners will be enforcing the new provisions, I am sure you will agree that what is really needed now is a more substantial company law or company law administration approach to tackling the problem. You will, of course, be aware, that, as outlined in the work of the interdepartmental group and the report which was commissioned for that group I am constrained in taking any further taxation measures because, inter alia, of the negative industrial policy repercussions which would be associated with such changes.

He goes on to ask the Deputy to have the company law review group deal with it. The Minister said it was urgent but the group was not even given any terms of reference.

The Minister clearly does not understand the issue.

(Interruptions.)

I am obliged by an Order of the House to conclude questions to the Minister.

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