Trust accounts set up in the Island by the Bank of Ireland Trust Company

1240/5(1853)

QUESTION TO BE ASKED OF THE PRESIDENT OF THE POLICY AND RESOURCES COMMITTEE ON TUESDAY 29th APRIL 2003, BY SENATOR E.P. VIBERT

Question

1. Is the President aware that the Irish Taxation authorities (Irish Revenue) through their RevenueOffshore Assets Group is investigating more than 400peoplefor tax evasion through trust accounts set upinJersey by TheBankof Ireland TrustCompany(Jersey) Limited, and, if so, what assistance is being offered to the IrishRevenuebyJersey's financial authorities?
2. W ould the President advise the Assembly how itwaspossibleforthesetrustaccounts to be set up in Jersey, bearing in mind the strict controls in place administered by the Jersey Financial Services Commission, and whetheritis still possible for such accounts to besetup in the Island?
3. W ould the President inform members whether or not this activity places the Bank of Ireland Trust Company (Jersey) Limited's banking licence at risk, bearing in mind that tax evasion is a criminal offence, and would he agree that international exposure of this type of activity could be extremely damaging to the Island'squest to beregardedas a "squeaky clean" international finance centre?

Answer

1. I a m awareof the matter to which the Senator refers. Assistance in respect of suspected criminal activities is a matter for the Attorney General who has the necessary powers to give such assistance if it is requested and if it is appropriatetodoso.
2. G i ven the independent status of the Financial Services Commission itwouldnotbeappropriateforme to seek to discuss the details of any case with the Commission, nor as a matter of law would the Commissionbe permitted to share with me any confidential information in its possession.However,what I can say is that since 2001, under the Financial Services (Jersey) Law, trust and company service providers have been subject to a far greater degreeof regulation than wouldbethecaseinmostother jurisdictions including the Republicof Ireland. Trust and company service providers are nowrequiredto comply with international standards for know your customer'procedures, and under the all crimes money laundering legislation are required to submitsuspicious transaction reports if they suspect that any of their clients are engaged in criminal activity.
3. T h e regulation ofbanksis a matter for the Financial Services Commission.Howeverit is well known that the Commission's policy is to expect those financial institutions that it regulates to comply with international standards. No international finance centre can ensure that noneof the clients of its financial institutions are engaging in criminal activity. What distinguishes finance centres is the extent to which they have legislation and procedures in place that minimises the riskofsuch activity occurring, and that ensures that both the financial institutions and the authorities can and do respond appropriately toany such activity when it isshowntooccur.Independent reviews ofJerseybybodiessuchas the Financial Action Task Force and the IMF have given the Islandhighmarksin these respects.