Dáil Éireann debate -
Thursday, 25 Apr 2024

Vol. 1053 No. 1

Report on Politically Exposed Persons: Motion

Deputy John McGuinness

I move:

That Dáil Éireann shall take note of the Report of the Joint Committee on Finance, Public Expenditure, and Reform, and Taoiseach entitled "Report on Politically Exposed Persons", copies of which were laid before Dáil Éireann on 13th December, 2023.

I thank members of the committee and all those who appeared before us, including departmental officials, to provide an insight into the process used to bring about changes in the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010, which has implications for Members of this House, members of county councils, civil servants and the families of all those involved.

What concerns me most is the process used by the European Union to arrive at the decision to tell member states to include this in legislation. Very few public representatives are involved in that process, which shocks me. The Minister might attend a session once a year or once every two years. The minutes are available, but they are not public sessions. These decisions are reached. Where did all this emanate from? There is a diagram in the report which states that they originated in 1989 and were pushed by the G7. Ireland, as a member of the European Union, is bound by the recommendations and, as I said, the recommendations are arrived at through plenary sessions and the odd ministerial session - I presume that is just to give it a nod - and it goes to the European Union, the European Commission, the EU Council working party and then the European Parliament. By that stage, however, all the workings and wording required to be transposed into Irish law, in our case, is agreed to.

Let us move on to the implementation of it. Members of this House are all politically exposed persons. The implications of that are that we have problems with our banking. Our family members have to disclose that they are associated with a politically exposed person, as if we were all criminals. Councillors go through the same rigorous process. Banks do not really want politically exposed persons as customers because it entails all sorts of monitoring of the accounts, notifications of transactions that might be deemed unusual and it causes further problems in relation to the element of politically exposed persons when the Central Bank audits a bank. If you have a credit union account, the transfer of your salary might be questioned. Transfers within the credit union from current accounts to whatever other accounts people have are questioned. We are notified. The process is delayed. When we make an application for a loan we have to go through a further ten or 12 pages in order to be considered. Many Members have told me that they were not refused loans but that the process was so difficult that they did not bother with it. That is wrong. Some Members' secretaries in the House have been told that they are politically exposed persons and they have the same problems in dealing with their banks or credit unions. The county councillors who are currently meeting in the Seanad to talk about local government are in the same situation.

No one involved in the House or in councils is objecting to a process that will make it all transparent and clear and that will keep us all honest, but this has gone too far. When the sons and daughters of Members of the Houses or of county councillors go to a bank and ask for a loan, they are treated in exactly the same way. Someone has to call a halt to the mad bureaucracy involved here. Otherwise, people will not be interested in politics, not because they have something to hide, but because the regulation is such that it prevents members of councils, the Dáil or Seanad or their family members from functioning properly as they go about their normal business.

My son applied for a loan. It was not refused. However, at the point of approval, it was said to him that he was John McGuinness's son. He had to fill out further pages of an application. That is wrong. I do not know how a mechanic could interfere with me, as a public representative, or the process of decision-making. The interesting thing in the minutes of some of these meetings is that certain civil servants, at a meeting of civil servants as part of the process I just outlined, were taken off the list. If my family members and those of the Minister of State, who have nothing to do with politics, are deemed to be politically exposed persons, everyone working in the public service and Civil Service must be politically exposed persons, by definition. That is wrong.

I have asked the Minister for Finance to address this because this report dates back to Christmas 2022 or Christmas last year, but since then there were further changes to this. Those further changes make it next to impossible to carry out one's business in the way one would normally do. It is not just we as politicians who are affected but family members, relations, and so on. The word "associates" is used but there is no definition around what that is. A bank that wants to be really difficult can take on an extended relation such as an office worker. Is the person cleaning my office a politically exposed person? It is ridiculous and it is not being looked at in a way that would make common sense to anyone. It is just making things difficult. I can imagine that perhaps in Russia or some of the big states within the European Union we might want something like this. If we cannot tailor a piece of legislation like this to cover every eventuality within our own small country then we have certainly diminished our sovereignty. That is a fact.

Looking at the topic we will debate maybe next week, the migration pact, we see the same thing. The European Union decides. There is no real input from the committee. That is just bluff and window dressing. There will be a debate in this House but at the end of the day when that debate is finished, just like the politically exposed persons legislation and the transposition of whatever changes the European Union has made, it will be put into the Irish law. It will be put into our legislation without debate. The committee made various sensible recommendations, one of which was that these changes that affect our lives should be debated by an Oireachtas committee before being finally adopted. The same could be said about that migration pact. Too much is being handed down from Europe and going through this House on the nod without anyone standing up and challenging the European Union. The European Union was meant to be there for the benefit of people, society and all of the member states but in recent years I have seen nothing but the imposition of bureaucracy upon bureaucracy making it almost impossible to function and making this House and the committees of this House just talking shops.

That is what the electorate are railing against during these particular local and European election campaigns. The electorate is railing against the fact that this House does not make the decisions that are relevant to their lives but they come from the decisions made in Europe. If it is anything like the decisions reached on politically exposed persons dating back to the Financial Action Task Force of 1989 and the legislation of 2010 it is no wonder the public believes we are not governing our own country and questions our sovereignty.

I ask that the recommendations made by the committee that has put a lot of work into be considered by the Minister for Finance and that each member state should be able to adjust some of the recommendations being made. No member of the committee or member in politics that I know of anywhere would ask that we not do anything about this issue. It is necessary but somebody has to say "stop". Somebody has to ask for common sense in all of this.

Finally, I hope the Minister of State will address these issues, that the Departments of Justice and Finance will take all of this debate seriously and that we will get some response to the committee's recommendations and to the actions for the future that will protect, legally, all of the Members of this House and all of the people who are in public life. Guess what, during the deliberations and our discussions with Department officials who attended some of these meetings we were told it was desired to extend all of this nonsense to everyone in the country? I am not just saying that. It is there in the report, read it, I just cannot find the page number at the moment. A senior official told us that is what they want to see. Is that the type of country we want, a country that is run by the European Union, that ignores the practicalities of doing business in this State, that treats everyone like a criminal? There is no opportunity for the political system in this House or the committees to actually make a change that makes sense under the regulations that the European Union wants to introduce here and wants to have transposed into Irish law.

We encourage people to join political parties and get involved in politics. I do not care whether they are independents or what party they join. I love to see young people coming into politics, both men and women, but this would put anyone off.

The UK banks are now starting to charge an enormous amount of money to maintain these accounts. If that is the case I want to know what our Central Bank will do when that starts to happen in this country. The banks are a law unto themselves. I have heard from business people who are politically involved and hold office in the UK; they have told me they cannot get their business accounts to function as they should because everything is being delayed. It is not that they are doing anything wrong but maintenance fees are being charged even on business accounts. Will Ireland arrive at that point? Is it really fair that a politician's secretary be classified as a politically exposed person? Is a mechanic who is the son of a politician or a daughter going for a loan exposed to the same rigours and nonsense contained in some of what is being set out for us?

Minister of State at the Department of Finance (Deputy Neale Richmond)

I sincerely thank Deputy McGuinness for his contribution and the entire committee for sponsoring this motion. I also thank everyone who contributes to the work of this committee both in terms of the secretariat and within Deputy McGuinness's office. I was still a member of this committee when we began the discussion on this report, as the Deputy will recall, but in the context of this afternoon I have noted the final report of the joint committee entitled Report on Politically Exposed Persons. It is evident it was the result of a significant amount of work and I acknowledge the cross-party work of the committee in its efforts to identify and present recommendations in such a comprehensive but, crucially, accessible format. The approach has been valuable given the importance of the matters covered by the report. I assure the Deputy it deserves and will receive the response he requested so far in this debate. I also thank the joint committee for acknowledging in this report the importance of anti-money laundering and combating the financing of terrorism, AML-CFT, measures. The effective implementation of these measures are vital for ensuring Ireland has a robust domestic framework for combating money laundering and terrorist financing. These measures ensure we are compliant with not only our EU obligations but also international standards. We enter into these obligations voluntarily and by choice. They are not sent down to us by some foreign entity. Compliance with such standards is also important for the robustness of our financial sector and businesses in the country. It is critical that persons dealing with Irish companies and State agencies have the utmost confidence in our AML-CFT regime. This reporting knowledge is the obligation to apply enhanced customer due diligence measures as an important aspect of Ireland's framework for combating money laundering and terrorist financing.

The assessment of the joint committee is that in the coming years these measures are likely to impact on an ever-increasing number of citizens. As such, it indicates these measures must be consistent and fair in their application, including when applied to politically exposed persons. I am aware of the effect the obligations relating to politically exposed persons have on those holding prominent public functions, and their family members and close associates. I am not just aware of it; I live it, just like Deputy McGuinness. I can empathise with him and have been through the experiences he and his son have gone through.

I fully appreciate there is a level of frustration with this impact. However, I also note and appreciate the joint committee's acknowledgement of the risks attached to politically exposed persons and the constant need for enhanced due diligence when undertaking financial transactions. In fact, there is a balance to be struck to ensure confidence and trust in people designated as politically exposed persons and the need to demonstrate to the public there are measures in place to do this. It is important to note that classification as a politically exposed person is a preventative measure in line with the international best practice risk-based approach to anti-money laundering used on a worldwide basis. Such a classification in no way implies involvement in suspicious activity on the part of any individual, but it is intended to apply greater vigilance where greater risks lie.

As mentioned in the report, there are five recommendations which are variously for the Minister for Finance and the Departments of Finance and Justice to address. Recommendation 1 is that a review should be undertaken to examine anti-money laundering measures covering the impact of enhanced due diligence measures on politically exposed persons, including family members and close associates. The Minister, Deputy McGrath, has asked officials in the Department of Finance to commence the necessary preparatory work to address this recommendation immediately. This work will be undertaken in consultation with the Department of Justice and must seek information from relevant stakeholders, including Members of the Oireachtas. We invite them to make submissions in advance, if they would like to do so. The completion of this review will assist in understanding how the measures required regarding politically exposed persons, laid out in section 37 of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010, are being applied in practice.

Regarding the report's other recommendations, officials will engage with the joint committee to determine the best approach to addressing each of these. However, giving effect to recommendation 3, which seeks to ensure all significant directives emanating from the EU are discussed by a Dáil committee prior to agreement may, realistically, prove challenging. This is because the process of negotiating directives can be lengthy and complicated. It is also unclear at what earlier stage in that process the committee considers it appropriate the draft directives should be discussed. This is a personal opinion. My experience as a member of the Employment, Social Policy, Health and Consumer Affairs Council, EPSCO, was that a directive that was finally voted on was grossly different from the draft version we discussed only two weeks earlier. A common-sense approach needs to be taken, but I know the committee will support that. Regardless, officials will engage with the committee to identify what procedures should be appropriate in this regard, noting the new role of the Seanad EU supervision committee that is in place.

Regarding recommendation 4, I note it is the Minister for Justice who issues guidelines to competent authorities regarding functions in the State that may be considered prominent public functions. The current guidelines were issued on 20 January 2023 and provided to competent authorities. While the policy and legislation on politically exposed persons is kept under continuous review, the guidelines have only been issued very recently by the Department of Justice. The new EU anti-money-laundering package will need to be analysed carefully to determine whether any amendments to the guidelines are warranted. A review to be carried out regarding recommendation 1 of the report may also have a bearing on this analysis.

I would like to briefly return to a point I made earlier, namely, that the report acknowledges the importance of anti-money laundering measures. As I said, such measures are not only a matter of EU law but are also reflective of international standards. International standards in the area of anti-money laundering and combating the financing of terrorism are set by the Financial Action Task Force, FATF. Ireland is a long-standing member of this intergovernmental organisation which is based at the OECD in Paris, having been a member since 1991. Thirteen of the other EU member states are also members. In overall terms, the 38 most advanced global economies are members, as are the European Commission and the Gulf Cooperation Council, along with observers such as the IMF, the World Bank and others.

As a member of the FATF, Ireland has committed to upholding these international anti-money laundering and combating the financing of terrorism standards. Indeed, Ireland's anti-money laundering framework will be assessed as part of the FATF's in-depth peer review process in the 2027 to 2028 period. We are currently rated by the FATF as compliant with its recommendations regarding politically exposed persons and it is important we continue to maintain an anti-money laundering framework which is aligned with these standards. EU anti-money laundering legislation largely reflects FATF standards and this is desirable so that obligations in this regard are not required to adhere to two different sets of rules.

Regarding politically exposed persons, the current applicable provisions are included in the fourth anti-money laundering directive. As members of the joint committee will be aware, the elements of the fourth anti-money laundering directive relating to politically exposed persons will soon move into a new directly applicable anti-money-laundering regulation. This regulation is nearing finalisation. It is currently subject to votes in the European Parliament, which concluded in the past hour or so. It is expected it will apply from mid-2027.

It should be noted that this new legislation includes some additions to the current definition of a politically exposed person. These additions to the definitions were not advocated for by Ireland. However, it is relevant that many other member states had already included these categories of persons in their domestic definition of politically exposed persons and, as such, these additions were ultimately incorporated into the final text of the regulation.

As I stated previously, I am aware of the effect the obligations relating to politically exposed persons have had on those holding prominent public functions, as well as their family members and close associates. To reiterate, I appreciate there is a level of frustration with this. However, I also appreciate the joint committee's acknowledgement of the risk attached to politically exposed persons and the need for enhanced due diligence when undertaking financial transactions. Therefore, as I have said, these are not only obligations stemming from our membership of the EU; they are also in accordance with best practice and international standards.

If we wish to maintain a well-regulated financial sector and a robust framework for combating anti-money laundering and terrorist financing that encourages other countries to do business with us, we must ensure we continue to enforce the highest international standards. However, I clearly agree it is also important these obligations do not prevent people from unfairly accessing routine banking activities and financial services or deter people from becoming involved in public life.

I underline and wholeheartedly state that I encourage everyone to get involved in the political process. I do not care if someone wants to get involved as a member of a political party, be it my own or any political party represented here or otherwise, or as an Independent, with Independent movements or campaigning organisations. It is a civic obligation as well as a great opportunity for many different people.

I welcome the joint committee's call for a review. I hope we can ensure these obligations are implemented in an appropriate and risk-based manner. In this regard, I thank the Deputy and committee for their work.

An Ceann Comhairle

Before I call on our colleagues, Deputies Connolly and Conway-Walsh, I should declare a personal interest in this. I have had experience as a father, in particular. I saw my four children, as teenagers and students, open credit union accounts with the proceeds of their part-time jobs. Each year, they received a request from the credit union to explain where they got the money from and to show that I had not pilfered or siphoned it off from somewhere. They were told, when they supplied the necessary information, that the board would then consider if the credit union could continue to provide them with credit union services.

One of my older daughters, who works in the financial services sector, applied to buy a financial product, an investment product. She filled in the prospectus, which made no reference to politically exposed persons. Within 24 hours, she was refused permission to acquire the product because the company, which was reputable, told her she was politically exposed. Therefore, she could not have the savings product. Meanwhile, I look around me and see considerable numbers of properties being acquired through cash sales. I see very little happening about that. That raises issues, in my view, about money laundering. That is my declaration of interest.

Deputy Catherine Connolly

I thank Deputy McGuinness and the committee. I took the trouble to read the report. I have read many reports since I came into the House. This one has truly horrified me. I heard various Deputies, including Deputy McGuinness, make reference to this issue and, as we say in Galway, I thought they were off their trolley. I did not take this issue seriously, even though I had a legal background. I hear the Minister of State is open to a review and the Government will review the situation.

That review will be crucial. For those who might be listening to us in due course, although I am not sure there will be many, I should state I am described as a politically exposed person, PEP. My bank account is scrutinised unknown to me, as are my deposits, and staff are aware of me when I go into the bank. I have no problem with any of that; indeed, in that regard I can stand on the high moral ground, which is a dangerous place to stand. I do it reluctantly. I have one source of income; it comes straight from the State and comes with a harp on it. I cannot imagine how I could be asked any questions because you can just google to find out my salary and the salaries of all Members. We must have the most open and accountable system in respect of what we earn. My monthly payment goes in and it is there for everybody to see. It comes out either by cash withdrawal or by cheque.

On reading the report, I found, to my consternation, that this goes back to 1990, following a directive. Let us look at the language used. The directive was followed by the 2010 Act in Ireland. I found, to my consternation, that I am included under the scope of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010. I give out about Deputies’ and parties’ policies, but for any Deputy to come under this is just unacceptable. I am not a terrorist, nor do I smuggle or launder money. I would stand up for every Deputy in regard to this. This is awful.

Deputy McGuinness was looking for a page in the report. It was page 16. His interpretation of comments made by the finance official to the committee was that, while we think it is bad now, it will get worse. The official told us there was a directive but that it will become a regulation, as the Deputy has said. That would mean instant applicability in Ireland. The official stated the issue is not just local to Ireland as all the states are feeling the pain of this. It is nice that somebody is feeling our pain. The official added, “The consensus seems to be that in a balance of interests, family members and associates have to be included.” I will come back to the questions of who defines “associates” and how extensive the family is. I cannot see this information anywhere.

The official also said, in respect of what Deputy McGuinness was seeking to know, “what we are talking about here, is going to become more the norm”. It will become the norm for everyone. The official went on to tell us why:

Fingers have been so badly burned, by various money laundering scandals and the collapse of the financial system several years ago, that the risk appetite is very low.

We are in this group. I had nothing to do with the financial collapse. Most politicians, if not all, had nothing to do with it but the very banks that had a major part to play in it are now supervising our accounts unknown to us, following everything that goes in and out. As I understand it, they can outsource this. I would like the Minister of State to clarify the processes in place, who is monitoring, the outsourcing that has been done, what review has been done up to now, and how it took a committee to ask the Government to carry out a review. At what stage does the monitoring stop for me? When did my risk assessment finish? Who did that in the bank? When I go into a bank to withdraw money from an account, which official is monitoring me? I am using the example of myself, based on the very limited high moral ground I am talking about and which I am most uncomfortable with, just to illustrate the point.

The report has made six recommendations, all of which I endorse, but when it comes to the review I would like the committee to have an input. The foreword of the report repeatedly acknowledges the importance of anti-laundering and the concerns and reasons in that regard. How ironic it is that the very institutions that led us into the mess in the first place are the ones doing the monitoring, but not in an open and accountable way. We know the percentage of money laundering and terrorist financing comprises a significant and costly global threat. The United Nations Office on Drugs and Crime estimates that illegal money worth between 2% and 5% of global GDP, or approximately $800 billion, is laundered in the world each year. It would be very easy to see what percentage of Deputies’ money is part of that. What we are doing here is making a presumption that all elected officials are guilty until proven innocent and we do not even know the process. Kafka comes to mind. I found his various books very difficult to understand as a young student but I am more than familiar with them now, in English and Irish. The Kafkaesque world that is being created here makes absolute sense because of the presumption that we are guilty until proven innocent.

The proposals are changing all the time to include more and more people and to result in automatic implementation in our country. If a councillor comes up to me and asks what a PEP is and asks whether I am one, I try to explain it is a politically exposed person, but I cannot confirm whether county and city councillors are PEPs. Deputy McGuinness referred to the discussion on the importance of local government. It is ironic that, when people hear about PEPs, very few will want to stand for election. I will not refer to my own family because everyone’s family is now in the picture – our sons, our daughters, our grandchildren. Perhaps our aunts and uncles are also included but I do not know.

I do not know how many times I have stood up here and quoted the Irish Council for Civil Liberties and the Irish Human Rights and Equality Commission, which talk about legislation being specific, fair, proportionate and existing to achieve a specific purpose. What is the purpose we are trying to achieve with the measure under discussion? Are we now money launderers and terrorists supplying finance to terrorist organisations? That is the framework. It is extremely dangerous for democracy that we would be framed like that. I have repeatedly advocated openness and accountability. We should absolutely monitor what we get but not in this manner. It is positively disgraceful. I understand that under this vague legislation, accounts can be closed and money can be frozen. The account of the councillor, the Deputy and the family can be frozen if there is any suspicion. We do not know whose suspicion because we are not told. Can the Minister of State imagine a councillor going into a bank only to find his or her account has been frozen, or me going in on Monday only to discover that? Imagine what it would do to my reputation. Although we are repeatedly told by officials that this is not to do with defamation or casting aspersions on one’s character but with prevention, we must ask what is being prevented. When I got a salary as a councillor, it went into a bank account or the credit union. This is also the case now. At some stage, sense has to prevail on this and we should examine what is happening. The Government is denigrating the world of politics because of the sins of a few.

We heard Deputy Joan Collins earlier. How ironic it is – this is the third time I have used the word “ironic” regarding the world of corporate power and abuse – that absolutely nothing is being tackled, yet directives and regulations are being imposed without proper discussion, with the Department of Finance official having admitted the appetite for risk is very low because things were so bad.

With regard to the analysis of the Irish part, I was struck by the consensus mentality whereby everybody had to sing from the same hymn sheet without questioning it. I do not have the same agenda as Deputy McGuinness or other Deputies on many topics but I stand firm with them on this matter. This measure is absolutely disproportionate and unfair and is not achieving its purpose. There is a complete absence of data on who is doing what and for how long, on the prosecutions and convictions there have been and on whether the measure has achieved its purpose.

Deputy Rose Conway-Walsh

I thank Deputy McGuinness for his work on this as Chair of the finance committee. As the committee’s work was done before I rejoined it, I cannot claim credit. However, it is really good work. It is ironic, as Deputy Connolly said, that banks are scrutinising us although we do not know what information is held, not only on us but also on our family members.

I think everybody agrees with that.

Deputy Catherine Connolly

Staff members.

Deputy Rose Conway-Walsh

Yes. That is not going to achieve what we need to achieve here.

As was said, the report contains five recommendations. It is an assessment of the system that is currently in place. This system stems from the EU directive. As can sometimes be the case with EU directives, it is quite burdensome legislation. The intention is good but the application absolutely needs to be assessed. Is it really achieving what was set out to be achieved? Politically exposed persons are individuals with prominent public functions and are subject to additional enhanced due diligence when making financial transfers. There is greater assessment in how the use of financial services. is assessed That extends to all family members and associates.

It is important that a balance be struck in the context of ensuring that people with access to power are held to the highest standards and that friends or family members with little or no involvement are not unduly impacted in their everyday financial transactions. Their ability to use banking services cannot be made overly difficult, particularly if a family member is not in a very senior or powerful position. It is about proportionality. People have to remember that many of us have family members with intellectual disabilities or other additional needs. They deserve to have bank accounts. Are they under the same scrutiny as we are? It is absolutely not right on so many levels.

The origin of this legislation is the Financial Action Task Force. This task force is a highly influential and independent intergovernmental body. It is tasked with developing and promoting policies that protect the global finance system against money laundering. It is closely linked to the OECD and its recommendations have strong influence on EU and Irish legislation. The Financial Action Task Force is considered to be a global standard-setter in anti-money laundering. The European Union took its work on board when developing this directive. Despite this high-powered international institution, the reality is that money laundering continues on an industrial scale. Money laundering is the process of illegally concealing the origin of money obtained from illegal activities. The modern history of attempting to address money laundering is doomed to failure because we are trying to stop the practice without addressing the complete lack of transparency in the global financial system. The daughter of a backbench TD has to jump through all kinds of hoops to try to open a back account but, at the same time, we are not getting to the heart of how money laundering can be used for corruption.

Sinn Féin supports the recommendations of the report but recognises the limitations of addressing the issues raised without deeper, more meaningful reforms for financial transparency. Additional measures have recently been transposed into legislation, and further changes are due to be implemented. The report focuses on the need for better implementation of these changes to allow for an effective system. One of the greatest challenges we face is the lack of transparency in the financial system. This report highlights only one example of how the public interest is harmed by the continuation of the opaque financial system. Beneficial ownership plays a central role in financial transparency and oversight. The joint committee's report refers to the risk of money laundering being facilitated through the misuse of legal entities such as trusts, shell companies and section 110 companies. Anti-money laundering is completely ineffective against more sophisticated approaches that use these entities. Trusts are more commonplace in Ireland than in many other EU member states due to the common law-based legal system. The committee also noted the use of shell companies and section 110 companies and how the use of nominee shareholders and nominee directors can potentially circumvent transparency of beneficial ownership.

The intention of these measures is to crack down on corruption or ensure it is not happening. It might be convenient for the Government to push that responsibility back onto banks. Banks certainly have a role to play but that cannot be just a box-ticking exercise. Bureaucracy will inconvenience people but will never address money laundering or corruption. We need to strengthen all institutions that tackle corruption and insider culture in the State. That will not be achieved in this directive and legislation alone. We need to empower and resource institutions in this State that can tackle corruption, white collar crime, cartels and bid rigging. That means that the DPP, the Competition and Consumer Protection Commission, the Garda National Economic Crime Bureau, the Standards In Public Office Commission and others will need to be involved. There needs to be a joined-up approach. People need to see powerful individuals being held to account. Too often, scandals come and go and no powerful person is ever held to account.

This report is really important. The key outcome from it is that what comes from the EU needs to be scrutinised at committee level. We need to ensure that we do what it is intended to do and do not make other people pay, in particular the most vulnerable people in our society, but also people who have absolutely nothing to do with the political system.

Deputy Ruairí Ó Murchú

We are all very glad of the work that has been done by the joint committee in respect of politically exposed persons. We could all tell stories about the impact of the nuisance on us from banks and so on, but I do not think anyone is interested in listening to politicians saying how hard a life they have. A number of people, including the Ceann Comhairle, have summed up how what we do impacts on our wider families. We all support the European directive, but we have an issue with its application. We need to make sure that stuff like this is scrutinised to a better degree and that it actually works. As Deputy Conway-Walsh said, the fact is that while we can apply these rules, we are not necessarily getting to the bottom of the wider issues that have existed with corruption and money laundering. We all know the issues in society.

Given the week that's in it, certain communities have seen themselves as being outside of the establishment and without power. Those in power have all the control, and people can be treated in a really abysmal way. We would all commend the bravery of the Stardust families. They showed sometimes what it took to stand up against Government and this State. They are the particular issues that we obviously need to deal with. We need to make matters easier for those who have been wronged. We need to ensure that fewer wrongs occur but that where they do occur, there is acceptance of this and we move on and try to build a better society for all of our citizens.

The Ceann Comhairle spoke about the impact this had on members of his family, with people being made to jump over many obstacles when it came to kids working and their credit union accounts being impacted. We need to get to the heart of the issue of money laundering. Across society, we know the issues with organised crime. We know the issues we have with drug dealers, who have communities on their knees. We know the families that come to us and to the Garda from time to time, and some that do not come to anybody about drug debt intimidation. We know that is happening across society to a significant degree, because there is substantial money in it. Sometimes the people we are dealing with are those who are being impacted by the street dealer, the mid-level dealer, the street thug or even sometimes just by chaotic characters who are used and abused by drug dealers but who cause significant harm in communities.

We know that neither the councils, the Garda nor anyone else have the resources or powers to deal with all these issues. We need to get a hell of a lot better at dealing with those who are at the top of the pyramid. In my town, people have had properties taken off them.

It is brilliant to see. Previously, the bad examples were visible to everyone. They showed how people could make and keep money and have a great life on the backs of their neighbours and communities. It makes a difference when the Criminal Assets Bureau and the other forces of the State take action against these people.

I accept that we are in a different world now. Twenty years ago, someone might have been able to name a dozen drug dealers. These days, he or she could probably sit down and draw up a list of 200 or 300 for every major town. They range from big players down to what are sometimes vulnerable idiots who nevertheless cause great harm to communities, addicts and many families.

I agree with what has been said. The directive's application is sometimes impacting negatively, including on people whom it should not relate to at all, but we need to get real in dealing with what is a scourge throughout society. I am not talking about relying on the Criminal Assets Bureau or the Garda. We need to consider more novel means for dealing with the scourge of drugs. We need to deal with the issues that are impacting on people.

Minister of State at the Department of Finance (Deputy Neale Richmond)

I thank the Deputies for their contributions and the Ceann Comhairle for his declaration of interest. Many important points were made. It is clear that this subject is of great importance, not just to those of us who are Members of these Houses, but to anyone connected to us or our colleagues or to anyone with an interest in entering public life. I acknowledge the work that has gone into this report, including the research conducted, the request for stakeholder evidence and the identification of recommended actions. I share the view that measures relating to politically exposed persons must be fair and balanced while remaining commensurate with the risk. However, it is important to note that, while compliance with our obligations as a member of the EU and the financial action task force to ensure we have a robust framework for combating money laundering and terrorist financing remains a critical aspect, we also need an element of common sense. Officials will now progress a review and engage with the joint committee to determine how best to address the report's other recommendations.

I will endeavour to provide an element of an answer to one or two of the issues that were raised. Deputy Connolly discussed financial institutions and supervision. They may outsource some of the functions, but they ultimately remain responsible. We hope that the review will endeavour to learn exactly the details of the those policies and procedures to provide everyone in the House and looking in with clarity.

The status of the UK's work in respect of PEPs was raised. It has been a topic of much discussion there in headline media. I cannot comment on the exact situation, but we are aware that charges for customers' due diligence may be passed on to consumers there. In Ireland, however, the creation of any new charge must be approved by the Central Bank. I understand that a public consultation on reforming AML and CFT supervision in the UK is accepting submissions until 30 September. Its findings are awaited.

Trusts and similar arrangements are subject to the same disclosure of beneficial ownership requirements as companies. These requirements have been revised in the new EU legislative package, with the obligation to obtain and hold information being moved to the new AML regulation while the provisions on central registers will be in the new directive and the current AML directive. Accordingly, the Criminal Justice Act contains a prohibition on credit and financial institutions entering into correspondent relationships with shell institutions. These provisions are being moved into the new AML regulation, along with similar prohibitions relating to crypto-asset service providers.

Regarding a cross-government group with oversight of anti-money laundering, there is a Government AML steering committee chaired by the Department of Finance. The purpose of the AMLSC is to provide a national cross-sectoral forum for the oversight and active review of Ireland's framework for AML and CFT. Membership of the AMLSC consists of a range of bodies, including the Departments of Justice and Enterprise, Trade and Employment, State bodies, for example, An Garda Síochána, the Criminal Assets Bureau and the Central Bank of Ireland, as well as relevant supervisors, such as designated accountancy bodies and the Law Society of Ireland.

This has been a robust debate and the issues raised are fair and merit serious consideration. They will be considered. The review that is under way to take full account of the report's recommendations will be a thorough one. It is important that all Members feel they can contribute to it, either through Deputy McGuinness's office or the joint committee. With the Minister, Deputy Michael McGrath, and other relevant Ministers, I will undertake to ensure that the review is fair and that, in our examination of the role of politically exposed persons, this does not become a directive that deters people from entering public life, stokes fear or concern or impinges on people's rights or liberties simply because they or their relatives hold elected office, and instead achieves the just and important purpose for which it is set up. That the purpose it was set up for impinges on our daily lives should not allow it to impinge on our reputation or how we do our business in this House.

I thank Deputy McGuinness and his committee for this thorough report.

Deputy John McGuinness

I am delighted that we have had this debate, but not by a long shot am I convinced that the Department of Justice or the Department of Finance understands exactly what we are asking for. The report makes recommendations. In my opening remarks, I stated that it would be essential that any enhanced due diligence measures undertaken by financial services against politically exposed persons, their close associates or their families were balanced, appropriate and fair. We all agree on the need to monitor the source of money laundering – the big picture, as it were – but the directive's application is the issue. There is no need for some of the categories to be included as PEPs. The Ceann Comhairle's private secretary and the ushers in the Dáil are all politically exposed. They meet us every day of the week. Where will the Department say, "Stop", when it comes to extending this measure to every citizen in the State? The application and definition concern me. Deputy Jim O’Callaghan wondered whether a statutory instrument from the Minister might define what a PEP, family member or associate is. The Central Bank could define those terms. It could set out protocols for every bank and credit union in the country to follow. It is that simple. They should exclude the ones that are innocent, as it were, and include the ones that may very well be exposed, ourselves included. We are just asking for what was outlined in the report, that being, an appropriate and fair approach at the level I am speaking of. I am not talking about changing the system up along the line or chasing those who need to be chased. I am asking that we have a common-sense approach.

I am always reassured when Deputy Connolly agrees with the committee. I will say the same of Deputy Conway-Walsh in terms of her involvement in the committee. It is reassuring to know that others, including other member states, feel the pain. Deputy Connolly put it well; the banks monitoring our accounts is the wrong way around. The banks get away with anything and everything, yet the ones who go chasing them, particularly on committees and so forth, are the ones who are being monitored by them. I have no bank accounts. When I go into a credit union, my application for a loan is not dealt with by the loan officer.

It is dealt with by the board of the credit union. I am sure that those who are not familiar with this matter are asking themselves what Deputy McGuinness gets up to that his application has to be dealt with at board level. That is the type of reputational damage that is being caused here. It would make great sense if everything to do with the lives of politicians or civil servants were to be brought together in one Act that was not called the Criminal Justice (Money Laundering and Terrorist Financing) Act. The legislation should clearly set out criteria for people to follow so that our families and staff are protected against some of the nonsense contained in that Act. What about retired Deputies and Senators? Will they continue to be considered politically exposed persons? I am sure they will be. There is no mention of them, but my interpretation of the measure leads me to the conclusion that they, too, will remain included under the definition of a politically exposed person.

I challenge anyone in this House who does not have a Revolut account to try to open one and see what happens. I had one and I had to close it. I opened it out of interest to see what would happen. Revolut does not want us because there is too much scrutiny involved. The Minister of State mentioned the Central Bank of Ireland. The Central Bank must be far more prescriptive about what it believes the commercial banks need to do to be compliant with what is being asked of them regarding how they deal with politically exposed persons and how they view us, monitor us and put further paperwork in our way. That needs to be explained. I imagine that these working groups in Europe are all talking about the big picture, and none of us disagrees with that. This goes back to how this measure is applied and the fact that no one seems to want to define it in such a way that there is no ambiguity.

All Members who spoke have had similar experiences. This report speaks to the issues they and their families have faced in their day-to-day lives. The measure is disproportionate and unfair. The Minister of State has to address that. When a committee meets to decide on this, I ask that it deal not with the macro side, because we all agree on that, but with what is happening to all of us in this House. This measure is badly affecting people who are nowhere near being able to make a political decision. They are nowhere near being in a position in which they could get involved in some sort of corruption or money laundering. They are our family members and staff. We would be doing all of them a terrible injustice if we did not speak about this and seek the clarifications that would give them the same rights as other citizens. They are being deprived of their rights to privacy and to make an application without being judged before they even make it. These rights are hard fought for, yet here we are, Members of this House, and this is happening left, right and centre.

The Minister of State mentioned that other legislation was transposed into Irish law in more recent times. That has not been debated or discussed by a committee. On that issue, as a Sinn Féin Deputy mentioned, those who are engaged in money laundering, all sorts of corruption, the drug trade, etc., seem to be able to open bank accounts everywhere. It is not just an imbalance. It is a crazy and unacceptable situation. Spend time chasing them, not the innocent. It is as simple as that. Apply common sense. Do not be directed by the diagram I mentioned, which frightens me. This started with the G7 in 1989 and involves us. All along that diagram there is very little open political debate that can be followed by way of a public meeting. That is not right. It is not democracy.

I am delighted Deputy Connolly mentioned the danger to democracy. We are open to the accusation that this proposal has not been arrived at democratically. It has not. All the groundwork will be done and dusted before it ever gets to the European Parliament. Then, it will be lost in the fog and madness of bureaucracy and MEPs will vote for it. It has taken a committee of this House to take an interest in the issue and to appeal to our Ministers for Justice and Finance to stop it. I thank Members and the Minister of State for their contributions.

Question put and agreed to.

Cuireadh an Dáil ar athló ar 4.16 p.m. go dtí 2 p.m, Dé Máirt, an 30 Aibreán 2024.

The Dáil adjourned at 4.16 p.m. until 2 p.m. on Tuesday, 30 April 2024.