Wednesday, 18 July 2012

Questions (63, 64, 65, 66, 67)

Kevin Humphreys

Question:

62 Deputy Kevin Humphreys asked the Minister for Finance if he is concerned at the large daily exchanges of punts to euros that are occurring at the Central Bank of Ireland as documented in a spreadsheet (details supplied); if he can indicate if the Garda Síochána or anti-money laundering compliance unit have investigated this practice at any time since 2002; if he is concerned that the monetary proceeds of criminality or money laundering from before the introduction of the euro could be slowly filtered through this exchange process; and if he will make a statement on the matter. [35598/12]

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Kevin Humphreys

Question:

67 Deputy Kevin Humphreys asked the Minister for Finance if the Revenue Commissioners have investigated the practice of the large daily exchanges of punts to euros that are occurring at the Central Bank of Ireland as documented in a spreadsheet (details supplied) at any time since 2002; if he is concerned that the monetary proceeds of criminality or money laundering or undeclared income from before the introduction of the euro could be slowly filtered through this exchange process; and if he will make a statement on the matter. [35599/12]

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Kevin Humphreys

Question:

68 Deputy Kevin Humphreys asked the Minister for Finance if persons exchanging sums of punts into euros at the Central Bank of Ireland are provided with euro currency in the form of cash or in a cheque; if the Central Bank of Ireland has considered issuing exchanged euros in the form of drafts or cheques; and if he will make a statement on the matter. [35635/12]

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Kevin Humphreys

Question:

69 Deputy Kevin Humphreys asked the Minister for Finance if there is a daily limit on the amount of punts that be exchanged by a person at the Central Bank; if a person’s identity is recorded when they make a transaction at the Central Bank; if he will describe the controls in place at the Central Bank to ensure punts being exchanged for euros are not the proceeds of money laundering or criminal activity; and if he will make a statement on the matter. [35660/12]

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Kevin Humphreys

Question:

71 Deputy Kevin Humphreys asked the Minister for Finance the reason the Central Bank does not provide a breakdown of the list of individual transactions of exchanges of punts to euros on a daily basis; if the sums involved in each transaction are recorded by employees of the Central Bank of Ireland when they occur; if each transaction is recorded, if he will provide the list of individual transactions that occurred in 2011, and to date in 2012; and if he will make a statement on the matter. [35692/12]

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Written answers (Question to Minister for Finance)

I propose to take Questions Nos. 62, 67 to 69, inclusive, and 71 together.

I have been informed by the Central Bank that amounts up to the value of IR£1,000 can be exchanged for euro on the same day subject to checking by the Central Bank for authenticity of the IR£ bank notes. Amounts in excess of IR£1,000 will be accepted by the Central Bank, however value in euro will not be provided in exchange on the same day. A receipt will be issued pending verification/authentication of the bank notes. Payment is processed electronically into the bank account of the lodging party for the appropriate amount. Where bank account details are not provided, a cheque may be issued for the value of the redeemed notes.

Persons exchanging amounts in excess of IR£1,000 are required to complete an exchange form. With effect from 01 July 2012, all lodgments irrespective of value must be accompanied by an identification document. All bank notes are checked for authenticity prior to exchange. The Central Bank informs An Garda Síochána of lodgments or attempted lodgments where the Bank knows or has sufficient reasons to believe that a criminal offence has been or is being committed.

The details of exchanges below IR£1,000 are not captured in an automated system. The details relating to the value of cash received are amalgamated into bulk figures on a daily basis for accounting purposes. Records of individual transactions are not maintained. Transactions in excess of IR£1,000 are not exchanged for cash but are paid into a bank account or by cheque. The Central Bank retains a list of individual transactions including amount, payment date and name of payee. For these reasons it is not possible to provide an individual transaction breakdown as requested by the Deputy. However, I have asked the Central Bank to provide details of individual transactions over IR£1,000 for a number of days since 1 January 2011 which show the highest levels of daily transactions. I will write to the Deputy further on this.

I also understand from the Central Bank that the exchange process is currently under review and that this review will be finalised prior to year end. An objective of the review is to reduce the threshold for cash payments significantly from the current level of IR£1,000. This will lead to a much higher proportion being paid electronically with full audit trail.

The Deputy also asked about investigations carried out by the Revenue Commissioners, the Garda Síochána and the Anti-Money Laundering Compliance Unit of the Department of Justice and Equality. I am informed by the Revenue Commissioners that there has been no general investigation initiated by them into the practice of the exchange of Irish Punts into Euro at the Central Bank. I am informed that Revenue's audit and investigation activity is largely driven by risk analysis assessment of the potential tax or duty loss arising from any given activity.

Procedures put in place by the Central Bank limit the amounts of currency that can be immediately converted by any individual. Amounts in excess of that limit are normally lodged to the individual's bank account. In addition, as noted earlier in my reply, the Central Bank has recently introduced more stringent identification criteria for individuals lodging IR£ for conversion to Euro. Revenue has robust inspection powers in relation to the investigation of an individual's bank account when it has reason to suspect that tax evasion is taking place. In this context I am satisfied that Revenue's risk analysis approach will adequately address any potential for tax evasion arising from these currency exchanges.

I am awaiting information from the Garda Síochána regarding investigations carried out by them. I will write to the Deputy when I have this information. The Anti-Money Laundering Compliance Unit of the Department of Justice and Equality has no function in this area.