Dáil Éireann Debate, Wednesday - 27 April 2005
179 Mr. Durkan asked the Minister for Finance if he has satisfied himself that banking legislation is sufficiently up to date to withstand abuses which could lead to destabilising or undermining the banking system; and if he will make a statement on the matter. [13699/05]
Amharc ar fhreagraThe Central Bank and Financial Services Authority of Ireland Act 2003 established the Irish Financial Services Regulatory Authority. The Central Bank and Financial Services Authority of Ireland Act 2004 complemented the 2003 Act, further enhanced the financial regulator's powers and strengthened the regulatory environment. This Act conferred new powers on the financial regulator to impose stiff administrative penalties, to be applied where there is a breach of: any financial services legislation; codes of conduct issued by the regulator; any condition, requirement or direction imposed under legislation or codes.
As far as consumer protection is concerned, the post of consumer director is specifically provided for within the structure of the financial regulator established under the 2003 Act. The director exercises important consumer protection powers under legislation. The 2004 Act provided for an enhanced structure for dealing with consumers who have complaints about financial institutions and also provides consumer and industry consultative panels for the financial regulator. The consumer panel will have an important role in ensuring that the regulator is correctly reflecting the interests of consumers in its protective, that is, issue of codes of conduct, and educational, that is, information pamphlets and so forth, roles. The Act also established a single statutory financial services ombudsman for all financial services firms.
In addition to the specific regulatory requirements under the Central Bank and consumer credit legislation, credit institutions are also subject to specific requirements to know their customers, keep records and report suspicions of money laundering under criminal justice legislation. Their professional advisers, such as accountants and solicitors, are also subject to these reporting requirements. All companies are subject to the enhanced company law regime that has been put in place in recent years, including the oversight role of the Director of Corporate Enforcement.
I am satisfied that the provisions now available in law provide not just for the effective regulation of the way that credit institutions conduct their business but also for effective supervision and enforcement of the law where necessary. I am open to making suitable amendments to the law, if the need arises. The forthcoming Bill to consolidate and modernise our financial services legislation could offer a suitable vehicle for such amendments.
180 Mr. Durkan asked the Minister for Finance if he has had discussions with his European colleagues with a view to coordinating efforts to deter money laundering or criminality in the banking system; and if he will make a statement on the matter. [13700/05]
Amharc ar fhreagraThere is strong co-ordination of measures to deter money laundering and criminality in the banking sector at EU level. A third money laundering directive is under consideration within the EU. It received political agreement from Finance Ministers last December and is currently before the European Parliament. I understand that the Luxembourg Presidency hopes to have final agreement on the directive before end June. This process will include adoption of the final text at a forthcoming Council of Ministers meeting.
The third money laundering directive will replace and update the 1991 and 2001 money laundering directives which imposed obligations on financial institutions and, more recently, on lawyers, accountants and auctioneers to identify their clients and report suspicious transactions to the police authorities. The new directive reflects the 2003 revision of the recommendations of the financial action task force on money laundering, FATF, the main international anti-money laundering organisation.
One of the directive's central features is to considerably strengthen the obligation on financial institutions, and others, to identify the beneficial ownership of legal entities. It will also impose an obligation on financial institutions and others to pay particular attention to "politically exposed persons" from other member states and from third countries. The directive also brings terrorist funding into the money laundering framework and introduces the concept of a risk based approach to the implementation of its requirements. If agreed, the directive will require amendment of our domestic legislation regarding money laundering.
The issues of money laundering and criminality generally are, of course, also regularly discussed at the Justice and Home Affairs, JHA, Council of the EU and a report on progress in the implementation of the framework decision of 26 June 2001 on money laundering, the identification, tracing, freezing, seizing and confiscation of instrumentalities and the proceeds of crime, is due to be submitted by the commission to the JHA council by 30 June of this year. Ireland also participates fully in work to ensure that the EU legal frameworks are adapted to the FATF's special recommendations on terrorist financing.
181 Mr. Durkan asked the Minister for Finance if he has issued guidelines or instructions to banks, building societies or other institutions with a view to combating credit card fraud; and if he will make a statement on the matter. [13701/05]
Amharc ar fhreagraCredit card fraud is primarily a criminal justice matter and, as such, combating credit card fraud does not fall within the remit of my Department. The detection and prevention of credit card fraud is treated very seriously by the financial services industry and by the Garda Síochána. I understand that regular meetings are held between the industry and the Garda to exchange information and co-ordinate efforts to combat fraud.
The financial regulator also monitors developments in this area in view of the potential consequences of card fraud for consumers and has provided advice to consumers on this issue through a fact sheet issued under the "It's Your Money" initiative.
