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Tuesday, 18 Sep 2012

Written Answers Nos. 267-285

Motor Tax Collection

Ceisteanna (267)

Finian McGrath

Ceist:

267. Deputy Finian McGrath asked the Minister for Finance his views on a matter (details supplied) regarding vehicle registration tax. [38302/12]

Amharc ar fhreagra

Freagraí scríofa

Vehicles must be registered within 30 days of arriving in the State and an appointment for this purpose must be made with an NCTS Centre within 7 days of the vehicle arriving in the State. I am advised that while there are delays at the NCTS Centre Northpoint in relation to regular NCT vehicle testing, the average waiting time for a VRT inspection appointment is 5 days. Currently the waiting time is 1 day. In relation to payment options, I am advised that for security reasons only payments of €250 or less can be paid by cash. I am also advised that the standard guaranteed amount of €1,500 that may be paid by Laser card is set by the bank. I am advised that the issue of the limit amount on Debit cards is being discussed with the banks with a view to increasing the limit. The fee for the use of a credit card for the payment of VRT is an administrative fee to cover the costs of making such a facility available. Charges associated with a bank draft are a matter for the individual banks.

In many instances the amount of VRT payable is known prior to a visit to the NCTS Centre. In cases where it is not possible to determine the amount of VRT payment prior to inspection, the customer is advised of the amount due and can make the payment later without appointment.

Financial Services Regulation

Ceisteanna (268, 270, 271)

Pearse Doherty

Ceist:

268. Deputy Pearse Doherty asked the Minister for Finance the principal person or persons at an audit firm (details supplied) who was or were responsible for the audit of the financial statements for the year ended 30 September 2008, of the bank formerly known as Anglo Irish Bank which is now 100% owned by the State. [38304/12]

Amharc ar fhreagra

Pearse Doherty

Ceist:

270. Deputy Pearse Doherty asked the Minister for Finance the steps taken by the bank formerly known as Anglo Irish Bank to seek redress from an audit firm (details supplied) in respect of any failure to identify irregularities in the financial statements for the year ended 30 September 2008. [38306/12]

Amharc ar fhreagra

Pearse Doherty

Ceist:

271. Deputy Pearse Doherty asked the Minister for Finance the steps taken by him or agencies acting under his aegis to seek redress from auditors (details supplied) in respect of any failure to identify irregularities in the financial statements for Anglo Irish Bank. [38307/12]

Amharc ar fhreagra

Freagraí scríofa

I propose to take Questions Nos. 268, 270 and 271 together.

As the Deputy is aware the company referred to in the question, chartered accountants and registered auditors, conducted the audits of the relevant financial statements of Anglo Irish Bank Corporation for the year ended 30 September 2008. I have been informed that the bank is not in a position to positively identify all the principal persons at that company who were responsible for the conduct of the audit.

The Deputy will be aware that the Chartered Accountants Regulatory Board (CARB) appointed Mr John Purcell to conduct an independent enquiry into certain matters relating to their conduct as auditors of Anglo. The Statement issued by CARB following his investigation is attached. Mr Purcell also carried out an investigation into the conduct of Mr Sean Fitzpatrick, Mr William McAteer and Mr David Drumm, all officers of Anglo and members of CAI. The Statement issued following the investigation is attached.

In all cases Mr Purcell concluded there was a prima facie case. The next step in the process is for CARB to hold public Disciplinary Tribunals. However, these have been stayed following a request from the DPP who was concerned that the CARB prosecution of any of these cases could prejudice the criminal enquiry against the individuals or the firm named above arising from the various investigations carried out by the Garda and Regulatory Authorities.

The bank has also advised me that it is actively investigating all legacy issues with a view to taking appropriate action to resolve such issues. Due to the sensitive nature of those issues, it would be inappropriate for the bank to comment further on the subject matter of the question at this time.

Statement issued in accordance with Bye-Law 19.8 of the Disciplinary Bye-Laws of Chartered Accountants Ireland by the Complaints Committee of the Chartered Accounts Regulatory Board (CARB)

A meeting of CARB’s Complaints Committee took place on 13th September 2011 at which the Report of Special Investigator, Mr John Purcell, concerning his investigation into Institute Member firm, Ernst & Young, in respect of their former role as auditors to Anglo Irish Bank, was considered.

In his Report to the Complaints Committee, Mr Purcell certified that, in his opinion, there existed certain prima facie cases against the member firm.

The Complaints Committee referred those prima facie cases to CARB’s Disciplinary Panel by way of Formal Complaints under the provisions of Bye-Law 19.6 of the Disciplinary Bye-Laws of Chartered Accounts Ireland.

The Special Investigator certified that in his opinion there were prima facie cases against Ernst & Young in respect of their role as auditors to Anglo Irish Bank in respect of the following:

1. Their failure to detect the scale of Mr Sean FitzPatrick’s loans and their systematic refinancing over year ends and the lack of appropriate disclosure in the first set of Anglo’s Financial Statements for the year end 30th September 2008, which were signed on 2nd December 2008, or in Ernst & Young’s audit report thereon;

2. Their failure to refer to the transactions in September 2008 between Irish Life & Permanent and Anglo in their audit report on the first set of Anglo’s 2008 Financial Statements, in the absence of appropriate disclosure in those 2008 Financial Statements;

3. Their failure to ensure appropriate disclosure of a loan made to Mr William McAteer, a Director of Anglo, in the first set of Anglo’s 2008 Financial Statements or in their audit report thereon.

The Special Investigator certified that in his opinion there was no prima facie against Ernst & Young in their role as auditors to Anglo Irish Bank in respect of the following:

1. The manner in which they dealt with the September 2008 transactions between Irish Life & Permanent and Anglo in their audit report on the second set of Anglo’s 2008 Financial Statements, which were signed on 19th February 2009;

2. Their lack of awareness of the so-called “Maple 10 loans” when they issued their audit report on the fist set of Anglo’s 2008 Financial Statements;

3. The manner in which they deal with the so-called “Maple 10 loans” in their audit report on the second set of Anglo’s 2008 Financial Statements;

4. Their lack of awareness of the alteration of recourse terms on certain loans to four key management personnel of Anglo when Ernst & Young issued their audit report on the first set of Anglo’s 2008 Financial Statements.

For more information contact:

Paul Daly

Communications Executive,

Chartered Accountants Regulatory Board.

Ph: 087-2235187

E: paul.daly@carb.ie

Statement by the CARB Complaints Committee regarding the report of the special investigator

Statement issued in Accordance with Bye-Law 72.8 of the Bye-Laws of Chartered Accountants Ireland by the Complaints Committee of the Chartered Accountants Regulatory Board (CARB)

A meeting of CARB’s Complaints Committee took place on 14 December 2010 at which four Reports of Special Investigator, Mr John Purcell, were presented. In his Reports to the Complaints Committee, Mr Purcell certified that, in his opinion, there existed certain prima facie cases that Institute members, Mr David Drumm, Mr Sean FitzPatrick, Mr William McAteer and Mr Peter Fitzpatrick, were liable to disciplinary action under the Buy-Laws of Chartered Accountants Ireland.

The Complaints Committee referred those prima facie cases to CARB’s Disciplinary Committee by way of Formal Complaints under the provisions of Bye-Law 72.6 of the Bye-Laws of Chartered Accountants Ireland.

The prima facie cases certified by the Special Investigator in relation to each member as follows:

Mr David Drumm

The Special Investigator certified that in his opinion there was a prima facie case in respect of the following:

1. His role in relation to the temporary transfer of loans of Mr Sean FitzPatrick and their non disclosure in the financial statement of Anglo Irish Bank.

2. His role in relation to the transactions between Anglo Irish Bank and Irish Life and Permanent plc at key reporting dates in 2008.

3. His role in relation to the amendment of the terms of the loans made to ten customers of Anglo Irish Bank Corporation Limited for the purchase of shares in Anglo Irish Bank.

4. His role in relation to certain loans made to four key management personnel.

5. His role in relation to a loan made to Mr William McAteer in 2008.

The Special Investigator certified that in his opinion there was no prima facie case in respect of the following:

1. His role in relation to the loans made to ten customers of Anglo Irish Bank for the purchase of shares in Anglo Irish Bank.

Mr Sean FitzPatrick

The Special Investigator certified that in his opinion there was a prima facie case in respect of the following:

1. His role in relation to the temporary transfer of his own loans and their non disclosure in the financial statement of Anglo Irish Bank.

2. His role in relation to the transactions between Anglo Irish Ban and Irish Life and Permanent plc at key reporting dates in 2008.

3. His role in relation to a loan made to Mr William McAteer in 2008.

The Special Investigator certified that in his opinion there was no prima facie case in respect of the following:

1. His role in relation to the loans made to ten customers of Anglo Irish Bank for the purchase of shares in Anglo Irish Bank.

Mr William McAteer

The Special Investigator certified that in his opinion there was a prima facie case in respect of the following:

1. His role in relation to the temporary transfer of loans of Mr Sean FitzPatrick and their non disclosure in the financial statement of Anglo Irish Bank.

2. His role in relation to the transactions between Anglo Irish Bank and Irish Life and Permanent plc at key reporting dates in 2008.

3. His role in relation to the appropriate disclosure of a loan made by Anglo Irish Bank to him in September 2008.

The Special Investigator certified that in his opinion that was no prima facie case in respect of the following:

1. His role in relation to the loans made to ten customers of Anglo Irish Bank for the purchase of shares in Anglo Irish Bank.

2. His role in relation to a loan made by Anglo Irish Bank to him in September 2008.

Mr Peter Fitzpatrick

The Special Investigator certified that in his opinion there was a prima facie case in respect of the following:

1. His role in relation to the transactions between Anglo Irish Bank and Irish Life and Permanent plc at key reporting dates in 2008.

For Enquiries contact paul.daly@carb.ie.ie or on 087-2235187

Financial Services Regulation

Ceisteanna (269)

Pearse Doherty

Ceist:

269. Deputy Pearse Doherty asked the Minister for Finance the principal person or persons at an audit firm (details supplied) who was or were responsible for the audit of the financial statements for the year ended 31 December 2008 at Irish Life and Permanent which is now 99% owned by the State. [38305/12]

Amharc ar fhreagra

Freagraí scríofa

I have been informed by PTSB that the partner in charge of the 2008 audit for the audit firm referred to in the question was Mr Alan Boyne and that he read the audit report to shareholders at the 2009 AGM. Mr Boyne led a multi-disciplinary team of professionals in completing the audit.

Questions Nos. 270 and 271 answered with Question No. 268.

Departmental Expenditure

Ceisteanna (272)

Pearse Doherty

Ceist:

272. Deputy Pearse Doherty asked the Minister for Finance if he will confirm the heading in the Exchequer statement to which the circa €32.5 million award in the case of a company (details supplied) and the Minister for the Environment, Community and Local Government, will be charged; if he will confirm the quantum of legal costs incurred to date by the State in this matter. [38308/12]

Amharc ar fhreagra

Freagraí scríofa

Issues from the Exchequer in respect of voted Department expenditure are shown in Note 4 of the Monthly Exchequer Statement. Information is at aggregate level only representing issues for supply services. The legal costs of the case are a matter for the Department of the Environment, Community and Local Government.

Departmental Legal Cases

Ceisteanna (273)

Pearse Doherty

Ceist:

273. Deputy Pearse Doherty asked the Minister for Finance following the judgment in the case of a company (details supplied) in respect of the Garda station on Harcourt Terrace, Dublin, the reason the completion notices served upon the State by the company and the Affordable Homes Partnership were not responded to as noted in the judgment. [38309/12]

Amharc ar fhreagra

Freagraí scríofa

As the Deputy may be aware, this is a matter for the Minister for the Environment, Community and Local Government and the Minister for Public Expenditure and Reform and, as such, I, as Minister for Finance have no role in this matter.

Exchequer Revenue

Ceisteanna (274)

Pearse Doherty

Ceist:

274. Deputy Pearse Doherty asked the Minister for Finance the amount raised for the Exchequer in residential house sale related stamp duty for each year from 2000 to date in 2012. [38348/12]

Amharc ar fhreagra

Freagraí scríofa

I am informed by the Revenue Commissioners that the available information on the yield from 2000 to date in 2012 from stamp duty on transfers of residential properties is set out in the following table.

Year

€m

2000

282

2001

265

2002

349

2003

528

2004

752

2005

945

2006

1,311

2007

1,018

2008

445

2009

150

2010

107

2011

50

2012 (to end July)

29 (Provisional)

It should be noted that 2001 was the first year for which stamp duty yield from property transfers could be broken down reasonably accurately between residential and non-residential property. The figure given for 2000 is an estimate.

Property Taxation Application

Ceisteanna (275)

Pearse Doherty

Ceist:

275. Deputy Pearse Doherty asked the Minister for Finance if stamp duty on residential homes will be abolished if a property tax is introduced. [38349/12]

Amharc ar fhreagra

Freagraí scríofa

The Government has no plans to abolish Stamp Duty on transfers of residential property. Stamp Duty on property co-existed with domestic rates before their abolition in 1978; and in many jurisdictions (including those with similar legal systems, such as the UK and the USA, and those with similar sized property markets, such as Denmark and the Netherlands) an annual residential property tax exists in conjunction with a transactions-based tax which operates in a similar manner to Stamp Duty. The Deputy will note that the rate of Stamp Duty on the vast majority of residential properties is 1% compared to a high of 9% as recently as 2010.

Question No. 276 answered with Question No. 188.

Tax Rebates

Ceisteanna (277)

Jack Wall

Ceist:

277. Deputy Jack Wall asked the Minister for Finance if a person (details supplied) in County Kildare is due a rebate on taxes paid and universal health charge; and if he will make a statement on the matter. [38385/12]

Amharc ar fhreagra

Freagraí scríofa

I am advised by the Revenue Commissioners that refunds of all income tax and income levy deducted were made to the person in question in February 2011. In addition, I should point out that the Department of Social Protection is responsible for refunding any health contributions deducted that may be due back.

Financial Services Regulation

Ceisteanna (278)

Shane Ross

Ceist:

278. Deputy Shane Ross asked the Minister for Finance if the State has ruled out compensating investors who have lost savings and pension contributions in the Customs House Capital debacle; if the State acknowledges a responsibility in this affair due to lack of adequate regulation by the Central Bank of Ireland; if it is open to any citizen to take an action against the Central Bank for negligence under any circumstances; if there is a ceiling on the compensation available to investors in this case; the number of investors that were affected; and if he will make a statement on the matter. [38426/12]

Amharc ar fhreagra

Freagraí scríofa

The compensation of investors is provided for in the Investor Compensation Act, 1998 and the investor compensation scheme is operated by the Investor Compensation Company Limited. The scheme is intended to help retail clients and does not cover institutions or professional clients. The Official Liquidator of Custom House Capital Limited is currently reconciling all client investments held through Custom House Capital Limited. This will be a lengthy and complex process. Until this reconciliation process is fully completed it will not be possible to quantify the extent of losses for each individual client. The Investor Compensation Company Limited (ICCL) operates the scheme that pays compensation where an authorised firm is unable due to financial circumstances to return money or investment instruments owed to a client. Investors will be compensated if they are eligible investors only. The limits to the amounts payable in compensation is 90% of the amount lost, subject to a maximum of 20,000 euro, to each eligible investor.

Custom House Capital Limited has approximately 1,500 clients, the majority of whom are resident in the State. Until the reconciliation process currently underway by the Official Liquidator is complete, it will not be possible to determine the number of investors affected. The Central Bank has advised that in July 2011, it received new information, previously unknown, which increased the Central Bank's concerns regarding the integrity of client investments managed by Custom House Capital Limited. The Central Bank then decided to impose further directions on the firm and in July 2011 to seek the appointment of High Court Inspectors to investigate the affairs of the firm.

No amount of skilled supervision or enhanced audit can absolutely guarantee that determined and deliberately concealed efforts to misuse client holdings can be prevented. Section 33AJ (2) of the Central Bank Act 1942 provides that the Central Bank can not be held liable for damages "for anything done or omitted in the performance or purported performance or exercise of any of its functions or powers, unless it is proved that the act or omission was in bad faith".

VAT Rate Application

Ceisteanna (279)

Patrick O'Donovan

Ceist:

279. Deputy Patrick O'Donovan asked the Minister for Finance if he will review the application of VAT on entrance fees to visitor farms for school tours. [38457/12]

Amharc ar fhreagra

Freagraí scríofa

Irish VAT law is subject to the provisions of the EU VAT Directive with which it must comply. Up to 31 December 2011 admissions to historic houses and gardens, and open farms were treated for VAT purposes as lettings and regarded as exempt from VAT. Having regard to certain decisions of the European Court of Justice, where a letting was defined for VAT purposes, it was decided that such admissions could no longer be treated as exempt lettings. As there are no other provisions in the VAT Directive that would allow an exemption from VAT on admissions to visitor farms, such admission became subject to VAT from 1 January 2012. Schedule 1 to the VAT Consolidation Act 2010 provides an exemption for the provision of children's or young people's education by educational establishments recognised by the State. This exemption does not extend to admissions to visitor farms for educational school tours. While admissions to visitor farms became liable to VAT from 1 January, provision was made in the Finance Act 2012 to ensure that such admissions apply at the 9% reduced rate of VAT and not the standard 23% VAT rate.

Departmental Staff Training

Ceisteanna (280)

Gerry Adams

Ceist:

280. Deputy Gerry Adams asked the Minister for Finance the amount of money spent on an annual basis on education and training of staff in 2011 and to date in 2012; the number of staff that availed of each course; if he will provide a list of the courses staff undertook and the cost of each course per person. [38485/12]

Amharc ar fhreagra

Freagraí scríofa

Having skilled and qualified people in place is essential for us to deliver on our Strategic Plan and our goals and objectives, and investing in Learning and Development is one of the key elements that will help to improve the performance of individuals, and the Department in the medium to long-term. In this regard, my Department is currently examining applications for refunds of fees for last year and prefund of fees for the current academic year. Courses undertaken should have relevance to the work of the Department, with particular reference to any skills or qualifications which have been identified as particularly relevant to the officer's current post and/or the need for particular skills or qualifications within the Department. Full details of the cost and the nature of the costs for 2011 and 2012 will be forwarded to the Deputy in due course.

Bank Guarantee Scheme Bond Repayments

Ceisteanna (281)

Pearse Doherty

Ceist:

281. Deputy Pearse Doherty asked the Minister for Finance in view of the recently published report and accounts for the Irish Bank Resolution Corporation for the six months ending June 2012, which state that IBRC will be wound down by 2020, if he will explain the way in which the operation of the Anglo-Irish Nationwide Building Society promissory notes will be affected, and specifically what will happen to the €12.1 billion of payments from him envisaged for the period 2021-2025. [38494/12]

Amharc ar fhreagra

Freagraí scríofa

The issue raised by the Deputy is a matter which requires consideration in the overall context of sourcing and providing the necessary capital for the effective life time of the bank. It is important in this context to be clear the recent interim accounts produced by the bank refer to "winding up of the loan book in an orderly manner by 2020" as opposed to a winding up of the bank. This difference is important for technical reasons and also to provide options as to how the overall cost of the bank can be settled in an appropriate timeframe. I can confirm that, under current arrangements, the scheduled payments on the Promissory Notes are due to continue until 2031.

NAMA Bonds

Ceisteanna (282)

Pearse Doherty

Ceist:

282. Deputy Pearse Doherty asked the Minister for Finance in view of the recently published report and accounts for the Irish Bank Resolution Corporation for the six months ending June 2012, which state that IBRC will be wound down by 2020, the way the clawback of any ultimate losses at the National Asset Management Agency pursuant to section 225 of the NAMA Act will be affected by this; and specifically the way NAMA will claw back any losses from IBRC in view of the fact that IBRC accounts for €44billion of the €74billion of loans acquired by NAMA, when section 225 of the NAMA Act provides for losses to be clawed back from participating institutions proportional to the value of loans originally acquired. [38495/12]

Amharc ar fhreagra

Freagraí scríofa

I am advised by NAMA that, earlier this year, its Board completed a review of its strategy and re-affirmed its expectation that NAMA remains on course to recoup for the taxpayer, at a minimum, the Senior Bonds issued as consideration for acquired loans, in addition to recovery of its carrying costs and the working and development capital expenditure it has advanced to debtors. Based on the Agency's record to date, I have no reason to doubt that the Agency will achieve its targets over its lifetime. In relation to Section 225 of the National Asset Management Agency Act 2009, the Deputy will be aware that a surcharge may be applied to the participating institutions only in the event of underlying losses being incurred by NAMA over its lifetime. The provision does not operate until the conclusion of NAMA's operations and the overall position of the taxpayer will be taken into account when considering the application of any surcharge.

As indicated in the answer to PQ 38494/12 the 2020 date referred to the winding up of the loan book not the winding up of the bank. At this stage, I would regard it as premature to speculate as to the respective dates on which NAMA and IBRC may be dissolved and on the mechanism by which a surcharge would be applied if IBRC were to be dissolved first. This is particularly the case given, as I have indicated above, that there is no reason to expect that it will be necessary to invoke Section 225 of the Act.

Bank Guarantee Scheme Bond Repayments

Ceisteanna (283, 284)

Pearse Doherty

Ceist:

283. Deputy Pearse Doherty asked the Minister for Finance the most recent projected ultimate outturn at the Irish Bank Resolution Corporation in which he is the sole shareholder; and if the management of IBRC still believes there will be a return of funds to the State. [38496/12]

Amharc ar fhreagra

Pearse Doherty

Ceist:

284. Deputy Pearse Doherty asked the Minister for Finance if the most recent projected ultimate outturn at the Irish Bank Resolution Corporation in which he is the sole shareholder takes account of the circa €13 billion in total lifetime interest that is currently payable on the €31 billion of promissory notes originally provided to IBRC. [38497/12]

Amharc ar fhreagra

Freagraí scríofa

I propose to take Questions Nos. 283 and 284 together.

The bank has informed me that the projected final net asset position for IBRC is considered both commercially sensitive and subject to material uncertainty given the current uncertainties in markets, the deterioration in asset values and the complexities, timescales and risks involved in deleveraging. Whilst significant progress has been made the final position will be driven by a number of variable factors against the assumptions in IBRC's wind down plan. These factors include actual recovery rates achieved for assets, the performance of the domestic and global economies, and the prevailing interest rates in Europe over the duration of the plan.

The bank's policy is that, due to the commercially sensitive nature of such information as noted above combined with the many external variables involved, it does not issue formal projections. However, the Bank's CEO has given an indication previously that the likely outcome for Anglo Irish Bank would be in the €25 - €28 billion region. The bank have informed me that since this time there have been a number of changes in market circumstance, the accelerated pace of asset disposal, and the acquisition of Irish Nationwide Building Society. While not issuing a revised projection as noted above, the bank remains of the view that there will be a small return to the State at full resolution, given the assumptions currently being used.

Further in relation to inclusion of interest in the projected ultimate outturn I have been advised that in calculating the projected final net asset position IBRC take into account interest from all assets including customers, securities and Promissory Notes.

EU Directives

Ceisteanna (285)

Pearse Doherty

Ceist:

285. Deputy Pearse Doherty asked the Minister for Finance further to the EU summit statement on 29 June 2012, which states similar cases will be treated equally, if he will set out the efforts that he has made to reverse the condition imposed on the State in July 2011, when a cut in interest rates on programme funding was made conditional on the State agreeing to participate constructively in the discussions on the common consolidated corporate tax base draft directive, CCCTB, and in the structured discussions on tax policy issues in the framework of the Euro+ Pact framework in view of the fact that the cut in interest rates in July 2011 on Portugal's programme funding was not conditional on any such potential concessions on tax arrangements. [38504/12]

Amharc ar fhreagra

Freagraí scríofa

As a committed member of the European Union Ireland always participates constructively in discussions at EU level as that is the only way to ensure that issues of concern to the State can be considered. Any attempt to reverse our approach now would be counterproductive, especially in view of the critical role to be played by Ireland during our upcoming Presidency. The Euro Plus Pact comes under the aegis of the Department of the Taoiseach which coordinates the updating of Ireland's set of objectives under the Pact.

This is an agreement which applies to all of the euro area Member States - as well as Bulgaria, Denmark, Latvia, Lithuania, Poland and Romania - and its focus is primarily on areas that fall under national competence. The Pact refers to a commitment by Member States to engage in structured discussions on tax policy issues, for example, to ensure the exchange of best practices, and fight against fraud and tax evasion while acknowledging that direct taxation remains a national competence. There is no commitment in the Pact on CCCTB. It simply says that: "Developing a common corporate tax base could be a revenue neutral way forward to ensure consistency among national tax systems while respecting national tax strategies, and to contribute to fiscal sustainability and the competitiveness of European businesses. The Commission has presented a legislative proposal on a common consolidated corporate tax base". There is no conditionality placed on the commitment made by Ireland in this statement.

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