Written Answers Nos. 163-78
163. Deputy Pearse Doherty asked the Minister for Finance if Anglo Irish Bank was trading solvently post September 2008 as a result of the banking guarantee; if the guarantee ensured the bank would not fail, or just insured that in the event of failure liabilities would be met; and if loan recipients following the banking guarantee can claim that their loans were issued fraudulently post 2008 because the bank was not solvent. [33116/13]
View answerIt is important to note that at no time was Anglo Irish Bank declared insolvent and the provision of capital and support by the Government has prevented insolvency. IBRC, the merged entity, comprising both Irish Nationwide Building Society and Anglo Irish Bank, remained solvent and in compliance with capital requirements up until liquidation on the 7th February 2013. Anglo Irish Bank was regarded as a systemically important credit institution and was managed and dealt with on that basis by all the Irish regulatory authorities. Failure of such an important institution would have had serious and immediate financial and economic implications. Having consulted with the Central Bank capital was provided to the bank to ensure that they continued to meet all regulatory capital requirements.
In the case of Anglo the Department knew, prior to nationalisation, that capital would be required, that funding at the bank was problematic and that certain risks, including governance issues, could, if not mitigated, materially impact on the bank. However, the bank was not adjudged insolvent at that time. The audited accounts for the period, and assessments by the Financial Regulator, PricewaterhouseCoopers (PwC) and Merrill Lynch all indicated that the bank was solvent. Anglo was nationalised because of governance issues, and funding problems in particular which would very quickly have placed the bank in a position of inability to repay maturing debt including deposits, with a major and immediate knock-on impact on other banks and on the State. Further, there was strong negative market sentiment towards the bank which was impacting on the banking sector generally.
With the benefit of hindsight, however, it is now clear that the full extent of the evolving problems in global financial crisis or the property market were not envisaged in any assessment of the bank at that time. In the course of 2009/2010 the extent of the problems became clear and the level of impairments on assets increased substantially necessitating further injections of capital to sustain the capital position of the bank.
164. Deputy Pearse Doherty asked the Minister for Finance his views on whether the members of the board of Anglo Irish Bank, who held position up to and post September 2008 failed in their responsibility to alert shareholders as to the financial difficulties that the bank was in. [33117/13]
View answer165. Deputy Pearse Doherty asked the Minister for Finance if he has asked the former members of the board of Anglo Irish Bank, who were on the board in the run up to and after September 2008, to provide a comprehensive report on the affairs of the bank and an explanation of their actions and assessment of what happened. [33118/13]
View answerI propose to take Questions Nos. 164 and 165 together.
The Office of the Director of Corporate Enforcement is responsible for the enforcement of breaches of company law and it is the function of the director of the ODCE to investigate if the former members of the Board of Anglo Irish Bank complied with their regulatory responsibilities and duties. As there are currently a number of court cases in relation to the responsibility of the Bank in relation to the share price, it would not be appropriate for me to comment on this matter as it could prejudice the on-going court cases.
It is the responsibility of the investigating body to request the former members of the Board of Anglo to explain their actions and provide a report on the affairs of the bank. I do not give instructions to the ODCE as it is not my role and it would not be appropriate for me to do so. There are a number of inquiries and investigations on-going into matters at Anglo Irish Bank. I am advised that these proceedings are suitably resourced but take a long time to progress due to the complexity of the cases.
The DPP has now issued proceedings against three former executives in Anglo Irish Bank in relation to various offences under the Companies Acts. It is hoped that these cases will be progressed through the Courts in the first half of next year. Due to the sensitive nature of those issues, it would be inappropriate for me or the bank to comment further at this time.
166. Deputy Pearse Doherty asked the Minister for Finance if he is satisfied that Anglo Irish Bank kept proper books and records as required by section 202 of the Companies Act; and if he will make a statement on the matter. [33119/13]
View answerI have been advised by the Special Liquidators that they are currently reviewing the books and records of Anglo Irish Bank/ IBRC. The Special Liquidators will be meeting their obligations under Section 56(1) of the Company Law Enforcement Act 2001 and as such will be considering the adequacy of the books and records of IBRC as part of this report.
169. Deputy Pearse Doherty asked the Minister for Finance if phone calls between the Central Bank of Ireland and traders market-related phone calls are recorded; if the recordings are kept; and if he has requested that these tapes also be preserved for any banking inquiry. [33295/13]
View answerThe Central Bank has advised me that it is not their practice to record telephone calls with regulated entities, but that phone calls on landlines in investment firm trading rooms are generally recorded, although there are no specific regulations that require this. The question of the recording of phone calls by investment firms is being reviewed as part of EU negotiations on the Markets in Financial Instruments Directive (MiFID) and the Market Abuse Regulation (MAR). MiFID is currently the subject of negotiations between the Council and the European Parliament, while MAR cannot be finalised until MiFID negotiations are complete. When MiFID is finalised it is expected that Member States will be given 24 months in which to implement the Directive.
The Council position on telephone recordings in MiFID is that telephone recordings between investment firms and clients should be mandatory, subject to the client being notified of this in advance. The agreed position between the Council and European Parliament in MAR is that competent authorities will, subject to certain conditions, be able to access such telephone recordings.
170. Deputy Pearse Doherty asked the Minister for Finance the standard that now applies to recruiting and hiring staff at the Central Bank of Ireland and other State-run banks; if senior staff must come with a level of experience in a similar field; and if he is satisfied that all staff currently appointed in the Central Bank of Ireland went through rigorous interview and probationary processes. [33296/13]
View answerI am informed by the Central Bank that the Central Bank Commission approves the staffing plan for the Central Bank on an annual basis and this defines the resourcing needs across the organisation. The Central Bank adopts a thorough recruitment process for all positions. The selection process involves an initial shortlisting by human resources, further shortlisting by the hiring manager against an agreed criteria and role profile, aptitude tests (for more junior roles), interviews (with a selection panel), assessment centre (for senior roles) and second interview. All staff members have to complete a probationary period of 6 months. Recruitment policy at the covered banks is an operational matter for those banks.
171. Deputy Pearse Doherty asked the Minister for Finance if the Financial Regulator is aware of loans being forwarded to customers in any of the State-owned banks, without going through due process; and the steps banks are supposed to follow, post the 2008 crash, in the issuing of loans. [33297/13]
View answerI have been informed by the Central Bank that all requests for new lending go through a formal process which inter alia includes steps such as application, assessment, approval, decline or defer pending further information, issue and signing of a binding contract and draw down of funds. Over the last three years the Central Bank has taken various steps to ensure higher lending standards by implementing various initiatives to improve governance, systems, controls, processes, and training. Examples of these various initiatives include but are not limited to the corporate governance code for credit institutions and insurance undertakings 2010, minimum competency requirements, Central Bank Provisioning and Disclosure Guidelines 2011 & 2012, Central Bank Valuation Guidelines 2012 and the fitness and probity regime 2011. In addition the Consumer Protection Code 2012 contains requirements in relation to information and suitability in relation to the sale of loans.
172. Deputy Tom Fleming asked the Minister for Finance the progress made to date in addressing the growing problem of cigarette smuggling here; the number of seizures made and the quantity of cigarettes seized in each case during the past four years; and if he will make a statement on the matter. [33380/13]
View answerI am informed by the Revenue Commissioners, who are responsible for the collection of tobacco products tax and for tackling the smuggling and sale of illicit tobacco products, that they attach a high priority to dealing with this criminal activity. Their "Strategy on Combating the Illicit Tobacco Trade (2011-2013)", which is published on the Revenue website (www.revenue.ie), includes a range of measures designed to complement each other in targeting the supply and demand sides of the market for illicit tobacco products. This multi-faceted strategy includes ongoing analysis of the nature and extent of the problem, developing and sharing intelligence on a national, EU and international basis, ongoing review of operational policies, development of analytics and detection technologies, and optimum deployment of resources at both point of importation and inland to intercept and seize illegal products and to prosecute those involved. Interception of illicit tobacco products is achieved through a combination of risk analysis, profiling and intelligence and the screening of cargo, vehicles, baggage and postal packages. Revenue officers also target the illicit trade at the post-importation level by carrying out intelligence-based operations and random checks at retail outlets, markets and private and commercial premises.
In carrying out this important work Revenue works in close cooperation with other relevant agencies, both nationally and internationally. There is extensive cooperation between Revenue and An Garda Síochána, and the agencies concerned in the State and in Northern Ireland work closely together, through a cross-border group on tobacco enforcement, to target the organised crime groups that are responsible for a large proportion of the illegal tobacco market. In addition, cooperation takes place with other Revenue administrations and with the European Anti-Fraud Office, OLAF, in the ongoing efforts to tackle the illicit trade at international level. The following table sets out the seizure details requested by the Deputy.
|
Details |
2009 |
2010 |
2011 |
2012 |
2013* |
|
Cigarettes |
- |
- |
- |
- |
- |
|
Seizures |
10,610 |
9,017 |
10,580 |
8,108 |
3,015* |
|
Quantity |
218.5m |
178.4m |
109.1m |
95.6m |
11.3m* |
|
Tobacco |
- |
- |
- |
- |
- |
|
Seizures |
1,171 |
1,169 |
1,501 |
1,395 |
609* |
|
Quantity |
10,451kg |
3,367kg |
11,159kg |
5,276 kg |
2,913kg* |
* to 30th June
There has also been considerable success in detecting and prosecuting those involved in the illicit trade, with 132 convictions during 2012 and 51 convictions to date in 2013 for the smuggling or sale of illicit tobacco products.
173. Deputy Tom Fleming asked the Minister for Finance the progress made in assisting households whose mortgages are in negative equity; the number of households that have been assisted for each of the past four years and to date in 2013; the additional plans he has in place to assist the increasing number of families whose mortgages are in negative equity; and if he will make a statement on the matter. [33381/13]
View answerThe Central Bank has engaged with mortgage lenders in relation to negative equity mortgages to develop a mortgage product that would allow home owners to sell their existing home and transfer the negative equity portion of the original loan to the new loan. In order to ensure that proposals in relation to such mortgages are consistent with the Central Bank’s consumer protection and prudential policy objectives, the proposed criteria for any such facility need to be agreed in advance between mortgage lenders and the Central Bank. While the provision of negative equity mortgages will facilitate people moving homes and generate transactions in the housing market, the Central Bank has informed me that it is not expected that there will be a large take up of this product, as all sales must be sustainable and comply with the affordability and suitability provisions set out in the Consumer Protection Code. It is worth noting that a decision to introduce a negative equity type product is a matter for each mortgage lender and is based on commercial and policy considerations.
The Deputy will be aware that the Central Bank in its quarterly publication on Mortgage Arrears and Repossession statistics, publishes data on the number of mortgages restructured by quarter but it does not publish data in the format requested by the Deputy. The latest Central Bank data can be accessed at http://www.centralbank.ie/polstats/stats/mortgagearrears/Pages/releases.aspx. With regard to assisting borrowers in arrears the Central Bank published the revised Code of Conduct on Mortgage Arrears (“CCMA”) recently, setting out requirements for mortgage lenders dealing with borrowers facing or in mortgage arrears on their principal primary residence (whether in positive or negative equity). The CCMA provides a strong consumer protection framework to ensure that borrowers struggling to keep up mortgage repayments are treated in a fair and transparent manner by their lender, and that long term resolution is sought by lenders with each of their borrowers. The revised CCMA came into effect from 1 July 2013 and can be accessed on the Central Bank’s website at www.centralbank.ie.
174. Deputy Sean Fleming asked the Minister for Finance if persons who provided a single direct authority payment instruction for the local property tax for 2013 automatically have the payment deducted from their nominated account on 21 March 2014 or will they be required to sign a new single debit authority as persons were informed that this is like an electronic cheque and therefore by definition a single payment and they were told it would be deducted not earlier than 21 July 2013; there is no reference that a different amount will automatically be deducted from their account in March 2014 without them having to sign a new payment authority, as would be the case like a new cheque which they were given to understand was the equivalent; and if he will make a statement on the matter. [33408/13]
View answerI am advised by Revenue that the Deputy is correct in comparing the ‘single debit authority’ (SDA) payment option to an electronic cheque and correct in stating that it is, by definition, an authority for a single debit to be made from the relevant account in favour of Revenue. Revenue has confirmed that where a taxpayer opted to pay Local Property Tax (LPT) in respect of 2013 by means of SDA, the instruction is limited to that particular payment and does not automatically carry over into 2014. Where a person wishes to avail of the SDA option to pay LPT in respect of 2014 he or she will be required to complete a new mandate. Revenue will remind all taxpayers of such requirements in due course.
175. Deputy Brendan Griffin asked the Minister for Finance the amount of winnings from gambling or lotteries paid out in the State per annum; the amount of this that arises from payouts of €500,000 or over; if he will provide any further details of the figures involved; and if he will make a statement on the matter. [33415/13]
View answerI am advised by the Revenue Commissioners that statistics on winnings from gambling are not held by them. I would advise the Deputy that only betting comes within my remit in the context of betting duty. Overall gambling and gaming is within the remit of the Minister for Justice and Equality.
176. Deputy Brendan Griffin asked the Minister for Finance if he continues to monitor the workings and effectiveness of the Hungarian SMS/MMS levy; if he will relay his findings; and if he will make a statement on the matter. [33417/13]
View answerOfficials of my Department continue to monitor developments regarding the imposition of an SMS/MMS/mobile call levy in Hungary. I am advised that, since 1 July 2012, publicly available telephone services in Hungary are subject to a tax which is levied on telecommunications service providers and which applies on the initiation of phone calls and the sending of SMS and MMS messages. The tax is levied at the rate of 2 Hungarian Forint (HUF) per minute for initiated phone calls and HUF 2 per message (SMS/MMS) sent, which converts to approximately EUR0.0068, or c. two-thirds of 1 cent. Calls and messages to emergency services and those making charitable donations are exempt from the levy, as well as the first 10 minutes of calling in each month. The amount of tax payable is capped at HUF 700 (EUR €2.37) per month per phone number for private individuals and HUF 2,500 (EUR€8.47) for non-private individuals.
The levy is set to increase in Hungary from August 1. It is proposed that the telecom tax paid by businesses only will rise by HUF1 per minute or per text message, and the upper limit payable will rise from HUF2,500 to HUF5,000 (EUR €17 approximately). As previously advised, I understand the levy is the subject of European Commission challenge, claiming an infringement of Directive 2002/20/EC on the authorisation of electronic communications networks and services (Authorisation Directive). The action is currently at notification stage and has been responded to by the Hungarian authorities. No information has been made available as yet to my officials regarding behavioural impact of the tax.
As previously advised, the wider social and economic considerations which may militate against the introduction of a further tax on text messages would have to be taken into account, including the fact that that mobile phone calls and text messages are already subject to VAT at 23%, that a levy on such calls and messages could significantly increase the overall rate of taxation on mobile phone accounts, which would have implications for all sectors of society, and, finally, the fact the Exchequer has already received substantial benefit from the industry, particularly in the context of the recent spectrum auction.
In this regard, I am advised by ComReg that the winning bidders of its Multi-band Spectrum Auction for the 800, 900 and 1800 MHz bands will pay €854.64 million for these spectrum rights, comprising firstly of Upfront Fees amounting to €481.7 million (adjusted as necessary by transitional arrangements) and secondly, Annual Spectrum Usage Fees in the amount of €372.95 million which will be adjusted for inflation and paid in instalments until July 2030. Details of Upfront Fees and Spectrum Usage Fees for the duration of licences can be found in Section 2.2.5 of ComReg’s Information Memorandum 12/52, which is available on the ComReg website, www.comreg.ie.
177. Deputy Sean Fleming asked the Minister for Finance if he will review the recently introduced anti-money laundering requirements for prize bond purchases over €25; if he will consider raising this to purchases of €100 as the lower figure may be unnecessarily restrictive and have a detrimental impact on the sale of prize bonds, especially for persons who wish to give them as a gift to family members and friends; and if he will make a statement on the matter. [33424/13]
View answerEuropean legislation has been adopted to protect the financial system and certain professions and activities from being misused for money laundering and financing of terrorism purposes. The anti-money-laundering obligations applicable in Ireland derive from the Third EU Money-Laundering Directive. The Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 was enacted in July 2010 to transpose the Third Money Laundering Directive (2005/60/EC) and its Implementing Directive (2006/70/EC) into Irish Law. Part 4 of the Criminal Justice Act 2010 sets out the obligations of “designated persons” in relation to customer identification. One such obligation set out in the Act is the obligation to conduct customer due diligence, prior to the establishment of a business relationship. Customer due diligence refers to the identification of customers and that of any beneficial owners of financial products associated with the customer.
An Post and the Prize Bond Company are deemed to be a “designated person” under the Criminal Justice Act 2010 as they fall within the definition of a “financial institution”. In light of this, An Post and the Prize Bond Company are required to comply with the relevant provisions of the Act in relation to the sale of Prize Bonds to customers. This means, in practical terms, that customer due diligence must be conducted on all purchases of prize bonds, irrespective of value. The extent to which any particular person or product may be exempted from the customer due diligence requirements of the Act is determined by reference to the Act having regard to the underlying Directives. The Central Bank of Ireland has no discretion to exempt certain firms from the requirement to comply with the Act.
In light of the above, I am exploring with the National Treasury Management Agency (NTMA) and my colleague the Minister for Justice whether or not exemptions available under the Directives may be applied to small value purchases of prize bonds facilitated on behalf of the State by An Post and the Prize Bond Company.
