MINISTER FOR Finance Brian Lenihanhas rejected "conspiracy" claims by the Labour Party that he was enabling financial institutions to hide assets and information through legislation in other countries.
The party's finance spokeswoman Joan Burtonalleged that technical amendments introduced in the Bill to create the National Asset Management Agency (Nama) would allow financial institutions hide behind laws in other jurisdictions "which are used for tax avoidance and mitigation".
However Mr Lenihan insisted that the “drafting” or technical amendments had been checked by the Attorney General.
During the final stages of the debate on the Nama Bill, which was passed yesterday by both Houses of the Oireachtas, Ms Burton said that “when a bank or credit institution applies to join the Nama scheme, it is required to supply information”. But “the Minister has introduced an amendment to qualify that requirement by taking into account prohibitions in applicable laws.
“These exist in many jurisdictions where there is banking confidentiality, not to mention tax confidentiality” and they were “used for tax avoidance and mitigation”.
She claimed that additions were being made to the legislation to “limit what Nama can do to receive full accounting from those institutions, which will benefit from the taxpayers’ guarantee of €54 billion. Why is the Minister adding more measures to enable applicants hide behind overseas legislation?” She questioned whether the Minister and the Attorney General had given ‘‘due consideration, on behalf of the Irish taxpayers, to the issue of avoidance” of “disclosure, and accountability by whole parts of bank empires and people who are the subject of the distressed loans”.
But Mr Lenihan insisted that “there is no conspiracy in my department’’.
‘‘These amendments have been checked by the Attorney General and are viewed as drafting amendments. I said that in good faith in the House.” He explained that if a Nama applicant or subsidiary required consent for a particular step or move, it had to be obtained “in accordance with the applicable law”. He said that “under the system of international law and the comity of nations, respect is given by one state to the laws of another”. The amendment merely recognised that “when consent is required under the law of another state it is obtained in accordance with the applicable law”.
The Minister said the legislation was “making explicit what is already implicit”. Mr Lenihan added that “it was never the intention to seek to impose obligations on subsidiaries in foreign jurisdictions which would cause them to break local laws. That must be clarified explicitly in the legislation.”
Fine Gael deputy finance spokesman Kieran O'Donnellasked if the Minister had looked at the loans' legal structures. "We can't have a situation where the banks keep the cherry, the good stuff, and the taxpayer ends up with the chaff in Nama." The Minister stressed that the department had done "substantial due diligence on the loan book" of overseas properties. "The vast bulk were in the US and the UK and not in offshore island jurisdictions." Other countries were involved, but "mainly EU member states".
