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Departmental Operations

Dáil Éireann Debate, Thursday - 29 November 2018

Thursday, 29 November 2018

Questions (78)

Billy Kelleher

Question:

78. Deputy Billy Kelleher asked the Minister for Finance the progress to date for each of the action points made in the report Measures to Enhance Ireland's Corporate, Economic and Regulatory Framework published in November 2017 that fall under his remit; if each such action point has been completed, not completed or is ongoing, respectively; and the revised deadlines for action points not delivered by the original timeframes in tabular form. [50035/18]

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Written answers

My Department is the lead Department for ten key actions in the November 2017 report to enhance the State’s corporate, economic and regulatory framework. The majority of actions have already been implemented and the others are in progress for implementation.

Markets in Financial Instruments Directive (MiFID II):

The Markets in Financial Instruments Directive 2 (“MiFID 2”) represents a major piece of financial markets reform and is ambitious in its scope. It seeks to make financial markets more efficient, resilient and transparent. It was transposed by S.I. (375/2017) and entered into application on 3 January 2018, simultaneously revoking the MiFID 1 Regulations. However, it is necessary to provide for criminal sanctions and penalties in respect of infringements outlined in MiFID 2 in primary law, hence the need for the Markets in Financial Instruments Bill 2018, recently enacted in October this year. The Bill provides that a person guilty of an offence under certain provisions of the MiFID 2 regulations, such as operating without authorisation, is liable on conviction on indictment to a maximum penalty of €10 million and/or imprisonment for ten years. This is a continuation of the criminal sanctions regime that existed under MiFID 1. I believe putting in place criminal sanctions for serious infringement of the MiFID rules will provide a deterrent effect against any blatant misbehaviour and thus promote orderly markets, market integrity & investor protection. This Bill has passed all stages in the Oireachtas and was signed into law by the President on 29 October 2018.

Revenue Commissioners:

Ireland has implemented the Common Reporting Standard which provides for the automatic exchange of financial account information between tax authorities. The first information exchanges were completed in September 2017, with the tax authorities of 50 jurisdictions participating. In September 2018, 91 jurisdictions’ tax authorities completed exchanges. The information received by the Revenue Commissioners is being used to identify tax defaulters. The Revenue Commissioners, in conjunction with my Department, continue to monitor whether any additional powers or resources are currently required. Any such measures identified are then proposed to me as Minister for Finance for appropriate action.

Last year, the Revenue Commissioners collected a record €70.96 billion for the Exchequer (net figure €50.76 billion).

- During 2017, Revenue completed 655,557 compliance interventions, which yielded €491.9 million in tax, interest and penalties.

- 5,220 audits were carried out yielding €196.3 million and 66 investigations yielding €7.5 million in tax, interest and penalties.

- In addition, Revenue has received €88.2 million from 2,890 disclosures in the final offshore disclosure settlement opportunity. Tax defaulters who use offshore facilities to hide undeclared income or assets can now no longer make a qualifying disclosure and Revenue are using the information they receive from other jurisdictions to identify such tax defaulters. They now face penalties of up to 100% of the tax evaded, publication as tax defaulters and potentially, criminal prosecution.

Where tax evasion is uncovered, Revenue will apply the maximum sanctions and deterrents including penalties, publication, and criminal prosecution.

- In 2017, there were 24 criminal convictions for serious evasion and fraud convictions, and 911 summary criminal convictions with a total of €2.44 million imposed in fines.

Since May 2018, with the assistance of the Revenue Commissioners, the Director of Public Prosecutions secured 2 high-profile criminal convictions relating to revenue offences. A significant prison sentence was imposed in one of the cases.

Anti-Money Laundering:

The Financial Action Task Force (FATF) Report on Ireland’s Anti Money Laundering (AML) and Countering the Financing of Terrorism (CFT) was published on 7th September 2017, and found that overall, Ireland has a sound and substantially effective regime to tackle money laundering and terrorist financing. It also made a series of detailed recommendations in regard to all aspects of Ireland’s AML/CFT regime.

An action plan to address those recommendations has been drafted and agreed. The action plan transposes all of the recommendations arising from Ireland’s FATF review, and sets out to deliver improvements in the AML/CFT measures in place in Ireland between now and our 5th year FATF Follow-up Assessment. Article 30 of the 5th Anti-Money-Laundering Directive requires that Member States hold, in a central register, information on the beneficial ownership of corporate and other legal entities incorporated within their territories. My Department is currently transposing this provision by way of a Statutory Instrument. This work is well advanced and the transposition is expected to be concluded soon. Article 31 of the 5th Anti-Money-Laundering Directive requires that trustees of express trusts hold up-to-date information regarding the trusts’ beneficial ownership and requires that, for trusts governed under its law, each Member State hold this information in a central register. My Department is currently transposing this provision by way of a Statutory Instrument. This work is well advanced and the transposition is expected to be concluded soon.

Banking Inquiry Recommendations Progress Report:

My officials are working to finalise the Progress Report on the implementation of the recommendations of the Report of the Joint Committee of Inquiry into the Banking Crisis and expect to publish this shortly. The progress report will illustrate the wholesale change in the regulatory culture since the financial crisis, characterised by a more intrusive supervisory approach by the Central Bank.

Joint Agency Task Force:

Officials from my Department joined the Joint Agency Task Force on Invoice Redirection Fraud. Revenue has well-established mechanisms, under data protection and disclosure legislation, for providing information to other public bodies, in response to requests from them, for the purposes of investigations and prosecutions and preventing crime.

Review of Ireland's Anti-Fraud and Anti-Corruption Structures:

In relation to anti-corruption and anti-fraud structures, a review group under the aegis of my colleague, the Minister for Justice and Equality, chaired by Mr James Hamilton, has been set up (first meeting in September 2018). Officials from my Department, the Central Bank and the Revenue Commissioners are participating.

Action Point No.

Action Point

Timeline

Lead/Owner

Progress

12

Publish Progress Report on the implementation of the recommendations of the Report of the Joint Committee of Inquiry into the Banking Crisis

Q4 2017

Department of Finance

Near completion – Report redrafted (to be up to date) will be published Q1 2019.

13

Monitor the implementation of further recommendations from the Report of the Joint Committee of Inquiry into the Banking Crisis

Ongoing

Department of Finance

Ongoing.

18

Revenue, in conjunction with the Department of Finance, will continue to examine whether any additional powers or measures are currently required. Any such measures will then be proposed to the Minister for Finance for inclusion in Finance Bill 2018.

Ongoing

Department of Finance

Completed - funding allocated to Revenue in Budget 2018 will support them in undertaking a number of initiatives, including:

- Significant reform of the administration of the PAYE system; and,

- The enhancement of ICT systems capacity for data matching and data analytics.

19

Implement MiFID II, which broadens the powers of the Central Bank to remove (members of) the executive board from the management of [“failing”] MiFID companies

Q1 2018

Department of Finance

Completed.

20

Extend the Market Abuse Rules to a wider cross-section of individuals under MiFID II

Q1 2018

Department of Finance

Completed.

21

MiFID II Bill providing for criminal sanctions for serious infringements of MiFID II/MiFIR

Q1 2018

Department of Finance

Completed – enacted end October 2018.

22

Implement the automatic exchange of financial account information under the global Common Reporting Standard (CRS)

Q4 2017

Revenue Commissioners

Completed - the first information exchange began in September 2017.

23

Respond to the recommended actions of the FATF Report on Ireland’s Anti Money Laundering and Countering the Financing of Terrorism framework

Ongoing

Department of Finance

Ongoing - The Financial Action Task Force (FATF) Report on Ireland’s Anti Money Laundering (AML) and Countering the Financing of Terrorism (CFT) was published on 7th September 2017, and found that overall, Ireland has a sound and substantially effective regime to tackle money laundering and terrorist financing. It also made a series of detailed recommendations in regard to all aspects of Ireland’s AML/CFT regime. An action plan to address those recommendations has been drafted and agreed. The action plan transposes all of the recommendations arising from Ireland’s FATF review, and sets out to deliver improvements in the AML/CFT measures in place in Ireland between now and our 5th year FATF Follow-up Assessment.

25

Establish a central register for beneficial ownership of companies and industrial and provident societies

Q1 2018

Department of Finance

In progress – the Department of Finance is currently transposing this provision by way of a Statutory Instrument. This work is well advanced and the transposition is expected to be concluded soon.

26

Transpose Article 31 4AMLD regarding trusts and similar legal arrangements

Q1 2018

Department of Finance

In progress – the Department of Finance is currently transposing this provision by way of a Statutory Instrument. This work is well advanced and the transposition is expected to be concluded soon.

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