“I’m not sure why people are surprised when it comes to continuing tax evasion and tax avoidance as it pertains to certain financial institutions.”

Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach 
Debate: Thursday, 14 Dec 2017

Paradise Papers (Resumed): Allied Irish Banks
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Extract
John Deasy: Regarding the evolution of our laws dealing with tax avoidance and tax evasion, in 2003 the Chairman [John McGuinness TD, pictured] and I sat on the Committee of Public Accounts. At the time it became clear and was accepted that AIB and other banks were involved in tax avoidance of almost an industrial scale with their customers. It was not a matter of conjecture but was proved to be the case. As well as the debates we had at the Committee of Public Accounts in 2003 and 2004, it resulted in a change in the law.

The Central Bank and Financial Services Authority of Ireland Act 2004 made it an offence to aid and abet, conceal and counsel customers in tax avoidance and tax evasion, but I am not aware of any conviction arising from the Act since. In actual fact, several years ago, relating to HSBC and deposits held in France, the then chairman of the Revenue Commissioners, Ms Josephine Feehily, made it clear that the 2004 Act was completely insufficient.

She made a point that tax inspectors would have to be standing beside the tax official and client to actually prove a case to the criminal level of proof required. That is still the case with regard to our tax evasion laws...

My basic point is that AIB and other banks were involved in the setting up of bogus foreign deposit accounts. Even though the law was changed based on the work we did in 2003, I am dubious about the efficacy and utility of the Act passed in 2004. That has been verbalised by the chairman of the Revenue Commissioners since.

... I am not sure why people are surprised when it comes to continuing tax evasion and tax avoidance as it pertains to certain financial institutions. We need to go back and take a look at the laws which govern this area. Certainly, when it comes to the Revenue Commissioners, they are still of the opinion that the laws are not sufficient when it comes to governing the entire area."