Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

I am advised that Anglo Irish Bank, IBRC Limited and now IBRC Limited, in special liquidation, has a legal obligation under the Criminal Justice Act 2010 to determine whether a customer, or a beneficial owner connected with the customer or service concerned, being a customer or beneficial owner residing in a place outside the State, is a politically exposed person or an immediate family member, or a close associate, of a politically exposed person, PEP. According to the Criminal Justice Act 2010, a PEP is defined as:

“an individual who is, or has at any time in the preceding 12 months been, entrusted with a prominent public function, including either of the following individuals (but not including any middle ranking or more junior official):

1.A specified official;

2.A member of the administrative, management or supervisory body of a state-owned enterprise.”

The Criminal Justice Act 2010 requires that institutions take the following steps prior to establishing a business relationship with a customer or carrying out a transaction: have appropriate procedures in place to determine whether a customer or beneficial owner is a PEP - enhanced due diligence procedures are required; obtain senior management approval prior to the establishment of a business relationship with a PEP; and ensure adequate measures are taken to establish the source of wealth and source of funds involved in the business relationship or occasional transaction. In addition to this, in line with good practice and in anticipation of future legal developments and-or media coverage, including recommendations made further to the Mahon tribunal, banks typically maintained a list of domestic and high profile customers and borrowers with significant prominence in the public domain, due to, for example, business, sporting and media interests.

The special liquidators understand that customers and borrowers of IBRC Limited, in special liquidation, were included on such lists in accordance with the provisions outlined above. The inclusion of customers on these lists was standard business practice and in no way indicates that preferential treatment was afforded to these customers.

Addition information not given on the floor of the House

Under the terms of the relationship framework between the Department of Finance and IBRC, the board and management team of the bank retained responsibility and authority for determining the bank’s strategy and commercial policies and conducting its day-to-day operations, including meeting its obligations under the Criminal Justice Acts. While the Department was aware that the bank managed its obligations in this way, neither I nor my officials were provided with the contents of the PEPs lists.

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