Wednesday, 12 Dec 2018

Written Answers Nos. 60-84

Taoiseach's Meetings and Engagements

Questions (60)

Brendan Howlin

Question:

60. Deputy Brendan Howlin asked the Taoiseach if he will report on his planned visits abroad in the next six months. [52102/18]

Written answers

The Taoiseach

I intend to attend scheduled meetings, formal and informal, of the European Council in the coming six months, which currently include, 13 and 14 December, 21 and 22 March and on 20 and 21 June 2019, along with the scheduled informal taking place in Sibiu, Romania on the 9 May. EU regional engagements may also arise and I will give full consideration to attendance at these in due course.

I attended the Annual Meeting of the World Economic Forum in Davos, Switzerland earlier this year. I am pleased to have been invited again this year and will attend in January.

I would also envisage travelling to the US in March around the St. Patrick's day period.

I also hope to be a position to visit Africa in the New Year.

Other EU and international visits are also being given consideration, and I will update the House as appropriate.

Ongoing political engagement with our EU and international partners remains crucial, in relation to Brexit and other important EU and international issues.

Parliamentary Questions Data

Questions (61)

Catherine Murphy

Question:

61. Deputy Catherine Murphy asked the Taoiseach the number of parliamentary questions his Department has processed in the past three years to date; the number of questions answered directly; the number of questions referred to bodies or agencies under the aegis of his Department for direct reply; the number of staff who are assigned to his parliamentary questions section; and if non-departmental staff, advisers and-or public affairs and relations companies have composed parliamentary question replies or had an act or hand in forming parliamentary question replies in the timeframe specified. [52248/18]

Written answers

The Taoiseach

My Department answered 1,656 oral and 1,442 written Parliamentary Questions from December 2015 to November 2018. All questions were answered directly.

One member of staff has the role of Parliamentary Question coordinator amongst other duties, and staff from across my Department are involved in processing replies to Parliamentary Questions in addition to their routine duties.

Answers to Parliamentary Questions are composed by Departmental staff only, this includes political advisors.

Parliamentary Questions Data

Questions (62)

Catherine Murphy

Question:

62. Deputy Catherine Murphy asked the Taoiseach and Minister for Defence the number of parliamentary questions his Department has processed in the past three years to date; the number of questions answered directly; the number of questions referred to bodies or agencies under the aegis of his Department for direct reply; the number of staff who are assigned to his parliamentary questions section; and if non-departmental staff, advisers and-or public affairs and relations companies have composed parliamentary question replies or had an act or hand in forming parliamentary question replies in the timeframe specified. [52238/18]

Written answers

Minister of State at the Department of Defence

The number of Parliamentary Questions answered directly by my Department in the years 2016, 2017, and from 1 January 2018 to 22 November 2018, is set out in the following table.

Year	Number of Parliamentary Questions
2016	658
2017	1,134
1 January - 22 November 2018	969

My Department did not refer any Parliamentary Question to an external body or agency for direct reply.

My Department does not have a specific section to deal with Parliamentary Questions, rather replies are prepared in the first instance by departmental staff dealing with the matter which is the subject of each individual question. From time to time, one or both of my advisers may input into a reply to specific questions.  However, questions are not referred to external bodies such as public relations companies.

Defence Forces Training

Questions (63)

Seán Sherlock

Question:

63. Deputy Sean Sherlock asked the Taoiseach and Minister for Defence if there are enough instructors to train drivers of military vehicles in the Defence Forces; and if there are sufficient driving courses for all brigades. [52288/18]

Written answers

Minister of State at the Department of Defence

As military driving is a technical skill across a wide variety of vehicles, with complex and differing operational profiles, the training needs are dynamic and are therefore constantly monitored by the responsible branches of the Defence Forces.

The Military Authorities have informed me that there are sufficient driving instructors and driving courses to meet current needs.

Parliamentary Questions Data

Questions (64)

Catherine Murphy

Question:

64. Deputy Catherine Murphy asked the Tánaiste and Minister for Foreign Affairs and Trade the number of parliamentary questions his Department has processed in the past three years to date; the number of questions answered directly; the number of questions referred to bodies or agencies under the aegis of his Department for direct reply; the number of staff who are assigned to his parliamentary questions section; and if non-departmental staff, advisers and-or public affairs and relations companies have composed parliamentary question replies or had an act or hand in forming parliamentary question replies in the timeframe specified. [52242/18]

Written answers

Tánaiste and Minister for Foreign Affairs and Trade

My Department does not have a specific section to deal with Parliamentary Questions. Replies are prepared in the first instance by Departmental staff in the business unit dealing with the matter which is the subject of each individual question. From time to time, one of my advisers may input into a reply to specific questions. Questions are not referred to external bodies such as public relations companies. There are no state bodies or agencies under the aegis of my Department. The number of Parliamentary Questions answered by my Department over the last three years is set out in the following table:

Number of PQs Answered	2016	2017	2018*
Written	734	1,367	1,446
Oral	57	117	79
Total	791	1,484	1,525

* To end November 2018

Foreign Conflicts

Questions (65)

Paul Murphy

Question:

65. Deputy Paul Murphy asked the Tánaiste and Minister for Foreign Affairs and Trade if he has received representations from the Irish ambassador in Madrid regarding the recent decision by a number of Catalan pro-independence prisoners on pre-trial detention to go on hunger strike in protest against their trial being frustrated and their access to the ECHR being blocked by Spain; if he will raise or facilitate the matter in the ECHR; his plans to raise the matter with the Spanish Government; and if he will make a statement on the matter. [52258/18]

Written answers

Tánaiste and Minister for Foreign Affairs and Trade

Four Catalan prisoners currently held in prison on pre-trial detention are on hunger strike. As they are awaiting trial and their cases are due to be heard by the Spanish Courts, it would not be appropriate for me to comment further. I am kept informed of developments in Catalonia by our Embassy in Madrid on a regular basis.

Foreign Conflicts

Questions (66)

Seán Haughey

Question:

66. Deputy Seán Haughey asked the Tánaiste and Minister for Foreign Affairs and Trade his views on the protracted crisis in South Sudan; if he will engage in diplomatic efforts through the EU to ensure the fragile peace in South Sudan holds; if he will continue to support humanitarian efforts in South Sudan that are addressing the root causes of the conflict; if he will continue funding and support for the conflict resolution and peace building efforts at community level by an organisation (details supplied) in partnership with INGOs; and if he will make a statement on the matter. [52303/18]

Written answers

Minister of State at the Department of Foreign Affairs and Trade

South Sudan continues to endure a terrible humanitarian crisis, primarily the consequence of conflict. I am deeply concerned by the continued high level of violence, and by reports of violations of human rights and international humanitarian law, which perpetuate the crisis and impact negatively on its scale. The current conflict began in 2013 and has had devastating consequences for civilians. The war, compounded by drought, has led to severe food insecurity and caused massive population displacement and suffering throughout the country, with women and girls suffering the most. It is estimated that almost 400,000 people have died, and 7 million people are currently in need of humanitarian assistance.

On 12 September last, the President of South Sudan, Salva Kiir, signed a peace agreement with the opposition. While this peace agreement has the potential to mark a new departure, it is critical that South Sudan’s leaders implement it without delay. Achieving lasting peace will require sustained effort and commitment as well as a genuinely inclusive approach to building the future South Sudan.

Ireland strongly supports efforts to build peace in South Sudan. In November 2017, during his visit to Addis Ababa, the Tánaiste met representatives of IGAD (Intergovernmental Authority on Development) and the African Union to discuss the situation in South Sudan. On that visit, the Tánaiste announced funding to the IGAD High Level Revitalization Forum, the process which delivered the revised peace agreement. Ireland will continue to support IGAD’s work on monitoring and evaluating the implementation of the agreement in 2019.

Our Embassy in Addis Ababa, which is accredited to South Sudan, monitors the situation and engages with local, regional and international parties on an ongoing basis. The Irish Ambassador in Addis Ababa visits Juba frequently where she meets with key government, UN, NGO, Red Cross and diplomatic partners, including the EU Delegation. Her most recent visit took place in November.

We are committed to supporting efforts towards peace in South Sudan and have contributed to projects aimed at peacebuilding. In 2018, this has included supporting partners’ meditation efforts and empowering civil society, in particular women’s groups, to facilitate their engagement in peace processes. As well as our direct bilateral support, we are actively involved in the efforts of the EU to support peace in South Sudan. Two officials from the Department of Foreign Affairs and Trade have been seconded to the EU Delegation in South Sudan, including one as head of Mission. The EU Delegation is strongly supportive of the peace process, in particular by providing support to the implementing and monitoring bodies of the peace agreement. The Tánaiste discussed these efforts with the EU Special Representative for the Horn of Africa, Alexander Rondos, when he visited Dublin on 7 November.

While a sustained resolution to the conflict is the ultimate goal, we have a duty now to deal with immediate humanitarian needs. Since 2012, Ireland has provided €61 million in direct humanitarian assistance to South Sudan. Over €10 million in Irish funding has been provided so far this year, including to Irish NGOs to assist them in reaching the most vulnerable. Christian Aid, Concern Worldwide, Oxfam, Trócaire and World Vision, with support from Irish Aid, are working in partnership with local organisations and NGO networks to provide lifesaving supplies to meet the basic needs of those suffering from the conflict.

As well as this direct bilateral aid, Ireland has also contributed significantly to humanitarian support in South Sudan through the multilateral system. Ireland is a significant contributor to the UN’s Central Emergency Response Fund, which has allocated $187 million to alleviate the crisis in South Sudan since 2011, as well as to the EU, which has provided more than €90 million so far this year.

With humanitarian needs likely to remain acute in 2019, Irish funding will continue to support both those in need inside South Sudan as well as South Sudanese refugees in neighbouring countries.

Brexit Issues

Questions (67)

Micheál Martin

Question:

67. Deputy Micheál Martin asked the Tánaiste and Minister for Foreign Affairs and Trade if he will report on recent comments by the Advocate General to the European Court of Justice on Article 50; and his views on whether the UK could revoke its withdrawal without approval by member states. [51794/18]

Written answers

Tánaiste and Minister for Foreign Affairs and Trade

On 10 December, the European Court of Justice gave its judgement that the UK can revoke its Article 50 notification, unilaterally, at any point up to its withdrawal from the Union. The Court made clear that it would have to be an unequivocal and unconditional decision, taken in accordance with the UK’s constitutional requirements. Were the UK to decide to revoke, the withdrawal procedure would be ended and the UK would remain an EU Member State. Ultimately, any decision to revoke its Article 50 notification would be for the UK, and it would not be appropriate to comment on what would be an internal matter for it. The EU and UK have agreed a withdrawal agreement and political declaration on the framework for the future relationship. Our focus is on seeing this deal ratified and implemented.

Brexit Negotiations

Questions (68)

Micheál Martin

Question:

68. Deputy Micheál Martin asked the Tánaiste and Minister for Foreign Affairs and Trade if his officials have assessed the advice of the UK Attorney General regarding the backstop provisions in the Brexit draft withdrawal agreement; and if he has sought legal advice on same. [52119/18]

Written answers

Tánaiste and Minister for Foreign Affairs and Trade

The European Union and Legal Divisions of my Department have reviewed the UK Attorney General’s advice on the “Legal Effect of the Protocol on Ireland/Northern Ireland”, as published on 5 December, as well as the “Legal Position on the Withdrawal Agreement”, presented to the UK Parliament by him on 3 December. The advice, including that on the backstop provisions, is consistent with the UK Government’s “Explainer for the agreement on the Withdrawal of the United Kingdom of Great Britain and North Ireland from the European Union”, published on 14 November 2018, and the European Commission’s fact sheets on the Withdrawal Agreement and the Protocol, also published on 14 November. It is also in line with our own understanding. The Withdrawal Agreement is a treaty between the EU and the UK. Should an issue of interpretation arise in the future, it would be for the Legal Services of the European Commission and the Council of the EU, to lead on the EU side.

While the legal advice is of interest, what is important is that the UK Cabinet agreed on 14 November that the draft text of the Withdrawal Agreement was an acceptable basis on which to proceed.

Parliamentary Questions Data

Questions (69)

Catherine Murphy

Question:

69. Deputy Catherine Murphy asked the Minister for Finance the number of parliamentary questions his Department has processed in the past three years to date; the number of questions answered directly; the number of questions referred to bodies or agencies under the aegis of his Department for direct reply; the number of staff who are assigned to his parliamentary questions section; and if non-departmental staff, advisers and-or public affairs and relations companies have composed parliamentary question replies or had an act or hand in forming parliamentary question replies in the timeframe specified. [52241/18]

Written answers

Minister for Finance

The number of Parliamentary Questions which have been processed by my Department is 2,814 in 2016, 3,898 in 2017 and 3,316  to date in 2018.  Accounting for transfers, disallowances and withdrawals of PQs, the following are the statistics for answered PQs: 2,528 in 2016; 3,434 in 2017; and 2,798 in 2018 (as of 6th December). 

The Department does not refer PQs to Bodies or Agencies under our Aegis; in practice where a PQ response requires input from a Body under the Aegis, their input is sought and information in the Department's overall response is included for the relevant Body.  This occurs either centrally in Corporate Affairs or at a Division level, depending on the nature of the question.

Currently there are three members of staff who are assigned to the administrative processing of Parliamentary Questions (amongst other duties), 1 HEO and 1 EO (FTE 80%) in the Parliamentary Questions Section and 1 CO in the Minister's Office.

Advisers to the Minister assist in the checking and processing of parliamentary questions as part of their normal duties.

Mortgage Book Sales

Questions (70)

Clare Daly

Question:

70. Deputy Clare Daly asked the Minister for Finance his plans to deal with the latest tranche of mortgages by a bank (details supplied) which are being passed on to companies in view of the resulting insecurity and stress being caused to homeowners; and if he will make a statement on the matter. [52306/18]

Written answers

Minister for Finance

The Deputy will be aware that a reduction in the level of non performing loans (NPLs) across European banks is a major priority for the banking regulator, the SSM. The Irish banks have made significant progress in this regard since the height of the crisis with NPLs at the banks in which the State has a shareholding reducing by 70% from €54bn to €16bn at end-June 2018. A major contributor to this has been the almost 136,000 mortgage restructures that have been put in place. 

Despite this progress, the NPL ratios at the Irish banks remain at an elevated level and are well above the European average of around 4%. PTSB is a particular outlier and had a ratio of 16% even after the bank’s loan sale – Project Glas – which was announced in July. Project Glenbeigh – PTSB’s second NPL transaction of 2018 announced on 29th November, will achieve a further significant reduction in the bank’s NPL ratio to below 10%.

It is important to reiterate that the protections in place for all borrowers before a sale, either by way of securitisation or otherwise, remain unchanged. Start Mortgages, who purchased the Glas portfolio in July, and Pepper, who now hold legal title to the Glenbeigh mortgages and who will act as servicer and administrator of the mortgages, are both regulated by the Central Bank of Ireland. When dealing with borrowers, these firms are required to comply with the Consumer Protection Code and the Code of Conduct for Mortgage Arrears. Furthermore, it has been confirmed in the case of this latest transaction that the terms of an agreed restructure will continue to be honoured.

In addition, earlier this year I asked the Central Bank to carry out a review of the CCMA to ensure it remains as effective as possible. The result of this review was published in October and it is encouraging to note that the key findings included confirmation that for borrowers who engaged with the process, the CCMA is working effectively as it is intended in the context of the sale of loans by regulated lenders.

Finally, I wish to highlight that I cannot stop loan sales, even by the banks in which the State has a shareholding. These decisions are the responsibility of the Board and management of the banks which must be run on an independent and commercial basis. The banks’ independence is protected by Relationship Frameworks, which are legally binding documents that I cannot change unilaterally.

Banking Licence Applications

Questions (71)

Michael McGrath

Question:

71. Deputy Michael McGrath asked the Minister for Finance the number of licence applications before the Central Bank by category; the number of approvals provided in 2016, 2017 and to date in 2018, by category; and if he will make a statement on the matter. [52348/18]

Written answers

Minister for Finance

It was not possible for the Central Bank of Ireland to provide the information sought in the time available and, therefore, I will make arrangements to provide the Deputy with the information in line with Standing Orders.

Strategic Banking Corporation of Ireland

Questions (72)

Richard Boyd Barrett

Question:

72. Deputy Richard Boyd Barrett asked the Minister for Finance the reason the State has secondary security over moneys loaned by the Strategic Banking Corporation of Ireland to a company (details supplied) while the minority lender has a stronger fixed and floating charge; and if he will make a statement on the matter. [52387/18]

Written answers

Minister for Finance

The role of the Strategic Banking Corporation of Ireland, the SBCI, is to provide effective financial supports to Irish SMEs and encourage competition and innovation in the SME finance market while also ensuring the efficient and effective use of available EU resources. The SBCI, as the Deputy is aware, does not provide financing directly to small businesses using an on-lending model. The SBCI operates through partner finance providers, known as on-lenders. The SBCI works with both bank and non-bank finance providers.

I am advised by the SBCI that it enters into facilities with its on-lenders on a commercial and market neutral basis. The SBCI will consider applications from all finance providers to be an SBCI on-lender on the basis of general criteria. The SBCI consequently avoids commenting on specific on-lenders and cannot reveal commercially sensitive information regarding their individual facilities. The same approach applies to prospective on-lenders. However, each on-lender is different in terms of size structure, financial strength, parental or group support etc.

The Deputy may rest assured that SBCI carries out due diligence and a thorough assessment of each prospective on-lender to ensure that the appropriate legal and corporate structure is put in place to ensure that the taxpayers’ position is protected. I am informed this can include, where necessary, coming to arrangements with that on-lender’s other creditors in relation to security over assets.

Strategic Banking Corporation of Ireland

Questions (73)

Richard Boyd Barrett

Question:

73. Deputy Richard Boyd Barrett asked the Minister for Finance the reason €675 million of Strategic Banking Corporation of Ireland funding has as of December 2016 gone to the pillar banks (details supplied) and only 11% of its drawn down lending has gone to working capital for SMEs in view of the fact that it was established to lend to SMEs; and if he will make a statement on the matter. [52388/18]

Written answers

Minister for Finance

The Strategic Banking Corporation of Ireland, the SBCI, is Ireland’s national promotional institution. Its strategic mission is to increase the availability of appropriately priced, flexible funding to viable Irish SMEs by delivering effective financial supports to Irish SMEs that address failures in the Irish credit market, while encouraging competition and innovation and ensuring the efficient use of available EU resources. The SBCI does not provide funding directly to small businesses, rather it operates through partner finance providers, known as on-lenders. The SBCI currently has three bank and three non-bank on-lenders.

The SBCI initially provided funding to pillar banks in order to take advantage of their broad existing customer bases and to enable as wide a distribution as possible of lower costs loans to SMEs.

Since December 2016 the SBCI has also provided to date over €250 million of funding to non-bank finance providers to help increase competition in the SME finance market in Ireland. The SBCI’s funding is deployed across a variety of products, including working capital as well as asset financing, leasing and invoice discounting, to give a range of loan options for SMEs. Since it began its activities in March 2015, to the end of March 2018, a total of €952 million SBCI supported loans have been drawn down by eligible SMEs, 25% of which were for working capital purposes.

Strategic Banking Corporation of Ireland

Questions (74)

Richard Boyd Barrett

Question:

74. Deputy Richard Boyd Barrett asked the Minister for Finance his views on whether a series of financial matters concerning a person (details supplied) is appropriate or a potential abuse; and if he will make a statement on the matter. [52389/18]

Written answers

Minister for Finance

The Strategic Banking Corporation of Ireland, the SBCI, is a Designated Activity Cody (DAC) under the Companies Act 2014 and has an independent Board of Directors. 

In relation to the first part of the Deputy’s question regarding members of the SBCI Board, the SBCI is a public body and is subject to the Revised Code of Practice for the Governance of State Bodies 2016, which contains a number of provisions that boards of public bodies must follow to address actual and potential conflicts of interest of their Board members. The SBCI has informed me that it is satisfied it has complied with those requirements.

In relation to the second part of the Deputy’s question, I am advised that the SBCI enters into facilities with its on-lenders on a commercial and market neutral basis. The SBCI will consider applications to be an on-lender from all finance providers. Consequently, the SBCI avoids commenting on specific on-lenders and cannot reveal commercially sensitive information regarding individual facilities.

However, I am informed that the SBCI engages in regular monitoring to ensure that new loans, equivalent to the amount it has provided to each on lender, is deployed to eligible SMEs. Each on-lender is different in terms of size structure, financial strength, parental or group support. The Deputy may rest assured that the SBCI thoroughly assesses each on-lender and carries out appropriate due diligence to ensure that the appropriate legal and corporate structure is put in place so that the taxpayers’ position is fully protected.

Strategic Banking Corporation of Ireland

Questions (75)

Richard Boyd Barrett

Question:

75. Deputy Richard Boyd Barrett asked the Minister for Finance further to a freedom of information request, the reason onlenders of SBCI moneys are not required to obtain a copy of current tax clearance certificates from their respective customers leaving the State exposed to tax losses; and if he will make a statement on the matter. [52390/18]

Written answers

Minister for Finance

The purpose of the SBCI is to deliver effective financial supports to Irish SMEs. The SBCI does not provide funding directly to small businesses, rather it operates an on-lending model which involves working through partner finance providers, known as on-lenders. The SBCI currently has three bank and three non-bank on-lending partners.

I take it that the Deputy is asking whether the SBCI makes it a requirement for its on-lenders to seek a tax clearance certificate from the SME borrowers that receive SBCI loans. I have been advised by the SBCI that seeking tax clearance certificates from borrowers is a matter for the on-lenders. They provide lending into SMEs in accordance with their normal credit policies and procedures. 

Due to its on-lending model, the SBCI’s direct relationship is with its on-lending partners. The SBCI enters into facility agreements with its on-lenders and these agreements set out the obligations in relation to the funding provided by the SBCI, including terms and conditions to protect taxpayers from potential losses.

Paradise Papers

Questions (76)

Michael McGrath

Question:

76. Deputy Michael McGrath asked the Minister for Finance the work of the Revenue Commissioners on certain taxation matters revealed by documents (details supplied); the number of cases it is pursuing; the amount of tax involved; the amounts of tax, interest and penalties collected; and if he will make a statement on the matter. [52394/18]

Written answers

Minister for Finance

I am advised by Revenue that identifying and confronting non-compliance is a key focus for its work, and that this includes the use of offshore accounts, trusts or funds to evade tax. Revenue’s work in this regard, including the Foreign Income and Assets Disclosure initiative last year, has yielded some €1.2 billion to the Exchequer to date.

I am also advised that in targeting and acting against failures to comply with tax obligations, Revenue seeks to make the best possible use of all available information through the use of data analytics, social network analysis and anomaly detection tools.

The International Consortium of Investigative Journalists and their media partners internationally have, over recent years, made large disclosures of documents relating to offshore matters, known as the Panama and Paradise papers. While the volume of documents made available was substantial, it is understood that a considerable number were withheld from general release. I understand that Revenue approached the International Consortium of Investigative Journalists and its Irish media partner asking whether further information could be made available, but did not receive a positive response.

I am advised that Revenue examined the published information to identify any cases with links to Ireland and identified offshore companies, individuals, addresses and intermediaries of possible interest.  These cases were profiled and it was found that, in many instances, no further action was required.  There were instances also where the nature or age of the published information, or the current status of the entity concerned (liquidated, dormant or non-resident) meant that further action was not possible.

Enquiry letters were issued in over 100 cases, and a large majority of these have been closed with no Irish tax issues identified. Follow-up on remaining cases is proceeding. Settlements have been made in 6 cases, yielding €400,000.

In addition, I understand that Revenue wrote to two banks asking if they had any information, or records on the opening of offshore accounts or the depositing of funds in offshore accounts on behalf of Irish resident persons, not already disclosed to Revenue on foot of High Court orders under section 908 of the Taxes Consolidation Act 1997. Both banks responded that all information that had been encompassed by the terms of the High Court orders had been provided to Revenue.

Revenue worked closely with the Organisation for Economic Cooperation and Development’s Joint International Taskforce on Shared Intelligence and Collaboration (JITSIC) in relation to the Panama and Paradise papers and the experience gained by the countries that engaged in this process has established a basis for effective cooperation and information-sharing in the event of any future data disclosures of this kind. There is, also, increasingly close cooperation between tax authorities worldwide in targeting those who seek to hide profits or gains offshore. Significant quantities of information are becoming available to Revenue under arrangements for automatic exchange of information, including FATCA (an inter-Governmental agreement to share information with the United States of America), DAC (a number of EU Directives on Administrative Cooperation) and CRS (the OECD’s Common Reporting Standard). All these mechanisms are providing tax authorities with greater visibility in relation to the offshore assets and income of their tax residents: I understand that Revenue has concluded some 190 interventions, with a yield of some €1.2 million, in cases involving previously undisclosed offshore assets.

I believe that Revenue’s work against offshore evasion has been committed and effective and I am assured that action against those who attempt to use offshore means to escape their tax responsibilities will continue to be a high priority target of Revenue’s compliance programmes.

Insurance Industry Regulation

Questions (77, 78, 79)

Michael McGrath

Question:

77. Deputy Michael McGrath asked the Minister for Finance if there is a mechanism in place in Denmark to pay outstanding claims when an insurance company goes into liquidation; if the mechanism will be applicable to Irish claimants as a result of the failure of a company (details supplied); if Irish claimants will receive 100% of compensation under this mechanism; and if he will make a statement on the matter. [52448/18]

Michael McGrath

Question:

78. Deputy Michael McGrath asked the Minister for Finance if the insurance compensation fund or the yet to be established motor insurers insolvency compensation fund will be needed to pay claimants as a result of the failure of a company (details supplied); if so, the fund which will be used; if Irish claimants will receive 100% of the compensation; and if he will make a statement on the matter. [52449/18]

Michael McGrath

Question:

79. Deputy Michael McGrath asked the Minister for Finance the number of Irish claims yet to be paid in full by motor insurance, public liability insurance, employer liability insurance or other insurance headings regarding the failure of a company (details supplied); and if he will make a statement on the matter. [52450/18]

Written answers

Minister for Finance

I propose to take Questions Nos. 77 to 79, inclusive, together.

The Central Bank of Ireland announced on 28 November that it had received information that Qudos Insurance A/S, a Denmark-based insurer, had entered into solvent liquidation. On 4 December, Qudos Insurance A/S announced that it is currently not paying insurance claims. The Central Bank is actively monitoring developments and is liaising regularly with its Danish counterparts, the supervisory authorities of other affected member states and EIOPA.

Qudos Insurance A/S is a Danish-based insurance firm, and is subject to prudential supervision by the Danish Financial Supervisory Authority. Qudos Insurance A/S was selling non-life insurance policies, (mainly motor and home policies), in Ireland through the broker network on a freedom of services basis. 

It is understood that there are approximately 50,000 policyholders, in Ireland that have been impacted by the developments with Qudos.  Patrona Underwriting has issued a statement saying that policies remain valid and in force until their natural expiry date, however given the current Qudos position and in line with Central Bank recommendations they have provided brokers with options to replace all insurance covers with other providers at no extra cost to consumers. Qudos Insurance A/S has published a Q&A for policyholders on its website - http://www.qudosinsurance.dk/qa/.

Early indications suggest that there are in the region of 1,400 claims outstanding in relation to Irish policyholders, but this is subject to confirmation. 

I understand that the Danish liquidators are currently continuing their review of the company with a view to determining its underlying financial position. Once this exercise is concluded they will be in a better position to determine whether the company can pay existing claims.  It is expected that more information regarding this matter should be available within the next two weeks.

It should be noted that my officials have been in contact with the Danish Finance Ministry, who  advise on the basis of information they have received from the Danish Financial Supervisory Authority, that as the company is in solvent liquidation, claims will be met.  However, the Ministry also indicated that if ultimately Qudos is placed into bankruptcy, and this happens after 1 January 2019,  that the Danish Insurance Guarantee Scheme will not be liable to meet these claims due to a legislative change in May 2018. In such a situation claimants may  instead be eligible for cover from the Irish Insurance Compensation Fund (ICF), subject to its terms and conditions and the particular circumstances of the case. In the case of third-party motor insurance claims, 100% of the cost of a claim may be available in line with the changes made to the Insurance (Amendment) Act 2018. This  will mean if used, an initial full pay-out from the Insurance Compensation Fund with a recoupment of 35% from the new Motor Insurers Insolvency Compensation Fund.

Mortgage Lending

Questions (80)

Michael McGrath

Question:

80. Deputy Michael McGrath asked the Minister for Finance the specific type of SPV model used for the securitisation of mortgages by banks (details supplied); if the vehicle will be tax exempt; if the distributions from the vehicle will be taxed here; and if he will make a statement on the matter. [52451/18]

Written answers

Minister for Finance

I would like to advise the Deputy that I am not in a position to comment on the activities of individual taxpayers. I can however give the following overview of Section 110 of the TCA 1997 as it relates to the securitisation of mortgages by banks .

Section 110 of the Taxes Consolidation Act 1997 sets out a regime for the taxation of special purpose companies set up to securitise assets.  The tax provisions are intended to create a tax neutral regime for bona-fide securitisation and structured finance purposes. 

The purpose of securitisation in this respect is to allow banks to free up capacity on their balance sheets to engage in lending.  The ability to securitise is seen by the European Banking authority as essential to a properly functioning banking sector, and is a key part of the EU’s capital market union action plan.

Finance Act 2012 introduced two key restrictions on the ability of a section 110 company to take a tax deduction for interest in respect of the “profit participating note” (PPN).  The first is that where the interest is paid to a connected person, the Irish 110 company cannot take a tax deduction unless the recipient is in a country with which we have a double tax agreement and is subject to tax on that interest.  The second is that a tax deduction is not available where there is a tax avoidance motive.

Additionally, further changes were made to Section 110 regime as part of the 2016 Finance Act. The purpose of the changes was to ensure that investors paid the appropriate tax on gains arising from the disposal of loans that were secured over Irish land: namely Irish mortgages. This was achieved by treating mortgages as a separate business in respect of the PPN.  

Prior to the 2016 changes these profits were being removed from the Irish tax net through the use of the aforementioned PPN. The 2016 amendments restricted the ability of a qualifying company to take a tax deduction for interest on a PPN where it arose from gains on Irish mortgages.

When the 2016 amendments were introduced, an exception was included for securitisations carried out in line with the Capital Requirement Regulation of 2013 on prudential requirements for credit institutions and investment firms (CRR). CRR requires an originator to retain an economic interest of at least 5% in assets which it subsequently sells by way of a securitisation. There are two key differences between securitisations carried out in line with CRR and the transactions which gave rise to the amendments made as part of the 2016 Finance Act. 

- Securitisations are not outright sales of loans. 

- Securitisations must have tranched debt.

This exception to the general 2016 amendment is only available:

- where the securitisation is being undertaken by the original lender, or

- where the securitisation is not by the original lender, it is by a financial institution or credit institution, regulated in the EU or EEA.

In relation to the taxation of the vehicle named, as I have already stated I am not in a position to comment on individual taxpayers.

Mortgage Lending

Questions (81)

Thomas P. Broughan

Question:

81. Deputy Thomas P. Broughan asked the Minister for Finance his views on the recent Central Bank loan-to-income and loan-to-value mortgage rules review by the Governor of the bank; and if he will make a statement on the matter. [52474/18]

Written answers

Minister for Finance

The Central Bank of Ireland has an overall and independent responsibility to promote and protect financial stability and the mortgage lending measures are an important tool available to the Bank for that purpose.  As the Deputy is aware, the Central Bank recently published its 2018 review of the residential mortgage macro prudential rules (available at this link) and the Bank indicated, following the review, that the mortgage lending limits would remain unchanged.  I note in particular the Bank's position that the mortgage measures, as part of the wider macro prudential framework, are continuing to achieve the twin objectives of contributing to overall financial stability and protecting individual borrowers.  Nevertheless, the Central Bank will continue monitor developments and it indicated that it will, if necessary at a future point, adjust its macro-prudential policy tools in order to continue to safeguard the stability of the financial system and to protect consumers from excessive debt burdens.

Licensed Moneylenders

Questions (82)

Thomas P. Broughan

Question:

82. Deputy Thomas P. Broughan asked the Minister for Finance if he has contacted the Governor of the Central Bank regarding its policy on the granting of moneylending licences; and if he will make a statement on the matter. [52475/18]

Written answers

Minister for Finance

The Central Bank is independent in the performance of its functions in relation to the granting of licences for regulated activities and it would not be appropriate for me to contact them in relation to the granting of a licence to a specific applicant.

The Register of Moneylenders, which is available to the public on the Central Bank’s website, sets out details such as the maximum APR, maximum cost of credit and the collection charge (if any) of the loans that can be offered by individual moneylenders. 

Earlier this year, the Central Bank engaged in a public consultation process in relation to a review of the Consumer Protection Code for Licensed Moneylenders and I understand that the Bank expects to finalise and publish Regulations under Section 48 of the Central Bank (Supervision and Enforcement) Act 2013 to replace this Code in 2019.

Economic and Monetary Union

Questions (83)

Thomas P. Broughan

Question:

83. Deputy Thomas P. Broughan asked the Minister for Finance his views on the recent comments on fiscal and monetary integration of the EU by the finance Minister of Germany; and if he will make a statement on the matter. [52476/18]

Written answers

Minister for Finance

I meet regularly with all my European Ministerial colleagues at the Eurogroup and ECOFIN meetings to discuss the deepening of Economic and Monetary Union. I am also aware that German Finance Minister Olaf Scholz gave a speech at Humboldt University in Berlin last month, during which he touched on many of the elements we have been discussing in these meetings.

We have been working to an agenda set by EU Leaders at the June 2018 Euro Summit, when EU Leaders asked Finance Ministers to work on the terms of reference for the operation of the common backstop to the Banking Union’s Single Resolution Fund, which exists to assist in the resolution of systemically important banks that are failing or deemed likely to fail. We were also directed to develop a term sheet for our ongoing work on reform of the European Stability Mechanism, which is the euro area’s crisis lending body.

In addition to these issues, the Eurogroup has also been discussing possible new budgetary instruments aimed at strengthening the euro area. This has included proposals put forward by the European Commission and France and Germany for the establishment of instruments for competitiveness, convergence and stabilisation. A proposal was put forward by France and Germany in the joint Meseberg Declaration released in June. This was followed by an outline of the proposal for a euro zone budget, to be part of the EU budget, which was released in November.

At the Eurogroup meeting on 3 December, my colleagues and I were able to agree a comprehensive package of measures to be put forward to Leaders at the 14 December Euro Summit. The Report to Leaders on EMU Deepening outlines what we have agreed. This includes a comprehensive terms of reference for the common backstop to the Single Resolution Fund and reforms to the European Stability Mechanism’s toolkit of financial instruments and its role within programmes of financial assistance. In addition, Leaders are asked for guidance on the way forward on the French-German proposals, which are at a very early stage of discussions between Finance Ministers, relative to our work on completing Banking Union and ESM reform.

Irish Fiscal Advisory Council Reports

Questions (84)

Thomas P. Broughan

Question:

84. Deputy Thomas P. Broughan asked the Minister for Finance his plans to meet with the Irish Fiscal Advisory Council following its recent critical fiscal assessment of budget 2019; and if he will make a statement on the matter. [52477/18]

Written answers

Minister for Finance

I assume the Deputy is referencing the Fiscal Assessment Report (FAR) as published on 28 November by the Irish Fiscal Advisory Council, in relation to Budget 2019. This publication is in fulfilment of the Council's legal mandate to assess and endorse the Government's macro-economic and budgetary forecasts.  

Although I have no arrangements currently to meet with the Council, I am in the process of preparing my formal response to the FAR in which I will address a number of the key issues it raises. As has been the established practice in previous years, this will be published on my Department’s website in due course.