Amendments Nos. 2, 18, 24, 26 and 41 to 43, inclusive, all relate to the same core issue, which is the fact that there is what I am concerned might prove to be somewhat of an omission in the Bill. The Bill refers specifically to beneficial partners throughout as individuals and does not give recognition to the fact that beneficial owners may be corporate entities, or bodies corporate. Especially given that we are looking to a very large new tool and product that will be made available and that we are reducing liabilities for limited partners and limited owners, if we only have beneficial owners and the beneficial owners consist only of individuals and exclude corporate entities, I am worried that this could be a really substantial gap in the Bill.
It is particularly important given that the 1994 Act, in section 5(2), states, "A body corporate with or without limited liability may be a general partner or a limited partner and a partnership may be a limited partner." We have in the past established that a limited partner may be a body corporate and that a general partner may be a body corporate. Similarly, in the Irish Funds Industry Association's submission to the Government it made clear that investment limited partnerships are typically professional investors and include public pension funds, sovereign wealth funds, private sector pension funds, insurance companies, endowments and foundations as well as private investors. Given this is the case, the language in the Bill is a concern.
Quite a large number of amendments are grouped together under this point. One of the key points is that the term "beneficial owner", as it relates to an investment limited partnership, means any individual. Therefore, I again respectfully suggest that the Bill will have a serious gap in it if there is any space for beneficial owners to consist only of individuals rather than body corporates. There may be an interpretive answer, but we need to be really clear. We certainly do not want to be at odds with how we chose to clarify these issues in the 1994 Act. That Act went to the trouble of specifying this. Now, however, we have a new phrase. While the 1994 Act deals with the terms "general partner" and "limited partner", here we are talking about the term "beneficial owner". Given that we are introducing this phrase, let us be very clear on it.
Issues of money laundering are very important. One of the elements in the Bill concerns a response to the drive against money laundering internationally, but it is not just individuals but also bodies corporate that launder money, and it is crucial that Ireland, in its register of beneficial owners, includes bodies corporate, which may be involved in such activities or may need to be investigated in the future in respect of such activities. Common contractual funds, for example, allow pension funds and other institutional investors to pool investments, sometimes for tax avoidance purposes. There is nothing illegal in that but it is one of the main uses of such funds.
Some of these funds, the investment limited partnerships, ILPs, will be geared towards institutional investors, pension funds, companies and corporate bodies. If the beneficial ownership register - I am speaking now to the later amendment specifically on the register - only includes individuals, effectively all those bodies will fall out of the function of the register and we would be at risk of not really fulfilling the spirit or perhaps even the letter of the obligations that have come from Europe. The beneficial ownership register comes from that imperative.
The stated primary purpose of the beneficial ownership register is to assist national and international agencies in their fight against money laundering and other illegal acts. Nothing under the Bill as it stands will stop an individual or a group of individuals setting up a corporate body and placing their assets within its legal structures in order to then go on to place those assets in a common consolidated fund or an investment limited partnership. Potentially this could be done by criminal organisations and no paper trail would link to the register in respect of that.
My amendments in this area try to address that issue by ensuring that the definition of beneficial owner is amended to include corporate bodies. At the moment we are providing simply for the PPSN of an individual. However, where the beneficial owner is a corporate entity, its company number or its equivalent business identification number needs to be included in the beneficial ownership register.
As an example of this narrow assumption about individuals throughout the Bill, in another amendment I deal with reference to "birth". The Bill refers to the birth of a beneficial owner, when we might need to specify birth or incorporation.
The Minister of State will understand this is a very genuine concern in terms of not just the impact but also in terms of the extent to which the legislation fulfils one of its key stated purposes. I ask the Minister of State to address the suite of amendments and the wider issue.