Written Answers Nos. 247-261
249. Deputy Thomas Pringle asked the Minister for Finance the estimated cost to the Exchequer of removing the 23% VAT rate on sunscreen products of SPF30 and above; and if he will make a statement on the matter. [29327/23]
View answerThe VAT rating of goods and services is subject to EU VAT law, with which Irish VAT law must comply. In general, the Directive provides that all goods and services are liable to VAT at the standard rate unless they are exempt from VAT or fall within Annex III of the Directive, in respect of which Member States may apply reduced rates of VAT.
Under VAT law, there is no scope for a reduction in the rate of VAT on sunscreen products. The supply of sunscreen products is liable to the standard rate of VAT, currently 23%.
250. Deputy Denis Naughten asked the Minister for Finance if he will outline the implementation of circular 25/2016 by each State body under the aegis of his Department; and if he will provide, in tabular form, by State agency, the compliance with each of the standards and timelines set out in responding to Oireachtas Members’ queries; and if he will make a statement on the matter. [29474/23]
View answerThe Code of Practice for the Governance of State Bodies 2016 (the Code) provides a framework for the application of best practice in corporate governance by commercial and non-commercial State bodies. Circular 25/2016 sets out the protocol and standards for the provision of information by State Bodies to Members of the Oireachtas, and forms part of the requirements of the Code.
It should be noted that while the provisions of the Code are directly applicable to a number of State bodies under the aegis of my Department, all of the bodies, where appropriate, under my Department’s remit adhere to the protocol and standards in Circular 25/2016.
The Credit Union Advisory Committee is an advisory committee set up to advise the Minister for Finance in relation to credit union matters. It meets on a monthly basis in my Department, with Department officials providing a secretariat function.
The Credit Union Restructuring Board concluded its restructuring work on 31 March 2017. It was operationally wound down on 31 July 2017 and is awaiting final dissolution.
The Disabled Drivers Medical Board of Appeal (DDMBA) is a board of medical practitioners appointed by the Minister of Finance from a body of interested registered medical practitioners, on the recommendation of the Minister of Health. The DDMBA is currently not operational.
The information in the attached table is provided by the remaining bodies under my Department’s remit in relation to the standards and timelines set out in Circular 25/2016.
|
Body under aegis of the Department of Finance |
Provide and maintain a dedicated email address for Oireachtas members, and notify/publicise this to Oireachtas members |
Put in place formal feedback processes to obtain feedback from Oireachtas members |
Comply with target deadlines and standards in terms of acknowledgements and substantive responses to queries, as follows: - Response time for acknowledgement of a query is 3 working days. Acknowledgement should include contact details for the staff member dealing with the query; - Response time for substantive reply is 15 working days |
Designate a person at senior management level within the State Body with responsibility for ensuring the timely provision of information to members of the Oireachtas |
Report annually (in Chairperson’s comprehensive report to the relevant Minister) on compliance with standards set out in this Circular |
In the spirit of Open Government Partnership, bodies should seek, where appropriate, to publish the response to queries from members of the Oireachtas on their website |
|
Central Bank of Ireland |
pqs@centralbank.ie |
Yes |
Yes |
Yes |
Yes |
Yes |
|
Credit Review Office |
info@creditreview.ie |
The Credit Review Office is a relatively small body and while the provisions of the Code do not apply to it, it adopts the Code on a voluntary basis and applies any provisions as appropriate to a body of its size. |
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Financial Services and Pensions Ombudsman (FSPO) |
oireachtas@fspo.ie |
Yes. The FSPO maintains a dedicated space on its website in relation to the provision of information to members of the Oireachtas: www.fspo.ie/governance/Oireachtas-Enquiries.asp. The FSPO has also committed, in its Communications and Stakeholder Engagement Strategy 2022-2025, to conduct a survey of Oireachtas members and will do so over the course of the strategy. |
Yes. The target deadlines for responding to queries from Oireachtas members are 3 working days for an acknowledgement and 15 working days for a substantive response, noting it seeks to exceed these deadlines where possible. Where there is any expected delay, this is communicated to the Oireachtas member. |
Yes. The Director of Corporate & Communications Services |
Yes |
Yes, as outlined on the website, noting, however, that no such responses to queries have been published to date. |
|
Home Building Finance Ireland (HBFI) |
oireachtas@hbfi.ie |
No Oireachtas queries relevant to HBFI have been received to date via the dedicated e-mail address. On receipt of any such requests from Oireachtas members, HBFI will consider the best format for feedback. |
HBFI has not processed any Oireachtas queries |
Yes |
HBFI has not processed any Oireachtas queries |
HBFI has not processed any Oireachtas queries |
|
Investor Compensation Company DAC |
pqs@centralbank.ie |
While the provisions of the Code do not apply to the Investor Compensation Company DAC (ICCL), it voluntarily adopts elements of the Code that are appropriate to its mandate. If ICCL were to receive requests from members of the Oireachtas seeking the provision of information within the scope of its mandate, it would engage with each request on a case-by-case basis, subject to available resources, in a timely manner as it does with Parliamentary Questions. |
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Irish Bank Resolution Corporation (IBRC) |
pqs@ibrc.ie |
N/A – IBRC is in advanced liquidation- no formal processes are put in place on the matter however, informal feedback is sought periodically. |
Yes - however, where the PQ involves a complex area that may require additional time for information gathering, an extension may be sought to comply with the PQ. |
Yes |
N/A – as IBRC is in an advanced stage of liquidation, no formal processes have been put in place for this item. |
N/A – as IBRC is in an advanced stage of liquidation, no formal processes have been put in place for this item. |
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Irish Financial Services Appeals Tribunal (IFSAT) |
registrar@ifsat.ie |
The provisions of the Code not apply to the IFSAT. IFSAT is a statutory tribunal established to hear specific appeals against certain appealable decisions of the Central Bank. It operates within the parameters of the Central Bank Act 1924 (as amended). IFSAT has no employees and Tribunals are convened as appeals arise. The administrative processes are carried out by the Registrar. In the circumstances feedback from Oireachtas, for example by way of periodic surveys, is unlikely to be sought. |
Yes |
Yes. The Registrar |
Yes, as and when it arises. |
Yes, where appropriate, as and when it arises. |
|
Irish Fiscal Advisory Council (IFAC) |
oireachtas.queries@fiscalcouncil.ie |
No. The Council and Secretariat review appearances before an Oireachtas committee. |
Yes. |
Yes. This is designated to the Chief Economist/Head of Secretariat at the Fiscal Council. |
Yes |
Yes, engagement with the Oireachtas is published on the Fiscal Council’s website: www.fiscalcouncil.ie/oireachtas-committee/ |
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National Asset Management Agency (NAMA) |
oir@nama.ie This address is formally communicated to members approx. every 6 months as part of the NAMA Annual Report and Year End updates. |
No surveys are carried out or formal feedback sought, however, informal feedback has indicated that this communication channel has worked well. Oireachtas members are welcome to provide feedback at any time via the NAMA email address. |
Oireachtas emails are typically fully responded to on the day received or within 24/48 hours. If a substantive response is to take longer, an acknowledgement email is issued with an estimated timeframe for the final response (usually within a week). |
Yes. The CEO and/or Chief Strategy and Transformation Officer oversee all Oireachtas and PQ responses. |
NAMA’s Statement on Internal Control (reported annually in NAMA’s Annual Report and Financial Statements and referred to in the Chairperson’s Comprehensive Report to the Minister) summarises NAMA’s Public Reporting procedures. |
All NAMA PQ responses are published on the Oireachtas website. As other Oireachtas queries typically relate to enquiries about properties or debtors, we are not permitted legally under Sections 99/202 of the NAMA Act from disclosing confidential information. |
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National Treasury Management Agency (NTMA) |
OireachtasQuery@ntma.ie |
The NTMA has received a very low volume of queries to date and, as the volume increases, the NTMA will consider the best format for feedback. |
Yes. These requirements are set out in the relevant NTMA internal procedure and substantive replies to queries received were provided within 15 days. |
Yes |
The NTMA complies with the Code, apart from the adaptations set in its oversight agreement including and relating to section 8.23 on Circulars and Guidelines. The Chairperson reports annually on compliance with the Code in their Chairperson’s Comprehensive Report to the Minister, and this report is prepared in accordance with the requirements of the Code. |
The NTMA considers queries received on a case-by-case basis to determine appropriateness of publication. |
|
Office of the Comptroller and Auditor General |
pq@audit.gov.ie |
Yes. The Office follows international norms by voluntarily from time to time engaging an independent external assessment of its performance against international standards and good practice, often in the form of a “peer review”. The most recent review was completed in 2020. The review team interviewed a range of stakeholders including Oireachtas members. In addition, the Office has also gathered stakeholder feedback (including Oireachtas members) on a number of occasions, such as a survey in 2016 and qualitative research in 2019. |
Yes |
Yes |
The provisions of the Code do not apply to Government Offices. |
The Office does not currently publish the response to queries on its website. |
|
Office of the Revenue Commissioners |
Revenue provide a long- established dedicated telephone service for Oireachtas members and Members of the European Parliament (MEPs) as part of the suite of their customer services. The aim of the telephone service is to respond to taxation queries, in a timely, efficient, and effective manner. A key objective of the phone service is to provide timely information to Oireachtas members/MEPs which, in many cases, minimises the need for Parliamentary Questions or formal representations to the Minister for Finance or the Chairman of the Revenue Commissioners. The Oireachtas line is open Monday to Friday from 9.30-17.00 (excluding lunchtime) providing, in the majority of cases, an immediate/same day resolution. The remaining queries which, are more complex in nature are generally answered within three days. Revenue’s Oireachtas Helpline service is provided solely via telephone. If a written reply is requested, the TD, Senator, MEP or their staff member is asked, to make a representation to the Chairman’s Office where a written reply will issue with the information requested. |
No. Periodic surveys have not yet been implemented by the Oireachtas Helpline. |
Yes |
Yes |
No. Revenue’s Annual Report includes headline figures for the number of Parliamentary Questions and Representations to the Chairman’s Office but not granular detail on timeliness of responses. |
Parliamentary Questions and Representations to the Chairman’s Office, and responses thereto, are published, where appropriate, on www.revenue.ie/en/corporate/information-about-revenue/governance/pqs-and-reps.aspx |
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Strategic Banking Corporation of Ireland (SBCI) |
oireachtas@sbci.gov.ie |
No. The SBCI has received a very low volume of queries to date and, as the volume increases, the SBCI will consider the best format for feedback. |
Yes |
Yes |
No. In accordance with the Code, the SBCI seeks feedback from the Minister regularly when submitting its Annual Reports and updates to its Strategic Plans. |
No. The SBCI considers queries received on a case-by-case basis to determine appropriateness of publication. |
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Tax Appeals Commission (The Commission) |
oireachtas@taxappeals.ie |
The Commission has not received any queries but may consider a feedback process in the future. |
Yes |
Yes |
The Commission has never published any summary details in relation to the number of Parliamentary Questions and Representations it receives, but will do so in future Annual Reports. |
Yes |
251. Deputy Michael Healy-Rae asked the Minister for Finance the reason stamp duty is 6.5% when buying farmland; and if he will make a statement on the matter. [29500/23]
View answerThe rate of stamp duty that applies to the acquisition of non-residential property, a category that includes farmland, has, since 9 October 2019, been set at 7.5%.
All land (as opposed to buildings and their sites/curtilages), including agricultural land, is classified as non-residential property for stamp duty purposes.
Any re-categorisation of agricultural land as residential property (which is subject to a stamp duty rate of 1% on value up to and including €1 million, and 2% on any value above that), or as some third form of property, for the purposes of stamp duty would be inconsistent with the application of stamp duty to other forms of business.
It may interest the Deputy to know that there are a number of stamp duty related reliefs which are currently available to the farmers. These reliefs considerably reduce the applicable rate on agricultural land for qualifying acquisitions. These reliefs include Farm Consolidation Relief, Young Trained Farmer Stamp Duty Relief and Consanguinity Relief.
252. Deputy Alan Dillon asked the Minister for Finance if his Department has initiatives and plans to facilitate the adoption of alternative fuel source to transition to greener transportation options; if he can provide details on any financial incentives, grants, or assistance programmes currently in place or being considered to encourage the utilisation and production of hydrotreated vegetable oil fuel, biofuels, biomethane, green hydrogen or other greener fuels; and if he will make a statement on the matter. [29502/23]
View answerI am advised by my colleague, the Minister for Transport, that the Renewable Transport Fuel Obligation (RTFO) places a statutory obligation on suppliers of road transport fuel to ensure that a proportion of the fuels that are placed on the market in Ireland are produced from renewable sources and that renewable transport fuels adhere to sustainability and greenhouse gas emissions criteria. Economic operators within the obligation are awarded RTFO certificates for each megajoule (MJ) of renewable transport fuel placed of in the market or two RTFO certificates per MJ where it is produced from feedstock set out in Annex IX of the Renewable Energy Directive.
Following a statutory consultation process, the Minister for Transport made regulations under section 44G of the 2007 Act on 31 March 2023, which became operational on 1 April, aligned to the administrative requirements of the RTFO. The regulations authorise the National Oil Reserves Agency (NORA) to issue additional Renewable Transport Fuel Obligation (RTFO) certificates for specified renewable transport fuels, where those fuels are used for specific purposes or means of transport, to incentivise their supply. The renewable transport fuels specified include Hydrogenated vegetable oil (HVO), biomethane, green hydrogen, and renewable transport fuels used in aviation and maritime. It is envisaged that these regulations will be kept under review within the context of the development and implementation of the renewable transport fuel policy.
The 2023 RTFO rate is 17%. The rate of the obligation will increase on an indicative trajectory until 2030 and is subject to annual review and analysis. The Renewable Fuel for Transport Policy Statement sets out the annual increase in the Renewable Transport Fuel Obligation (RTFO) rate (provided for under Part 5A of the National Oil Reserves Agency Act 2007) to support the achievement of the Climate Action Plan E10/B20 target by 2030 and European obligations.
With regard to tax treatment of biofuel, taxation of fuel is governed by European Union law as set out in Directive 2003/96/EC, commonly known as the Energy Tax Directive (ETD). The ETD prescribes minimum tax rates for fuel with which all Member States must comply. The ETD also allows Member States to apply partial or full reliefs or reduced rates of tax to biofuels produced from biomass. Biomass is defined as the biodegradable fraction of products, waste and residues from agriculture (including vegetable and animal substances), forestry and related industries, as well as the biodegradable fraction of industrial and municipal waste. The ETD provisions relating to fuels used for transport purposes are transposed into national law in Finance Act 1999. This law provides for the application of excise duty in the form of Mineral Oil Tax (MOT) to liquid fuels. It also provides for the application of MOT to gas used for propellant purposes.
MOT is comprised of a non-carbon component and a carbon component with the carbon component being commonly referred to as carbon tax. The non-carbon component of MOT is often referred to as “excise”, “fuel excise”, “fuel tax” or “fuel duty” but it is important to note that both components are excise. MOT law provides for a full relief from the carbon component of MOT for liquid or gaseous fuels that have been produced from biomass. This means that no carbon tax applies to biofuels, such as Hydrogenated/Hydrotreated Vegetable Oil or biomethane, used in any road vehicle, private or commercial. The table below lists the current MOT rates on petrol, auto-diesel and vehicle gas along with the effective MOT rates applicable to biofuels used in their place.
|
Fuel Type |
Non-carbon component of MOT |
Carbon component of MOT |
Total MOT (i.e. Non-carbon plus carbon) |
Effective MOT on biofuel (i.e. Non-carbon rate only) |
|
Petrol (per 1,000 litres) |
€419.89 |
€112.23 |
€532.12 |
€419.89 |
|
Auto-diesel (per 1,000 litres) |
€336.29 |
€129.81 |
€466.10 |
€336.29 |
|
Biogas (per megawatt hour) |
€0.59 |
€8.77 |
€9.36 |
€0.59 |
Where a fuel blend contains biofuel, the carbon tax relief applies to the portion that is produced from biomass. Regarding hydrogen, its use in hydrogen fuel cells to power vehicles is outside the scope of MOT, i.e., such use is not subject to taxation.
The carbon tax relief for biofuels is intended to promote a higher level of biofuel usage and supports the Government’s commitment to incentivising more environmentally friendly alternatives to fossil fuels. As the carbon component of MOT is fully relieved for biofuels, these types of fuels are not impacted by the ten-year trajectory of carbon tax increases which was introduced in Finance Act 2020. This means that, as annual increases in the carbon component of MOT are implemented, the differential in tax costs between biofuels and fossil fuels will continue to widen, further incentivising the uptake of biofuels.
253. Deputy Róisín Shortall asked the Minister for Finance if he will respond to matters raised in correspondence regarding mortgage protection (details supplied); if the person applying for mortgage protection in this case may be facing discrimination on health grounds; if his Department will issue any additional guidance in relation to the rights of the person in this case; and if he will make a statement on the matter. [29692/23]
View answerI note that the question relates to an individual application for mortgage protection insurance. As the Deputy will appreciate, I am unable to comment on individual cases.
Moreover, neither I, nor the Central Bank of Ireland, can intervene in the provision or pricing of insurance products. This position is reinforced by the EU framework for insurance companies (the Solvency II Directive).
Notwithstanding the above, I am aware of the issue of access to financial services – including mortgage protection insurance – for individuals with historic or underlying health conditions. This is a very sensitive matter for many in our community.
It is my understanding that generally insurers use a combination of actuarial factors in making their individual decisions on whether to offer life cover and what terms to apply. These can include: age; health; family medical history; occupation; and lifestyle. In addition, these may be determined or linked to the policy duration. In the case of mortgage protection policies, these tend to be over the lifetime of the repayment schedule. In addition, my understanding is that different insurers do not use the same combination of factors. Accordingly, the cost and availability of cover varies across the market, and will be priced in accordance with firms’ prior claims experience.
In order to assist clients who have had difficulty acquiring life cover due to a pre-existing illness or condition, Brokers Ireland has published a register containing contact details of brokerages who have experience in advising on life cover in this area. This is available on its website: brokersireland.ie/life-cover-pre-existing-illnesses/. In addition, Insurance Ireland operates an Insurance Information Service for those who have queries, complaints or difficulties in relation to obtaining insurance, which can be accessed by ringing 01-676-1820 or at feedback@insuranceireland.eu.
Furthermore, with regard to mortgage protection insurance and home ownership, under Section 126 of the Consumer Credit Act 1995, lenders can provide a mortgage in situations where a borrower may be unable to obtain life insurance, or where such insurance is unduly costly compared to that payable by borrowers generally. For individuals, including those with historic or underlying health conditions, who may experience difficulties acquiring mortgage protection insurance when securing a home loan, this is also an important provision to be aware of.
Finally, consumers who feel they have been treated unfairly by any financial service provider, including an insurer, can make a complaint to the Financial Services and Pensions Ombudsman (FSPO). The FSPO is a statutory official who acts as an independent arbiter of disputes which consumers may have with their insurance company or other financial service provider. The FSPO can be contacted either by email at info@fspo.ie or by telephone at 01-567-7000. Investigations by the FSPO are free of charge to the complainant.
254. Deputy Paul Kehoe asked the Minister for Finance if the deposit return scheme will be subject to VAT; and if he will make a statement on the matter. [29710/23]
View answerAs the Deputy will be aware the planned ‘go-live’ date for the operation of the Deposit Return Scheme (DRS) is February 2024.
The appropriate VAT treatment for the scheme has been considered and discussed with the European Commission. I intend to amend the VAT Consolidation Act 2010 in Finance Bill (no.2) 2023 to set out the operating principles of the scheme along with a Regulation, which will set out the detail.
The intention is for only the first taxable person in a supply chain charging a DRS deposit to have to account for VAT on unredeemed deposits. No other businesses further along the supply chain, such as wholesalers and retailers, will account for VAT on deposits at any point. Producers will calculate the VAT due on unreturned deposits based on their total DRS sales less DRS returns.
This non-taxation approach is in line with the VAT Directive and with the principles of the proposed Deposit and Return Scheme.
255. Deputy Louise O'Reilly asked the Minister for Finance the steps that are being taken, domestically and at EU level, to ensure that public access to the register of beneficial is restored; and if he will make a statement on the matter. [29794/23]
View answerIn November 2022 the Court of Justice of the European Union ruled, in Joined Cases C-37/20 and C-601/20, that a provision of the EU anti-money-laundering directive, under which information on the beneficial ownership of corporate and other legal entities, held in central registers, must be provided to the general public, is invalid. The Court found that the provision interfered with the rights recognised in Articles 7 and 8 of the Charter of Fundamental Rights of the European Union.
Therefore access for the public must now be on the basis of the previous version of that Directive, meaning on the basis of having a legitimate interest.
Following receipt of legal advice from the Office of the Attorney General and in order to ensure our domestic legislation complies with the Court’s ruling, a Statutory Instrument was prepared amending Regulations which govern two of Ireland’s registers of beneficial ownership information - the Register of Beneficial Ownership of Companies and Industrial & Provident Societies (RBO), which operates under the auspices of the Department of Enterprise, Trade and Employment; and the Central Register of Beneficial Ownership of Irish Collective Asset-management Vehicles, Credit Unions and Unit Trusts, which is operated by the Central Bank of Ireland. I have now signed this Statutory Instrument (S.I.) into law as S.I. 308 of 2023, the European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) (Amendment) Regulations 2023.
The central feature of this Statutory Instrument is an amendment of Regulation 25 (3) of S.I. 110 of 2019, such that access to the two Registers referenced above can be provided to persons who have - and can demonstrate - a "legitimate interest", in accordance with the Court’s judgement. Legitimate interest will be determined in line with what is already provided for in Regulation 27(4) of S.I. No. 194/2021, which established the Central Register of Beneficial Ownership of Trusts (which is not affected by the court ruling). In summary, the requester would have to justify access, to the Registrar, by demonstrating that the requester is engaged in the prevention, detection or investigation of money laundering and/or terrorist financing offences. In addition, the person must demonstrate that the entity which is the subject of the access request is connected with persons convicted (whether in the State or elsewhere) of an offence consisting of money laundering or terrorist financing, or that the entity holds assets in a high-risk third country.
At EU level, new anti-money laundering legislation is still being negotiated, following its publication by the European Commission in July 2021. On 7 December 2022, the Council of the European Union agreed its position on two parts of this package - a new EU Directive and EU Regulation - and published its mandate for negotiations with the European Parliament (the Council had previously agreed its position on the other elements of the draft package). It can be seen from this mandate that the Council proposes that provision for access to beneficial ownership information, by the public, should be on the basis of ‘legitimate interest’. Negotiation of this draft legislation with the European Parliament is currently underway and agreement is expected to be reached during 2023.
Further amendments to domestic legislation in this regard may be required as part of the transposition process, once that new legislation is agreed.
256. Deputy Damien English asked the Minister for Finance to provide a report on the Ministerial Trade Visit to Money2020 Europe 2023 in Amsterdam; the way in which he supported the IDA and Enterprise Ireland to achieve their objectives on this visit; and if he will make a statement on the matter. [29817/23]
View answerThe Minister of State for Financial Services, Credit Unions and Insurance Dr Jennifer Carroll MacNeill attended Money 2020 in Amsterdam on Wednesday 7 June as part of a trade mission. The itinerary was developed by Enterprise Ireland and IDA Ireland. Money 2020 is the largest global fintech event attended by over 7,000 from the fintech community, including multinational companies, banking, investors, and start-up companies from across the world.
There were several engagements throughout the day. Firstly there were engagements with exhibiting Enterprise Ireland client companies. They included Transfermate, Daon, Assure Hedge, Currencyfair, Know Your Customer and Fenergo.
A meeting was held with the Netherlands Foreign Investment Agency (NFIA) and its sister agencies, Innovation Quarter, Amsterdam in Business and Holland Fintech. Areas of discussion included the topics of common interest between the Netherlands and Ireland and the opportunities for Irish financial services companies to grow in the Netherlands.
A roundtable luncheon was held entitled ‘The future of regulation within the financial services industry and evolution of technology’. A variety of organisations attended including Enterprise Ireland, IDA Ireland, Leaders in Finance, De Nederlandsche Bank and companies including Corlytics, Fenergo, ID-Pal, Know your Customer, DigiTrust, CM.com, Lelieveldt and ING Bank. The topics discussed were rules based versus risk based approach to regulation and corporate transparency versus privacy.
Meetings were held between the Minister of State and representatives from IDA Ireland client companies and target companies. These meeting were important engagements in helping to highlight the significance of the financial services sector in Ireland and the importance of foreign direct investment to the economy.
The Minister of State also attended the Enterprise Ireland Client-Buyer Networking Canal Cruise which was attended by Enterprise Ireland companies, Dutch and EU buyers, and partners.
This trade mission was an important part of the implementation of the Update to Ireland for Finance strategy, in particular Theme 4: Regionalisation and Promotion. Part of this theme aims to maximise the potential that events like Money 2020 represent for international promotion of the international financial services sector to investors, individuals and companies.
The objectives for Enterprise Ireland included to promote Irish fintech companies on a global scale and to raise awareness of the breadth of Ireland’s financial services offering. The objectives for IDA Ireland were to promote Ireland as a world class investment location for international financial services companies and to continue to demonstrate the capacity of Ireland for investment from this sector in a post-Brexit and post-Covid environment.
The feedback received from Enterprise Ireland and IDA Ireland has been very positive in terms of the Minister of State’s participation and promotion of Irish fintech companies and the promotion of Ireland as a location for international financial services companies.
257. Deputy Damien English asked the Minister for Finance his views on Ireland’s bid to host the new EU AML Authority; if Ireland having a strong AML, legal and administrative framework will assist in this bid; the next steps that will be taken in order to advance Ireland’s bid; and if he will make a statement on the matter. [29818/23]
View answerThe new EU Anti Money Laundering Authority - AMLA - will be established on foot of an EU Regulation that was published in July 2021 and expected to be adopted later this year. AMLA will be a significant EU institution, tasked with supervision - either directly, or indirectly - of obliged entities in the financial services sector in the first instance and eventually, those in the non-financial sector. The supervision will be in respect of the entities' compliance with EU anti money laundering and countering the financing of terrorism ("AML/CFT") rules and standards. In effect, it will oversee implementation of the forthcoming EU "single rulebook" on AML/CFT matters and is expected to provide harmonised guidance and regulatory technical standards to national supervisors, such as the Central Bank of Ireland. For it to have full authority in these matters, it will take over the AML/CFT competences from the European Banking Authority.
On 24 March, the Government decided to signal Ireland's interest in hosting the new EU Anti Money Laundering Authority, "AMLA". Nine other countries are also bidding - France, Germany, Belgium, Luxembourg, Latvia, Lithuania, Spain, Italy and Austria - and others may yet do so.
AMLA was due to be established in January this year, but the decision about the host location has been delayed, as a new framework has to be developed in relation to the selection criteria and selection processes to be effected when the EU is establishing new EU institutions, beginning with AMLA. Following an ECJ ruling in July 2022, there is now a greater role for the EU Parliament in the selection process and settling on an agreed framework, between the EU Council and Parliament, is taking some time. Nevertheless, the indications are that the process will conclude this year. We have a good sense of what many of the criteria for selection of the host country will be, including that AMLA should be able to establish immediately, in the host country and do so with full independence; it should have access to a skilled labour force in the country; there should be appropriate social welfare, educational and medical care for AMLA staff and their spouses and children; there should be adequate training opportunities in AML/CFT matters; and there should be a balanced geographic spread of EU institutions across the entire of the EU.
The EU Parliament is keen that an added consideration, in terms of deciding on the host country, should be its AML/CFT framework, but there is no consensus on this yet. However, if our AML/CFT framework is to be scrutinised, I am confident we will not be found wanting, as it is robust and last year, the Financial Action Task Force, which is the global standard setter in all matters AML/CFT-related, noted the "significant progress" made by Ireland in strengthening its framework over the last few years.
While we await the final criteria in relation to the selection process, my officials have been preparing the groundwork for Ireland's formal bid, compiling the information that will likely be sought by the EU co-legislators tasked with assessing Member States' applications. Officials have also collaborated closely with our embassies, reaching out to counterparts at official level across the EU, to highlight the benefits of locating AMLA in Ireland and seeking their support for our bid. Underpinning all of those efforts, has been a significant volume of information and advice provided by many Government Departments, agencies, semi-State agencies and the private sector, all of whom have been highly supportive of the proposal to host AMLA here. That work is ongoing.
I believe Ireland is a great location for this important new EU authority. We have a significant financial services sector, built over decades, that will be subject to AMLA’s direction and the new single rulebook. Within that sector, there is good AML/CFT compliance as we have a robust framework which will be further enhanced by this new agency. Hosting it here will only add to Ireland’s and the EU’s compliance with international standards.
258. Deputy Damien English asked the Minister for Finance to detail the progress of the Office to Promote Competition in the Insurance Market as it continues to work to help to attract new entrants into the Irish market; and if he will make a statement on the matter. [29819/23]
View answerInsurance reform is a key priority for this Government as evidenced through the implementation of the Action Plan on Insurance Reform as overseen by a specific Cabinet Committee Sub-Group chaired by the Tánaiste. The latest Implementation Report demonstrates that significant progress has been made, with 90 per cent of the actions contained in the Action Plan now being delivered or initiated.
The establishment of the Office to Promote Competition in the Insurance Market in December 2020 was a Programme for Government commitment. Its aims are to help expand the risk appetite of existing insurers and explore opportunities for new market entrants, thus increasing the availability of insurance. The Office, chaired by Minister of State Carroll MacNeill, includes officials from my Department as well as the Department of Enterprise, Trade and Employment.
Since its establishment, the Office has conducted intensive and ongoing engagement with a range of stakeholders, including insurance companies and representative organisations. As part of this, the Office is working closely with IDA Ireland to help leverage the ongoing reforms with the objective of targeting new entrants to the Irish market, or persuading current incumbents to expand their risk appetite. This will, in the first instance, target providers who offer insurance in areas which have been identified as ‘pinch-points’ in the Irish market, such as high-footfall/activity sectors having difficulty in obtaining public liability insurance.
The Office has had success in assisting to remove ‘pinch points’ in the insurance market, with various solutions found for a variety of sectors including childcare, equestrian and inflatable hire. In addition, there have been announcements from new entrants to the market, as well as commitments by existing insurers that they will expand their risk appetite to cover new areas, particularly in the SME space. This is a welcome development and I am hopeful that sectors currently experiencing issues with the availability of insurance will be positively impacted.
Upcoming developments, such as the reform of the “common Duty of Care” (via amendments to the Occupiers’ Liability Act 1995), will further enhance the insurance market by addressing the issue of ‘slips, trips and falls’ which is particularly prevalent in high-risk public-facing sectors.
I wish to assure the Deputies of my intention to continue to work closely with my Government colleagues to ensure further implementation of the Action Plan which, in tandem with the work of the Office to Promote Competition, should have a positive impact on the affordability and availability of insurance for all consumers.
259. Deputy Damien English asked the Minister for Finance the extent of the domestic financial services and the international financial services sectors in Ireland in terms of the number of people employed and the value to the Exchequer by way of corporation taxation; his views on the future growth of both these sectors in Ireland; and if he will make a statement on the matter. [29820/23]
View answerOverall, the financial sector accounted for some €2.7 billion of corporation tax receipts in 2022. This was around 12 per cent of the corporation tax yield. According to the CSO, corporate taxes paid by the financial sector were split broadly equally between domestic (48 per cent) and foreign owned (52 per cent) financial corporates in 2021. A breakdown of the financial sectors corporation tax receipts for 2022 is not yet available from the CSO.
The domestic economy is poised to grow at a robust pace this year, with the pace of growth expected to pick-up over the course of the summer as inflation continues to ease. The financial services sector will have an important role to play in ensuring the resilience of this growth, by enabling broad based and sustainable investment across the domestic economy. This role takes on particular significance given the rapid tightening of monetary policy over recent months, and the greater financing burden faced by both businesses and households.
In relation to the international financial services sector specifically, the current estimate from the enterprise agencies IDA Ireland and Enterprise Ireland is that direct employment in this sector stood at around 56,000 at the end of 2022. This is an increase of over 3,000 in the numbers employed compared to the end of 2021. In addition to these high-value jobs, there are many more thousands of people who are employed indirectly in professional services for which the international financial services sector generates a demand.
Ireland for Finance is the whole-of-Government strategy for the further development of Ireland’s international financial services sector. The Update to Ireland for Finance was launched in October 2022 and its vision is for Ireland to continue to be a top-tier location of choice for specialist international financial services and to enhance and protect our future competitiveness. The employment target of the updated strategy is to achieve a further net increase of 5,000 people in direct employment in the international financial services sector (above the target set out in the previous iteration of the Ireland for Finance strategy). This target applies for the period of the updated strategy, from January 2023 to December 2026.
The nature, scale and complexity of Ireland’s international financial services sector is changing and will continue to change in a number of ways as a result of the financial services investments won in recent years, including both firms relocating from the UK following Brexit and firms looking to set up operations in the EU for the first time. The industry in Ireland has become broader and more diverse with more firms carrying out a greater range of regulated activities than at any time.
260. Deputy Damien English asked the Minister for Finance for an update on credit union mortgage-lending in the State; the plans he has to assist credit unions in reaching an increased number of first-time home buyers with their mortgage offering; and if he will make a statement on the matter. [29821/23]
View answerI thank the Deputy for his question.
As of March 2023 the total credit union mortgage book amounted to approximately €364 million. The average credit union mortgage is approximately €100,000. Mortgage lending in the sector is up 26.6% year on year to March 2023 and this growth demonstrates that there is demand for credit union mortgages.
Credit union mortgage lending is fragmented with 20 mainly industrial credit unions accounting for approximately 75% of mortgage lending. Credit unions with over €50 million in assets and reserves greater than 12.5% can notify the Central Bank that they intend to use a higher 10% combined mortgage and SME lending limit.
I believe that credit unions can help the entire mortgage market and fulfil a significant role nationally through increased collaboration and the creation of a compelling mortgage product offering.
Such a product could benefit from standardisation of rates and nationwide advertising.
I am currently aware that a number of stakeholders are currently working on a mortgage Credit Union Service Organisation (CUSO). The future strength of the credit union movement is dependent on its ability to work together to develop new and compelling products and services for its members.
Finally, enabling provisions contained in the Credit Union (Amendment) Bill, such as allowing for member referral and the establishment of corporate credit unions, will further help credit unions provide a product for first-time home buyers.
261. Deputy Damien English asked the Minister for Finance for an update on credit union SME lending in the State; the plans he has to assist credit unions in reaching an increased number of SMEs with their lending offering; and if he will make a statement on the matter. [29822/23]
View answerI thank the Deputy for his question.
This Government is encouraged by the growth in credit union SME lending to date. In total, SME lending has grown 12.4 % year on year to the end of March 2023.
Credit unions with over €50 million in assets and reserves greater than 12.5% can notify the Central Bank that they intend to use a 10% combined SME and mortgage lending limit.
A number of enabling provisions in the Credit Union (Amendment) Bill, such as allowing for member referral and the establishment of corporate credit unions, will help future-proof and strengthen the sector for the years ahead. The Bill is currently progressing through the Oireachtas.
The introduction of corporate credit unions and member referral, should support greater collaboration between credit unions, facilitating a sharing of resources and greater access to funding for SMEs. While member referral is not mandatory, it is a new option for making additional services available to members who can't access a service in their credit union.
