Mr. John Palmer:

I was trying to be brief on this. It is a maximum harmonisation directive, which means we cannot go beyond its provisions. In most maximum harmonisation directives, there are several, what we call, member state discretions. There were several in this directive but none relates to this area of fraud. Colleagues who were dealing with it at the time held the normal public consultations and we used the discretions allowed in all but one case. With maximum harmonisation, we cannot go beyond what the directive says. That is simply a treaty obligation; there is nothing we can do about it.

As regards whether we could do more, the flip side is that if a directive does not deal with a matter, and PSD2 does not deal with authorised push payment fraud, there is a possibility to separately bring forward domestic legislation on it. We were looking at it to see whether anything would rule it out. We have some issues of concern about the directive as it stands. However, we should draw the committee’s attention to the fact that very recently, in an answer Commissioner McGuinness gave to Chris MacManus in the European Parliament, she stated that as the directive does not contain any provisions relating to a liability regime for authorised push payment fraud, member states are free to introduce such regulations at national level. That said, if we were going to proceed down that path, we would be looking for a lot of legal advice on our own because it is one thing for the Commissioner to say it but that would not stop an affected payment service provider, PSP, taking a case stating Ireland had gone beyond the directive, if we did. Basically, it would be a very complex legal issue.