Departmental Expenditure

Questions (139)

Mattie McGrath

Question:

139. Deputy Mattie McGrath asked the Taoiseach the amount spent by his Department each year for the past three years on bottled water; and if he will make a statement on the matter. [24579/14]

View answer

Written answers (Question to Taoiseach)

My Department has not purchased any bottled water over the past three years. However, bottled water is served by catering companies at events in Government Buildings.

EU Membership

Questions (140)

Micheál Martin

Question:

140. Deputy Micheál Martin asked the Tánaiste and Minister for Foreign Affairs and Trade if he or his Department are making plans for the possibility of the UK voting to exit the EU; and if he will make a statement on the matter. [24346/14]

View answer

Written answers (Question to Foreign)

The outcome of the domestic British debate on the EU could have very significant implications for Ireland, and I have, of course, been closely following developments. No decision has yet been taken on the holding of a referendum. Indeed, the question of holding a referendum may only become clear after the next UK general election. My strong belief is that the UK is better off within the European Union, and that the Union benefits hugely from British membership. The UK is Ireland’s nearest neighbour and largest trading partner. The recent State Visit by President Higgins to the UK highlighted again the extraordinary breadth and depth of the excellent relations between our two countries. The contribution of our shared membership of the EU, where we have so frequently shared interests over the years, to the development of that relationship is not insignificant. For very many reasons, it is clearly in Ireland’s interest for the UK to remain in the European Union.

The Government will continue to monitor the situation closely.

Legislative Measures

Questions (141)

Seán Fleming

Question:

141. Deputy Sean Fleming asked the Tánaiste and Minister for Foreign Affairs and Trade the legislative provisions in respect of his Department that have been passed by the Oireachtas since 2011 but have not come into effect to date; and if he will make a statement on the matter. [24151/14]

View answer

Written answers (Question to Foreign)

Specific legislative provisions of Acts under my Department which have been passed by the Oireachtas since 2011 but have not yet been commenced are paragraph (iv) of Section 1 of the European Communities (Amendment) Act 2012. Paragraph (iv) of Section 1 of the European Communities (Amendment) Act 2012 will add to the definition of “treaties governing the European Union”, contained in Section 1 of the European Communities Act 1972, the Protocol on the concerns of the Irish people on the Treaty of Lisbon, annexed to the Treaty on European Union and to the Treaty on the Functioning of the European Union, done at Brussels on 16 May 2012. It will be commenced as soon as the Protocol has been ratified by all EU member states. At present, two member states have yet to finalise their ratification of the Protocol, the Czech Republic and Italy, although the necessary domestic procedures have been commenced. Our embassies in both countries are in regular contact with the relevant national authorities with a view to encouraging ratification as soon as possible and my Department is closely monitoring the matter.

Passport Services

Questions (142)

Thomas P. Broughan

Question:

142. Deputy Thomas P. Broughan asked the Tánaiste and Minister for Foreign Affairs and Trade if any additional temporary post in the passport office during the busy summer months has been filled. [24185/14]

View answer

Written answers (Question to Foreign)

Passport demand in Ireland is seasonal. Almost 50% of all passport applications are received in the four months April –July. To meet these seasonal pressures the Passport Service has recruited and trained 157 temporary clerical officers.

Ministerial Responsibilities

Questions (143)

Lucinda Creighton

Question:

143. Deputy Lucinda Creighton asked the Tánaiste and Minister for Foreign Affairs and Trade if he will list in tabular form all legislation and specific sections therein that refer to powers delegated to the Minister of State with special responsibility for trade and development; if he will detail the title of the civil servants who are responsible for reporting directly to said Minister of State; and if he will make a statement on the matter. [24620/14]

View answer

Written answers (Question to Foreign)

The Ministers and Secretaries (Amendment) (No. 2) Act, 1977 provides for the delegation of statutory Ministerial powers and duties to Ministers of State. This may be done at the request of the Minister concerned, by Government Order. The relatively modest statutory powers of the Minister for Foreign Affairs and Trade relate to consular, passport and other technical matters and it has never been the practise, or considered necessary, to delegate these. Delegation of non-statutory responsibilities is generally made by way of an informal understanding between a Minister and Minister of State.

The current staffing arrangements for the private and constituency office of the Minister of State for Trade and Development, Mr. Joe Costello T.D., are set out in a table:

Minister of State for Trade and Development, Mr. Joe Costello T.D.

Private Office

Constituency Office

1 Private Secretary (Third Secretary)

1 Personal Assistant

3 Clerical Officers

1 Personal Secretary

1 Clerical Officer

Middle East Issues

Questions (144)

Joe Higgins

Question:

144. Deputy Joe Higgins asked the Tánaiste and Minister for Foreign Affairs and Trade if he has raised the use of administrative detention by the Israeli state in the occupied Palestinian territories and the reported abuse of human rights such as torture, solitary confinement, denial of visits from family and legal representatives, allegations of deliberate medical negligence, transportation of detainees to Israel and the detainment of children; the Irish Government's position on the matter; and the progress of any representations made to the Israeli state on the matter. [24687/14]

View answer

Written answers (Question to Foreign)

Ireland has repeatedly drawn attention to concerns with regard to the treatment of Palestinian prisoners, both directly with the Israeli authorities, and in discussions at EU or UN level. The excessive use of administrative detention has been criticized by the EU on a number of occasions in recent years, and I have also spelt out my concerns about the practice, including here in the Oireachtas. There has been a significant reduction in the use of the practice by Israel during this period, but the problem remains a serious one. At the Universal Peer Review of Israel at the UN Human Rights Council in October 2013, conducted directly with the Israeli Government, Ireland focused in particular on issues relating to the detention of minors, and recommended, inter alia, that Israel end night arrests of children, the admissibility in evidence in military courts of written confessions in Hebrew signed by Palestinian children, the use of solitary confinement against minors, and the denial of access to family members or to legal representation.

These serious concerns were also among those raised by Ireland in its statement under agenda item 7 on ‘the human rights situation in Palestine’ at the 25th session of the Human Rights Council in March.

In addition Ireland raises its concerns bilaterally, both with the Israeli Embassy in Dublin and with the Israeli authorities in Israel, at every appropriate opportunity. Finally, Ireland provides financial support to Israeli and Palestinian NGOs who are active in bringing these issues to light. We have seen some improvements in issues relating to detention, but much more remains to be done.

As I have stated before, it is right that Israel should be held to appropriate standards in dealing with civilians under its military occupation. However, it is only right also to note that Israel is not alone in giving rise to such concerns. Similar or worse treatment of persons in detention could be reported from many other countries in the region and elsewhere.

Economic Policy

Questions (145)

Micheál Martin

Question:

145. Deputy Micheál Martin asked the Minister for Finance the position regarding the recent European Commission economic recommendations and the way they apply here; and if he will make a statement on the matter. [24345/14]

View answer

Written answers (Question to Finance)

On 2 June 2014, the EU Commission published its proposals for Country Specific Recommendations (CSRs) for the 26 Member States across the EU who are not in a programme of financial assistance, as part of the 2014 European Semester. Only Greece and Cyprus did not receive CSRs this year.

Having successfully exited the Programme of Financial Assistance, Ireland is now fully participating in the semester process for the first time. The engagement of Ireland in the annual process is part of the normalisation of our position as a post Programme country. The European Semester is a part of the new regime for economic surveillance, in operation since 2011 and codified by the 'six-pack' of legislative measures adopted in December 2011, to secure and maintain sound public finances across the EU, promote growth and employment and avoid macroeconomic spillovers between Member States.

The publication of the Annual Growth Survey (AGS) at the end of November 2013 commenced the fourth European Semester cycle. The Country Specific Recommendations now proposed by the Commission are based on its assessment of Member States' Stability Programme Updates and National Reform Plans submitted in April this year. They are designed to ensure that Member States work together to put in place and maintain the necessary conditions for stability, growth and jobs.

The Commission addressed a variety of CSRs to the 26 participating Member States in the fields of budgetary, fiscal and financial matters. The CSRs also cover areas where they propose deeper structural reforms. Ireland received a total of seven (7) CSRs.

The proposed CSRs for all 26 Member States are being processed through the relevant EU Committee formations and Ministers in all relevant Council formations will work in a coordinated and consistent manner towards final endorsement of the 2014 CSRs by Heads of State and Government at the June European Council before being finally adopted by the ECOFIN on 8 July.

National Pensions Reserve Fund Investments

Questions (146, 182)

Peadar Tóibín

Question:

146. Deputy Peadar Tóibín asked the Minister for Finance further to his announcement of 15 May 2014 if he will provide a full breakdown of each of the investments, including the moneys allocated, committed to from the National Pensions Reserve Fund in advance of the establishment of the Ireland Strategic Investment Fund. [24442/14]

View answer

Ciara Conway

Question:

182. Deputy Ciara Conway asked the Minister for Finance the projects supported by the strategic investment fund; the way applications to the fund can be made; and if he will make a statement on the matter. [24572/14]

View answer

Written answers (Question to Finance)

I propose to take Questions Nos. 146 and 182 together.

The National Treasury Management Agency (Amendment) Bill 2014, which is currently before the Oireachtas, includes provisions to establish the Ireland Strategic Investment Fund (ISIF) which will absorb the National Pensions Reserve Fund (NPRF) and have a statutory mandate to invest on a commercial basis to support economic activity and employment in Ireland. When the ISIF is established, NPRF money invested in its Discretionary Portfolio (valued at €6.9 billion as at 31 March 2014) will become available to invest in Ireland as suitable investment opportunities arise and are developed.

I am informed by the National Treasury Management Agency (NTMA), which is the Manager of the NPRF, that, in the context of reorienting the NPRF towards commercial investment in Ireland under the ISIF initiative, the NPRF Commission has already committed to a number of investments in Ireland including infrastructure, water, long-term financing for SMEs (both credit and equity) and venture capital.  A detailed table of the NPRF commitments to Irish investments at 31 March 2014 is set out in a table:

NPRF and third-party Irish Commitments 31/03/2014

NPRF Commitment Capital (€m)

3rd Party Capital (€m)

Total Project Size

(€m)

Multiple of NPRF Commitment

SME Equity Fund - Better Capital

50

50

100

2.0x

SME Equity Fund - Cardinal Carlyle

125

125

250

2.0x

SME Credit Fund - BlueBay

200

250

450

2.3x

China Ireland Technology Fund (Note 1)

72*

36

72

1.0x

Innovation Fund Ireland

125

125

250

2.0x

Local Venture Capital Funds

81

320

401

5.0x

Silicon Valley Bank (Note 1)

36*

72

72

2.0x

Irish Water

250

-

250

1.0x

Irish Infrastructure Fund

250

66

316

1.3x

Forestry

30

187

217

7.2x

Committed to Date

1,220

1,231

2,378

2.0x

 Note 1: €36 committed by the NPRF to the Global Funds as part of wider third-party relationship

In addition to the commitments in the above table, the National Pensions Reserve Fund has provided a stand-by credit facility for the N11 and Schools Bundles 3 Public-Private Partnership projects.

The NTMA intends to publish a report each year regarding investments made by the ISIF.  The first report, which will include an overview of the Fund's Irish investments, is scheduled for publication in the coming weeks.

Finding and developing investment opportunities will be a key function of the ISIF. The NPRF actively encourages people to approach it or its third-party investment managers with investment proposals. The presentations from its recent market engagement event at Dublin Castle and the related contact details are available on the NPRF's website www.nprf.ie.

The initial approach does not need to be a formal one.  In fact, much of the time the process commences with a telephone call and an idea and the NTMA will then work with the party seeking the finance to help shape and develop the proposal.  If the NTMA does not think the investment proposition meets its requirements it will make that clear as soon as possible so as not to waste time.

For each of the SME funds, investment selection is carried out independently by the respective manager.  However, the NPRF is happy to direct queries from businesses seeking finance to the relevant manager. Requests of this kind should be sent to smefunds@nprf.ie.

Venture capital funds seeking to access funding from the NPRF/ISIF are invited to contact the NPRF Unit directly at vcfunds@nprf.ie.

All other queries should be directed to info@nprf.ie or to any of the contacts detailed on www.nprf.ie.

National Pensions Reserve Fund Investments

Questions (147)

Peadar Tóibín

Question:

147. Deputy Peadar Tóibín asked the Minister for Finance further to his announcement of 15 May 2014 if he will provide full details of €350 million allocation from the National Pensions Reserve Fund to three new long-term funds intended to provide equity, credit and restructuring-recovery investment for Irish small and medium-sized enterprises; if these allocations are additional to any previous announcement; and the person who will promote and administer the funds. [24443/14]

View answer

Written answers (Question to Finance)

The allocation referred to by the Minister in his announcement of 15 May 2014 relates to investment commitments previously announced by the National Pensions Reserve Fund (NPRF) Commission in 2013.

In January 2013 the NPRF Commission announced investment commitments to three new long-term funds that will provide €850 million of equity, credit and restructuring/recovery investment for Irish SMEs and mid-sized corporates. The NPRF played a significant role in the development of the funds and was a cornerstone investor in each alongside additional investment from third-party investors. The NPRF has committed €375 million across the three funds:

- a €300m equity fund which is focussing on healthy businesses seeking to grow, including those with overleveraged balance sheets, managed by Carlyle Cardinal Ireland.

- a €100m turnaround fund focussing on underperforming businesses which are at or close to the point of insolvency but have the potential for financial and operational restructuring, managed by Better Capital.

- a €450m credit fund focussing on originating and acquiring loans to larger SMEs and mid-size companies, managed by BlueBay Asset Management.

- For each of the SME funds, investment selection is carried out independently by the respective manager. The NPRF is happy to direct queries from businesses seeking finance to the relevant manager. Requests of this kind should be sent to smefunds@nprf.ie .  Alternatively, contact detail for each of the SMEs is set out as follows:

- Nick Corcoran, Carlyle Cardinal Ireland

- Ph: 353 (0)1 631 9730

- David Cullen, Better Capital Ireland

- +353 (0)1 661 8430

- Pat Walsh, BlueBay Ireland Corporate Credit

- Ph: 353 (0)1 6694782

National Pensions Reserve Fund Investments

Questions (148)

Peadar Tóibín

Question:

148. Deputy Peadar Tóibín asked the Minister for Finance further to his announcement of 15 May 2014 if he will provide the monetary figure allocated from the National Pensions Reserve Fund to the collaboration with Silicon Valley Bank of new lending commitments; if he will provide details of the administration and allocation of the moneys. [24444/14]

View answer

Written answers (Question to Finance)

In June 2012, the National Pensions Reserve Fund (NPRF) announced a collaborative relationship with Silicon Valley Bank (SVB) aimed at supporting the technology innovation sector in Ireland. The NPRF has committed to invest in technology funds managed by SVB Capital, while Silicon Valley Bank has established a presence in Ireland and expects to lend US$100 million over five years to fast-growing Irish technology, life sciences and venture capital businesses. SVB has appointed an Ireland Relationship Director. Together with support from its team in London, SVB is currently looking closely at a number of opportunities and to date has made loans across nine companies.

Parties seeking to access funding from the NPRF/ISIF are invited to contact the NPRF Unit directly at vcfunds@nprf.ie.  Alternatively, contact detail for Silicon Valley Bank is set out:

Andrew Hunter, Silicon Valley Bank

Ph: 44(0) 207 367 7815

National Pensions Reserve Fund Investments

Questions (149)

Peadar Tóibín

Question:

149. Deputy Peadar Tóibín asked the Minister for Finance further to his announcement of 15 May 2014 if he will provide the monetary figure allocated from the National Pensions Reserve Fund to the fund established with China Investment Corporation; and if he will provide details of the administration and allocation of the moneys. [24445/14]

View answer

Written answers (Question to Finance)

In January 2014 the National Pensions Reserve Fund (NPRF) announced the establishment of the China Ireland Technology Growth Capital Fund, capitalised at $100 million with equal commitments from the NPRF and China Investment Corporation (CIC).  The Fund's strategy will be to make minority equity investments in fast-growing technology companies and will target companies operating in core technology sectors such as internet, software, semiconductors and clean technology and areas of technology for which the Fund's strategy is uniquely positioned, including but not limited to agriculture, food, medical and financial services.

Parties seeking to access funding from the NPRF/ISIF are invited to contact the NPRF Unit at vcfunds@nprf.ie.  Alternatively, contact detail for the fund is set out:

Elaine Coughlan, Atlantic Bridge

Ph: +353 (0)1 6034450 

National Pensions Reserve Fund Investments

Questions (150)

Peadar Tóibín

Question:

150. Deputy Peadar Tóibín asked the Minister for Finance if he will provide details of moneys invested into the Irish Infrastructure Fund from the National Pensions Reserve Fund to date; and if the fund has tendered for or procured any asset disposed of by the State. [24446/14]

View answer

Written answers (Question to Finance)

In late 2011, the National Pensions Reserve Fund (NPRF) Commission announced a commitment of €250 million to a new Irish Infrastructure Investment Fund (IIF) which is seeking up to €1 billion from institutional investors in Ireland and overseas and which will invest in infrastructure assets in Ireland, including assets designated for disposal by the Government and commercial State enterprises, and new infrastructure projects.

The fund, which was established by Irish Life Investment Managers, with AMP Capital appointed as the fund's discretionary investment manager, currently has in excess of €310 million of committed capital.

In September 2013, the IIF completed its second investment by acquiring 100% of Towercom, Ireland's largest independent wireless telecoms infrastructure company. Towercom owns more than 400 communications masts in key strategic locations across Ireland and counts all of the major telecoms operators in Ireland among its customers. This is the second investment completed by the IIF, following its acquisition of a controlling stake in a portfolio of wind farms from Viridian Group in 2012.

To date, the IIF has not tendered for or procured any asset disposed of by the State.

Tax Code

Questions (151)

Micheál Martin

Question:

151. Deputy Micheál Martin asked the Minister for Finance the way he will respond to the EU Commission report on the need for Ireland to do more to address aggressive tax planning; and if he will make a statement on the matter. [24802/14]

View answer

Written answers (Question to Finance)

I assume the Deputy is referring to the European Commission's "Recommendation for a Council Recommendation on Ireland's 2014 national reform programme and delivering a Council opinion on Ireland's 2014 stability programme" which was published on June 2nd. Although this Recommendation does not contain any reference on a need to do more to address aggressive tax planning, the issue was raised during a press conference.

The Deputy should be aware that Ireland has taken many steps in the past 18 months or so in the fight against aggressive tax planning, some of which I will highlight here:

- During Ireland's EU Presidency in 2013, we led the fight against aggressive tax planning to ensure a co-ordinated approach across the EU

- We are actively involved in the discussions at EU and OECD level

- We were one of the first countries to commit to being "early adopters" of the OECD's new Common Reporting Standard

- In Finance (No. 2) Act 2013, we ensured that no company could be "stateless" for tax purposes

- As part of Budget 2014 we published Ireland's International Tax Strategy which sets out our approach to international tax issues

- We have recently published a consultation paper on the OECD's BEPS project.

- All countries recognise the need for them to do more to address aggressive tax planning and they all recognise that an international approach is required. That is why we have the OECD BEPS project which is tasked with finding answers to these difficult questions.

Legislative Measures

Questions (152, 199)

Seán Fleming

Question:

152. Deputy Sean Fleming asked the Minister for Finance the legislative provisions in respect of his Department that have been passed by the Oireachtas since 2011 but have not come into effect to date; and if he will make a statement on the matter. [24150/14]

View answer

Michael McGrath

Question:

199. Deputy Michael McGrath asked the Minister for Finance if he will provide a detailed list of any legislative provision in his area that has been fully passed by the Oireachtas but has not yet been signed into law; and if he will make a statement on the matter. [24788/14]

View answer

Written answers (Question to Finance)

I propose to take Questions Nos. 152 and 199 together.

The following are the legislative provisions in respect of the Department of Finance which have been passed by the Oireachtas since 2011 but have yet to come into effect:

Finance Act 2011

- Section 49(1)

- Section 60(1)(c)

Finance Act 2012

- Section 20 (d) 

Credit Union and Co-operation with Overseas Regulators Act 2012:

- Section 8   

- Section 10

- Section 11

- Section 12

- Section 13

- Section 30

- Section 38

- Corresponding items in Schedule 1 of the Act will come into force when the sections above are commenced. 

Finance (Local Property Tax) Act 2012

- Sections 19, 20 and 21 are due to commence on 1 July 2014. Commencement orders have been signed.

 Finance Act 2013

- Section 21 (1)

- Section 30

- Section 31

- Section 50 (1)(c)

- Section 57 (2)  

Finance Act (No. 2) 2013

- Section 24

- Section 25 (1)

- Section 31  

- Section 45 (1)

- Section 51 (1)(c)

- Section 54 (2)

- Section 66 (1)

- Section 70

There are no Bills under the responsibility of the Department of Finance which have been passed by the Oireachtas since 2011 but have yet to be signed into law. Each Bill passed by the Oireachtas since 2011 has been subsequently signed by the President.

Mortgage Interest Relief Eligibility

Questions (153)

Michael McGrath

Question:

153. Deputy Michael McGrath asked the Minister for Finance further to Parliamentary Question No. 112 of 27 May 2014, if he will address the points made in correspondence (detail supplied); and if he will make a statement on the matter. [24160/14]

View answer

Written answers (Question to Finance)

I am informed by Revenue that the mortgage interest relief (MIR) 'guidance' referred to in the details supplied by the Deputy, predates the 2013 legislative changes made to Section 244 of the Taxes Consolidation Act 1997. As previously indicated, Section 9 of the 2013 Finance Act inserted  the conditions required to qualify for the relief beyond the 31 December 2012 deadline.

Specifically, Section 244 (7) was inserted to provide for MIR in respect of interest paid on a loan used to construct a home on a site, where the site was purchased by way of a loan during 2012. As confirmed to the Deputy in reply to his previous representation on the issue, the person did not purchase the site in question by way of a loan in 2012.

Also, Section 244 (8) was inserted to provide for MIR in respect of interest paid on a loan used to repair, develop or improve a home. It does not provide for such relief in respect of the construction of a home as is the situation in the case in question.

Departmental Communications

Questions (154)

Michael McGrath

Question:

154. Deputy Michael McGrath asked the Minister for Finance further to Parliamentary Question No. 104 of 27 May 2014, if he will provide full details of the occasions on which officials in his Department used non-departmental e-mail addresses, telephone numbers or other methods of communication for departmental business; and if he will make a statement on the matter. [24163/14]

View answer

Written answers (Question to Finance)

As referred to in Parliamentary Question No. 104 of 27 May 2014, the Department's Information and Communications Technology Usage Policy implicitly prohibits the use of non-departmental email addresses to circumvent the terms of the policy. The use of non departmental phones for departmental business is not prohibited.

The Department does use filtering software to monitor compliance with certain aspects of the policy, but this software does not provide the facility to differentiate messages, issued from departmental email addresses, related to department business from those of a personal or private nature. As the Web Browsing Filtering software does not extend to non-departmental equipment or infrastructure, it is not possible to monitor or log emails or other methods of communications used by staff on public or home based devices or networks.

Similarly, in relation to phone usage, the Department's monitoring practices do not differentiate communication related to department business from those of a personal or private nature.

Insurance Industry

Questions (155)

Noel Grealish

Question:

155. Deputy Noel Grealish asked the Minister for Finance further to Parliamentary Question No. 103 of 27 May 2014, regarding Setanta Insurance, the way he would envisage brokers having what he called a more active role in advising customers when brokers do not have access to the level of financial information to advise if a particular company is solvent; the way he would envisage brokers being able to provide a type of prudential service when regulators are in place for that purpose; if he will expand on his statement that caveat emptor should apply to the purchase of a financial services product when it is the regulatory framework which is supposed to protect consumers; and if he will make a statement on the matter. [24204/14]

View answer

Written answers (Question to Finance)

At the outset, I would like to say that both I, as Minister for Finance, and the Government are concerned over the situation that arose with regard to the Irish policyholders of Setanta Insurance Company Limited (Setanta).  My Department and the Central Bank will be reviewing the circumstances relating to Setanta and will be reporting to me on what lessons can be learnt and how the framework can be strengthened. The European Commission has indicated that it will also review whether any issues raised relating to the regulatory framework require action.

Setanta is a Maltese incorporated company which was both authorised and prudentially supervised by the Malta Financial Services Authority (MFSA). Setanta was regulated at EU regulatory level in accordance with a directive known as Solvency I which currently places requirements on the amount of regulatory capital European insurance companies must hold against unforeseen events. I understand that Setanta met its EU regulatory obligations and under EU law was, therefore, entitled to trade across EU borders.

Under EU legislation the Central Bank of Ireland is not responsible for the prudential supervision of Irish branches of credit institutions authorised in other EEA Member States and operating under a passporting arrangement in to Ireland.  The Central Bank does however have responsibility for the supervision of such entities in the following areas: in co-operation with the home state regulator, assessment of their compliance with liquidity requirements; secondly, consumer protection issues; and thirdly, compliance with Anti-Money Laundering regulations.

The current legal and regulatory framework for the provision of insurance in the EEA, and the supervision of that activity, is prescribed by European Union Law in the Life and Non-Life Insurance Directives. The provision of insurance throughout the EEA on a freedom of services basis and a freedom of establishment basis (i.e. a branch) within this framework is predicated upon the absence of internal market frontiers and the mutual recognition of the authorisation of insurance undertakings by Member States.

The Insurance Directives specify particular roles for both the home Member State supervisory authority (i.e. the supervisory authority that grants an authorisation) and the host Member State supervisory authority (i.e. the supervisory authority of a Member State where an insurance undertaking conducts business of a freedom of services or freedom of establishment basis) of an insurance undertaking. Insurance undertakings authorised under the Insurance Directives are subject to solvency and financial reserving requirements, the supervision of these requirements is the sole responsibility of the home Member State supervisory authority. The primary objective of these requirements is to ensure that claims made in respect of policies issued will be adequately provided for by an insurance undertaking.

Under EU law which governs non-life insurance, an insurer is required to inform the regulator in its home Member State (its home regulator) that it intends to pursue business in another Member State. The home regulator must then provide the host regulator with a certificate attesting that the insurer covers the EU Solvency Capital Requirement, as well as the nature of the business which the insurer intends to undertake. The insurer may start to pursue business from the date that the certificate is communicated to the host regulator, in this case the Central Bank of Ireland.

Under Article 20 of the Third Non-Life Directive the Home Regulator is also required to notify the Host Regulator if the solvency margin of an undertaking falls below the statutory requirement. In such instances the Home Regulator should inform the Host Regulator of the measures it has taken to address the solvency deficit.

Following negotiations that were completed at European level in November, 2013, a new regime known as Solvency II will commence on 1 January 2016, which will further strengthen the EU regulatory framework. The Solvency II EU Directive sets out new, stronger EU-wide requirements on capital adequacy and risk management for insurers with the key aim of increasing policyholder protection.  The new regime will also ensure greater cooperation between supervisors.

In relation to my comments on Parliamentary Question No 103 of 27 May, I made these comments in the context of a standard consumer transaction with a supplier.  The directives I mentioned set out the prudential protections already in existence and also those currently being introduced at EU level. These measures will offer both brokers and consumers additional protections. I am aware that as intermediaries it is not expected that brokers would investigate the solvency or other financial data on an insurer it was dealing with.

The point I was making was that as professional advisors, brokers can provide additional guidance and reassurance that consumers with very limited knowledge of the industry can avail of.  I think it is reasonable that brokers should explain the differences between the price and terms and conditions of each insurance policy they are proposing. I am sure most if not all are doing that.  It is not unreasonable therefore to expect that they would also give guidance on the relative financial strength of insurance companies based on public available information.  For example, the insurance companies may have received public rating agency confirmation of their financial strength and brokers may be able to advise clients of the differences between the ratings of different insurance providers being proposed and remind clients that price is not the only criterion in the purchase of insurance products.

Drugs Crime

Questions (156)

Brendan Griffin

Question:

156. Deputy Brendan Griffin asked the Minister for Finance if he expects the inclusion of the value of illegal drug activity and prostitution in the measure of GDP to impact significantly on the figures; if he is confident that the Central Statistics Office can ascertain an accurate reading in respect of these activities; the way the CSO is researching the levels of activity in drug dealing and prostitution; if he is concerned that the inclusion of these activities in the calculation of GDP somewhat destigmatises them and that some persons involved could see this as the State morally legitimising their actions; his plans to account for other black market activity in GDP calculation; if he was surprised by the scale of the impact of the inclusion of these activities on the UK's GDP figures; and if he will make a statement on the matter. [24213/14]

View answer

Written answers (Question to Finance)

Section 13 of the 1993 Statistics Act provides that the Director General of the Central Statistics Office (CSO) has sole responsibility for, and is independent in, the exercise of the functions of deciding the statistical methodology and professional statistical standards used by the Office, as well as the content of statistical releases and publications issued by the Office.

Regarding the challenge of accurately measuring illicit activities, I am informed by the CSO that this is difficult. Statisticians use any available data  that can produce a repeatable estimate for these activities over time. The illegal nature of these activities makes it particularly difficult to estimate their level and value. Consequently, the estimation methods used can only be expected to deliver approximations of the actual levels and value of activity. Data are obtained from a range of sources, including the Gardaí and organisations involved in the welfare of prostitutes or drug addicts. International research in these matters is also reviewed by the CSO.

The CSO also inform me that there have been no changes to the methodology relating to the measurement of illicit activities recently, either relating to the new ESA 2010 methodology or otherwise.

Finally, the methodology for compilation and production of UK national accounts is the responsibility of the Office for National Statistics, the national statistical institute for the UK.