Neasa Hourigan (Dublin Central, Green Party)
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36. To ask the Minister for Finance the position regarding the practice of payees discouraging such as refusing to accept online direct debits using European Union non-Irish IBANs; the compliance of this practice with Article 9(2) of the relevant SEPA Regulation; the level of enforcement of this regulation by the Central Bank; and if he will make a statement on the matter. [30782/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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The European Commission recently increased its efforts to deal with a common problem across EU Member States known as IBAN discrimination.

IBAN discrimination occurs where an employer or company refuses to accept your Single European Payment Area (SEPA) IBAN for euro payments or direct debits. Such restrictions are not allowed under the SEPA Regulation and constitute a barrier to the smooth functioning of SEPA. This is a breach of Article 9 of the SEPA Regulation (Regulation EU 260/2012). Article 9 states that that a payer or payee cannot specify the Member State in which the account to be debited or credited is located.

Obligations under the SEPA Regulation apply to all entities making or receiving payments, including businesses (some of which are regulated financial services providers), employers and state institutions.

The Commission has issued letters to the national competent authorities of Member States where instances of IBAN discrimination were reported. The Central Bank of Ireland was designated as competent authority for the purpose of the SEPA Regulations and Department officials have been engaging to determine the best means of dealing with the issue of IBAN discrimination in Ireland. This issue could potentially escalate given a number of credit institutions do not use "IE" IBAN for their bank account numbers.

At present, where non-compliance (with Article 9(2) of the SEPA Regulation or any other provision) is found, the Central Bank’s response is determined in accordance with its legislative powers, including as provided for in the Irish SEPA Regulations.

If a complaint relating to an alleged infringement of the SEPA Regulation by a Payment Service Provider is, in the first instance, made to the Central Bank, the Central Bank informs the complainant of the right to make a complaint to the Financial Services and Pensions Ombudsman.

Department officials are working with the Central Bank to amend the SEPA regulations in order to assist the Bank in dealing with cases of IBAN discrimination and to proactively resolve some of the potential issues that may arise here.

The proposed changes to the SI 132 of 2013 (the Irish SEPA Regulations) are being made to give the Central Bank of Ireland additional powers to act against entities, that are not regulated financial service providers, engaging in the practice of “IBAN discrimination”.

These changes will expand the direction making powers of the Central Bank and bring the enforcement powers in line with the powers provided for under other similar legislation such as the European Union (European Markets Infrastructure) Regulations 2014.

Officials will continue to engage with industry and the relevant authorities on this topic.