Dáil Éireann díospóireacht -
Thursday, 26 Oct 2000

Vol. 525 No. 1

Written Answers. - Banking Regulations.

Róisín Shortall

Ceist:

123 Ms Shortall asked the Minister for Finance if his attention has been drawn to the difficulties being experienced by many young people in disadvantaged communities in opening their first bank accounts caused by the requirement to produce a driving licence or passport; if his attention has further being drawn to the difficulties for facilitators of social employment schemes in administering such schemes because of these difficulties; if he will amend legislation to allow other less costly forms of identification such as social welfare documentation or an age card to be used; and if he will make a statement on the matter. [23754/00]

Minister for Finance (Mr. McCreevy)

The guidance notes issued by the money laundering steering committee, used by financial institutions, are in the process of being reviewed and the operation of customer identification procedures, including the issue of difficulties being experienced by particular social groups, will be examined as part of this process. I have also asked the Central Bank, which is the regulatory authority for the sector, to discuss the specific difficulties raised by the Deputy with the Irish Bankers' Federation and to communicate directly with the Deputy in this context.

The Criminal Justice Act, 1994, implements the EU Money Laundering Directive in Ireland. Section 32 of the Act provides, inter alia, that a financial institution “shall take reasonable measures to establish the identity of any person for whom it proposes to provide a service”. It is the legal responsibility of each financial institution to ensure that it complies with this provision. The Act does not state what may or may not represent reasonable measures and does not provide for the making of regulations in this regard.

In order to facilitate consistent implementation of the anti-money laundering provisions of the Criminal Justice Act, 1994, guidance notes were issued in May 1995 by the money laundering steering committee, established under the aegis of my Department and representing the various sectors of the financial services industry and the relevant regulatory authorities. These guidance notes recommend that a customer's identity be verified by reference to a document obtained from a reputable source which bears a photograph and signature. The guidance notes state, however, that it may be reasonable to depart from recommended verification procedures in certain circumstances, for example, when the young or the elderly may not be able to provide the documentary evidence of identity which is required of other customers. With regard specifically to young people-students, verification of identity may be obtained from other sources such as a home address of parent(s), school-college authorities or simply, as it is normal procedure for minors to be introduced to a financial institution by a family member-guardian who has an existing relationship with the institution concerned, such an introduction may be relied upon as satisfactorily establishing identity. It is a matter for an institution's management to determine the type of evidence which they are prepared to accept in such cases in order to meet their legal obligations under the Criminal Justice Act, 1994.