Dáil Éireann Debate, Tuesday - 7 November 2023
329. Deputy Ged Nash asked the Minister for Finance to confirm how many enforcement actions the Central Bank has taken against Russian individuals or entities who are on the EU sanctions list since the current sanctions regime became operational in 2022, and who have a presence in the Irish financial services system vis a vis ‘Section 110’ Special Purpose Vehicles; how many live investigations are ongoing; and if he will make a statement on the matter. [48377/23]
View answerThe Deputy may wish to note that EU sanctions have direct effect in all Member States of the EU, and they are legally binding on all natural and legal persons. As such, a natural or legal person who contravenes a provision of an EU sanctions regulation would be guilty of an offence and liable to prosecution.
The Central Bank of Ireland is one of three Competent Authorities in Ireland tasked with the administration and enforcement of restrictive measures - tasked with the administration and enforcement of restrictive measures the others being the Department of Foreign Affairs and the Department of Enterprise Trade and Employment.
The Central Bank is responsible for the administration and enforcement of financial sanctions. In administering financial sanctions, the Central Bank undertakes the following:
• Receives notifications from the financial services industry of assets/funds that have been frozen under the sanctions legislation. In this regard, all natural and legal persons, entities and bodies are required to report information to the Central Bank on assets held by them on behalf of individuals or entities that are subject to the asset freeze. The Central Bank collates the reports of frozen assets for onward transmission to the Department of Foreign Affairs and the EU Commission.
• Assesses applications for derogations that are permitted under the restrictive measures legislation, such as Regulation 269/2014, in respect of financial sanctions.
• Engages with the other domestic Competent Authorities and the European Commission to ensure that restrictive measures and financial sanctions are being implemented correctly and consistently.
With respect to the EU’s implementation of sanctions, following Russia’s unjust and illegal invasion of the Ukraine in February of 2022, the Central Bank wrote to Special Purpose Entities (SPEs) with potential Russian links seeking confirmation of their adherence to the sanctions. The Central Bank engaged further with these identified firms to seek confirmation of the specific steps they had taken to ensure compliance with financial sanctions and restrictive measures while reminding them of their ongoing obligations in this regard.
The Central Bank undertook an assessment of the information received and, based on that assessment, the Central Bank was satisfied that the identified SPEs had taken the necessary steps and had appropriate control frameworks in place to comply with the EU sanctions. The Central Bank did not uncover any actual or suspected breaches of EU sanctions in the course of this assessment. A breach of a financial sanction is a criminal offence under Irish legislation and, as a result, where the Central Bank is aware a breach has occurred or suspects a breach may occur, the matter is reported to An Garda Síochána.
In addition to the above assessment, since the implementation of sanctions relating to the Russian invasion of Ukraine, the Central Bank has significantly increased its engagement with the financial services sector in order to support and ensure compliance with the EU sanctions. This work includes:
• The Central Bank wrote to firms to notify them of the imposition of the Russia/Ukraine sanctions and provided firms with a link to our dedicated web page on these sanctions. Furthermore, we reminded firms of the necessity to have robust processes in place to comply fully with their sanctions obligations and mitigate the risk to their businesses posed by the sanctions. Following this initial communication, and as part of our ongoing supervisory engagements with regulated entities, there has been a significant focus on Russian/Ukrainian-related issues and sanctions compliance.
• The Central Bank has required a very significant number of firms to submit specific information on their control frameworks for restrictive measures and financial sanctions. The Bank is analysing the information provided by these firms to identify any potential issues. Where appropriate, the Bank will take actions with respect to any identified issues.
• The Central Bank continues to engage with the European Commission, our European peers, the two other Irish Competent Authorities and regulated entities to ensure that there is strong and ongoing awareness of, and focus on, the EU sanctions regime, combined with the need for firms to continue to effectively implement all EU sanctions.
• Continuous updating of the Central Bank web page dedicated to the sanctions related to the Russian invasion of Ukraine, and use of appropriate social media channels to ensure that regulated entities have access to up-to-date information on financial sanctions and restrictive measures as well as the Central Bank’s expectations in relation to compliance with these measures.
In addition to the communication and ongoing engagement with regulated entities, the Central Bank wrote to various representative bodies in the non-regulated sector to alert them to their obligations under the sanctions regulations and to remind them in particular of the obligation to freeze and report the assets of sanctioned individuals.
