Written Answers. - DIRT Repayments.

Pat Carey

Question:

482 Mr. P. Carey asked the Minister for Finance if, in view of the unfinished negotiations between AIB and the Revenue Commissioners about its outstanding liabilities arising from the DIRT inquiry, he will consider withholding the repayment to AIB of £70 million arising out of the ICI collapse and the repayment of the balance of £30 million to Icarom; and if he will make a statement on the matter. [20324/00]

The repayment of £70 million to which the Deputy refers was made by the Central Bank to AIB on Friday, 29 September last, in accordance with the terms on which it was deposited by AIB with the Central Bank in 1985 as part of the funding arrangements put in place at that time for the High Court administration of the Insurance Corporation of Ireland, now called Icarom.

Those funding arrangements involved the Minister for Finance making a repayable advance of £100 million to the High Court Administrator of ICIvia the insurance compensation fund. That advance was funded by a £100 million loan to the Minister for Finance from the Central Bank which was funded in turn by a £70 million deposit from AIB and £30 million of the Central Bank's own resources. All of these arrangements were scheduled to terminate not later than 1 October, 2000. Accordingly, on 29 September, 2000 Icarom repaid £100 million to the Insurance Compensation Fund from the company's own resources and this was repaid to the Minister for Finance and in turn to the Central Bank. The £30 million to which the Deputy refers represented the Central Bank's own resources.

The repayment of the £100 million loan on 29 September 2000 effectively ends the arrangements which were put in place in 1985 for the funding of the High Court administration of the Insurance Corporation of Ireland which mainly involved the repayable advance of £100 million and an annual interest subsidy of £7 million payable by AIB and other banks over the 15 year term of the £100 million repayable advance.

The ending of the 1985 funding arrangements does not affect the additional funding arrangements which were put in place in 1992 and which provided for an interest free loan of £32 million from the Exchequer, which is repayable not later than 2012 and for an annual contribution of £8.8 million from Allied Irish Banks for each of the 20 years up to 2012.

The question of negotiations between AIB and the Revenue Commissioners about AIB's outstanding DIRT liabilities is a separate matter.