Question on IBRC ‘politically exposed person’ lists

DÁIL QUESTION

NO 5

To ask the Minister for Finance his views on the lists of politically exposed persons under Anglo Irish Bank/Irish Bank Resolution Corporation; the reason lists were deemed necessary; the way they have been used; if he was aware of the lists and the contents of these lists; and if he will make a statement on the matter.

– Thomas Pringle.
For PRIORITY answer on Thursday, 16th January, 2014.
Ref No: 1757/14

REPLY

Minister for Finance ( Mr Noonan) : 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 (“CJA 2010”) to determine whether or not 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 CJA 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 CJA 2010 requires that institutions take the following steps prior to establishing a business relationship with a customer or carrying out a transaction:
1. Have appropriate procedures in place to determine whether a customer or beneficial owner is a PEP (enhanced due diligence procedures);
2. Obtain senior management approval prior to the establishment of a business relationship with a PEP;
3. 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/borrowers with significant prominence in the public domain (due to, for example, business, sporting and media interests).
The Special Liquidators understand that customers/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.
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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