Dáil Éireann Debate, Tuesday - 13 December 2005
236 Mr. Durkan asked the Minister for Finance if he has satisfied himself that adequate legislative protection exists to ensure the stability of the banking and financial services having particular regard to the ever growing potential problem of hackers ability to infiltrate and compromise regulations; and if he will make a statement on the matter. [39213/05]
View answerI assume the Deputy is referring to the management of operational risks associated with computer systems used by financial institutions.
Financial institutions must cope with a range of operational risks relating to failure in systems due to accidental or deliberate causes, both natural and man-made. Appropriate contingency planning in respect of those risks is a matter for the institutions themselves in the first instance. I am sure the Deputy would not wish to see the State create a moral hazard by suggesting that primary responsibility for such matters should rest elsewhere.
The Central Bank and Financial Services Authority of Ireland works in close co-operation with the Financial Regulator to ensure that financial stability is maintained. I am not aware that either the CBFSAI or the Financial Regulator believes that the work in this area requires any additional legislative powers to be effective.
237 Mr. Durkan asked the Minister for Finance if sufficient protection exists to ensure the integrity of the banking system with particular reference to the updating of legislation to prevent illegal activity such as money-laundering; and if he will make a statement on the matter. [39214/05]
View answer252 Mr. Durkan asked the Minister for Finance if there have been incidences where money launderers, racketeers or drug barons have been able to utilise the banking or financial services to facilitate their operations; and if he will make a statement on the matter. [39229/05]
View answer253 Mr. Durkan asked the Minister for Finance the procedures which exist to prevent the use of the financial services and the banking system by money launderers or racketeers; and if he will make a statement on the matter. [39230/05]
View answerI propose to answer Questions Nos. 237, 252 and 253 together.
Irish legislation on money laundering is set out in the Criminal Justice Act 1994, as amended. Primary responsibility for legislation in this area rests with the Minister for Justice, Equality and Law Reform. This legislation and relevant regulations made by the Minister for Justice, Equality and Law Reform implemented the EU money laundering directives of 1991 and 2001 in Ireland. A third money laundering directive has recently been adopted within the EU. This directive and other international anti-money laundering instruments are currently being examined to assess what legislation is required to give effect to them in Ireland.
The procedures for the prevention of money laundering in the financial system are set out in the Criminal Justice Act 1994. These primarily involve the requirement on financial institutions, and other designated bodies, to identify their customers, to have adequate anti-money laundering procedures in place, including staff training, to keep records and to report suspicions of a money laundering offence to the Garda Síochána and to the Revenue Commissioners. The Financial Regulator requires all institutions which it supervises to comply with the anti-money laundering legislation and relevant sectoral guidance notes, and to have in place the necessary procedures and controls to ensure such compliance. The adequacy of such systems is reviewed by the Financial Regulator in the course of its ongoing supervision of institutions and requirements for improvement are advised to institutions as necessary. The Financial Regulator is independent in the exercise of its powers.
Furthermore, in accordance with its legal obligation under section 57(2) of the Criminal Justice Act 1994, the Financial Regulator is obliged to make reports to the Garda Síochána and the Revenue Commissioners where, in the course of its supervision, it suspects that an institution has breached the relevant money laundering provisions of the Criminal Justice Act 1994.
The Garda Síochána and the Revenue Commissioners regularly receive reports from financial institutions and other designated bodies where they suspect that a money laundering offence is being or has been committed. All such reports are investigated and progressed as appropriate by the relevant authorities.
