Dáil Éireann - Volume 487 - 17 February, 1998
Written Answers. - Supervision of Banks.
Mr. Rabbitte Mr. Rabbitte
167. Mr. Rabbitte asked the Minister for Finance the supervision his Department and the Central Bank operates in regard to products offered by banks to their customers which may facilitate the evasion of tax; the steps, if any, his Department and the Central Bank are taking to curb these activities; the number of prosecutions pending against these banks; and if he will make a statement on the matter. [3733/98]
Minister for Finance (Mr. McCreevy) Charlie McCreevy
Minister for Finance (Mr. McCreevy): My Department has no statutory function in relation to the supervision of banks. In accordance with the Central Bank Acts, the Central Bank has the duty and function of licensing and supervising banks in Ireland. The Deputy will recall that in response to a previous question from him I indicated that the Governor of the Central Bank had confirmed to me that the board of the bank is satisfied with its legal powers; that the board keeps under review the bank's supervisory practices and its approach to supervision; that the board endeavours to ensure that these are in line with international best practice and are subject to continuous modernisation and adaptation to meet the needs of a changing global environment. I also indicated that the Governor confirmed that the board is satisfied that the supervisory procedures and practices are effectively implemented by the bank.
Under the provisions of the Criminal Justice Act, 1994, the Bank is obliged to report to the Garda a suspicion that any entity it supervises has committed or is committing the offence of money laundering. Money laundering embraces tax evasion. In addition, under section 49(2) of the Investment Intermediaries Act, 1995, the Central Bank may disclose to the Garda, where it has  reasonable cause to believe that a criminal offence has been committed, any information to enable further investigation of the alleged offence.
On evasion of tax, neither the Central Bank nor my Department have a statutory role which would involve them in prosecuting any person or persons. As I said when I spoke on the motion establishing the Moriarty Tribunal in September, the pursuit of the tax affairs of individuals and companies is a matter solely for the Revenue Commissioners. The Minister for Finance does not get involved in such cases for obvious reasons.
I want to make very clear my complete intolerance of those who engage in tax evasion and of those who assist or abet tax evaders. Revenue already have a wide range of powers to combat such evasion. These include powers to access bank accounts although only in certain specified circumstances where they have the names of the account holders. Following the publication of the report of the McCracken Tribunal, I asked the Revenue Commissioners and my Department to review the existing powers and to come back to me on this if they believe that these should be augmented. In addition, the terms of reference of the Moriarty Tribunal requires the tribunal to make such recommendations as it considers expedient for the protection of the State's tax base from fraud or evasion in the establishment or maintenance of offshore accounts, and to recommend whether any changes in tax laws should be made to achieve this end. If additional powers are shown to be desirable and likely to be effective then legislative proposals will be brought forward.
While the Governor is satisfied with his existing legal powers of supervision and regulation, the Deputy should note that the terms of reference of the Moriarty Tribunal include a remit to make whatever broad recommendations the tribunal considers necessary or expedient for enhancing the role and performance of the Central Bank as regulator of the banks and of the financial services sector generally. Any action recommended by the tribunal on this issue will, of course, be considered.
Dáil Éireann 487 Written Answers. Supervision of Banks.