EU Directives

Dáil Éireann Debate, Thursday - 1 February 2024

Thursday, 1 February 2024

Ceisteanna (82)

Róisín Shortall

Ceist:

82. Deputy Róisín Shortall asked the Minister for Finance if, in the interests of transparency, he will re-examine the statutory instrument that came into effect on 23 June 2023 relating to the Irish register of beneficial ownership of companies, which has effectively denied the public, including business journalists, access to public interest information; if he will consider amending this SI in line with provisions in other EU countries; and if he will make a statement on the matter. [4839/24]

Freagraí ó Béal (6 píosaí cainte)

Deputy Catherine Murphy

I am taking this question on behalf of Deputy Shortall. It relates to the change in law by way of statutory instrument last year that, effectively, shut down transparency when it comes to the central register of beneficial ownership of companies. This change came on foot of a Court of Justice of the European Union judgment, but we have interpreted it very differently from other jurisdictions.

Deputy Michael McGrath

I thank the Deputy for the question. In November of 2022, the Court of Justice of the European Union, ECJ, ruled in joined cases C-37/20 and C-601/20 that a provision of the EU anti-money laundering, AML, 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 EU.

To ensure our domestic legislation complies with the court's ruling, and following consultation with the Office of the Attorney General, 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 and provident societies, RBO, that operate under the auspices of the Companies Registration Office, as well as 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.

As Minister for Finance, I signed into law the relevant regulations: SI 308 of 2023, the European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) (Amendment) Regulations 2023. The Deputy may be aware that a recent political agreement was reached in Brussels in respect of the new EU AML rule book. However, formal agreement, including the text, remains to be agreed by all member states. The EU Council proposes that provision for access to beneficial ownership information by the public should be on the basis of "legitimate interest". Following agreement of the new EU AML package, officials will consider what further amendments to domestic legislation are required as part of the transposition process.

The direct answer to the question is that following the ECJ judgment, my Department consulted with the Attorney General and received advice. On that basis, the statutory instrument was prepared and that is what I signed into law last year. This is an area, though, where policy is developing quite quickly and I expect we will be returning to this issue.

Deputy Catherine Murphy

It is having an extreme impact in the way it was handled by way of the statutory instrument. We are aware there are a great number of investment funds. We are also aware of brass-plate companies in the financial services sector. Huge contracts are being allocated by the likes of the Dublin Region Homeless Executive, DRHE, and the Department of Children, Equality, Disability, Integration and Youth. I am certainly well aware of people whom I do not believe are the beneficial owners of the companies getting some of these contracts. This change is shutting down transparency. The way this situation has been dealt with by way of the statutory instrument is extreme, ham-fisted and is cutting down transparency. We cannot have accountability if we do not have transparency. If we cannot get the names of the beneficial owners and do not know who the beneficial owners of these companies are, and there are companies within companies within companies like a Russian doll, then people will misuse the system because they know they are being sheltered. This is essentially what has happened with this statutory instrument.

Deputy Michael McGrath

I thank the Deputy. As is normal when there is a European Court of Justice judgment that impacts policy or the application of EU law in Ireland, the line Department consults the Attorney General. That is what happened in this case, and that formed the basis of the statutory instrument that was introduced and ultimately signed into law. I am a very strong supporter of transparency in these matters and will do all I can to ensure the previous system is restored, but in a manner compatible with EU law and the decision of the European Court of Justice. I am a firm believer in the vital role journalists play in our democratic system in ensuring information in the public interest is made available to the public. Therefore, I will continue to engage with my officials and the Attorney General on this issue, but I have pointed out that a decision has been made or an agreement has been reached in the context of the new AML rule book that deals with the issue of legitimate interest.

Deputy Catherine Murphy

I am aware that things are moving in Brussels, but they move very slowly. In the meantime, we will have a problem with transparency. An over-the-top approach has been taken. In this regard, consider what is happening in other jurisdictions. The likes of France and Latvia have completely ignored the approach. The measure has been interpreted differently in various parts of Europe. We have taken a very conservative, extreme approach that is sheltering people. The vast majority of people who own companies will have no issue but journalists will not be able to write stories about the real offenders whom the register is in place to address because they will not be able to corroborate the identity of beneficial owners. This has been taken to the extreme and we should not have to wait until a change happens in Brussels. If we do, we will be talking about a couple of years.

Deputy Michael McGrath

The Deputy makes the fair point that there are different interpretations of the ECJ judgment across member states. That is the case. As we would be expected to do, we consulted the Government’s legal officer. We received advice and it was on that basis that the statutory instrument was devised. There has been no policy decision and there is certainly no policy intent to restrict access or limit it in any way.

I will engage further on this issue. I accept the Deputy’s point that the EU process will take time. That is the nature of how things work. The Deputy made the case that the Irish interpretation is extreme. It was based on the legal advice provided, but I will ask for it to be examined again because it is important that we be as transparent as possible and allow as much access as we can within the parameters of EU law and in a manner consistent with the ECJ judgment. I make that commitment to the Deputy.