Dinny McGinley (Donegal South West, Fine Gael) | Oireachtas source

I thank Senator Power for raising this matter in the Seanad.

The proposed 4th EU anti-money laundering directive, currently being negotiated at the Council of the European Union, will update and replace the 3rd EU anti-money laundering directive and reflect the views of member states on the operation of the existing system. While the Department of Finance plays a lead role, the proposed 4th anti-money laundering directive covers a number of policy areas which come under the responsibility of a number of different Departments. The issue of beneficial ownership of companies is a matter of interest to the Department of Jobs, Enterprise and Innovation, which deals with company law matters.

The Minister for Finance advised me that he has consulted with the Minister for Jobs, Enterprise and Innovation, who has confirmed that there are a number of mechanisms already in company law through which beneficial ownership of shares can be identified. For example, any person with a financial interest in a private company may apply for a court order, under section 98 of the Companies Act 1990, to ascertain details of ownership of that company. Additionally, in regard to public companies there is a requirement, set out in Part IV, Chapter 2 of the Companies Act 1990, to disclose interest in shares when such interest reaches a specified percentage threshold.

Under section 14 of the Companies Act 1990, the Director of Corporate Enforcement may appoint inspectors to investigate and report on the membership of any company and otherwise with respect to the company for the purpose of determining the true persons who are or have been financially interested in the success or failure, real or apparent, of the company or able to control or materially influence the policy of the company.

At the European Council, Ireland has supported the Lithuanian Presidency approach in the proposed 4th anti-money laundering directive, which will require that member states ensure that the beneficial ownership information on companies incorporated within their territory is held in a specified location, for example, in one or more registries, or by means of other suitable mechanisms.

The issue of a public register for beneficial ownership has been discussed at ECOFIN and while there was support for beneficial information to be known and made available, there was majority support for the specific procedures and mechanisms around this to be left to individual member states. Negotiations are continuing on this proposed directive at the Council of the EU and due consideration will be given to this issue as part of the final agreement on the 4th anti-money laundering directive.

Ireland's International tax strategy, published on budget day, clearly sets out Ireland's policy objectives and commitments on a range of international tax issues, including countering tax fraud and evasion. This document includes Ireland's international tax charter which sets out the principles that guide Ireland's approach to these international tax issues. The charter includes commitments to both full exchange of tax information with our tax treaty partners and also commitment to automatic exchange of tax information in line with existing and emerging EU and OECD rules.

As the chairperson of the Revenue Commissioners stated, information, particularly third party information, is the lifeblood of tax administration. It is one of the most powerful tools in combating tax fraud and evasion. Automatic exchange of information between tax administrations is being heralded as the new global standard in the fight against tax fraud and evasion.

During Ireland's term as President of the Council of the European Union, work in the area of tax fraud and evasion was prioritised. Ireland brokered agreement by ECOFIN on comprehensive council conclusions on tackling aggressive tax planning, tax fraud and evasion. Progress was made on the negotiating mandate to align EU savings taxation agreements with non-EU jurisdictions, with the extended scope of the proposed revised savings tax directive. Ireland supports the global move towards automatic exchange of information and welcomes the work of EU to amend the directive on administrative co-operation in the field of taxation.

The issue of beneficial ownership is also linked to the country by country reporting issue. Ireland supports the G8 Lough Erne declaration on country by country reporting and ongoing work at OECD level on tax and development issues, including work on country by country reporting.

Ireland continues to support the anti-money laundering and anti-tax evasion agendas and promotes greater transparency across the financial services and tax areas. As outlined, Ireland supports the idea that beneficial ownership information should be known and due consideration will be given to the most appropriate mechanisms in light of our work in the various international fora and the final compromise agreed on the fourth anti-money laundering directive. Any legislative change which will reduce or eliminate corruption is clearly welcome. However, to be effective it must be properly targeted and proportional. Otherwise, innocent parties will have undue administrative burdens placed upon them and those who are breaking the law will remain unscathed.