Irish Revenue Still At Loggerheads Over Ansbacher

by Jason Gorringe, Tax-News.com, London

17 April 2002

In their 5-year quest to identify individuals who made secret offshore deposits through Ansbacher, and to 'name and shame' those who were not prepared to own up and pay appropriate taxes, the Irish Revenue has run up against innumerable road-blocks, and this week in the Irish High Court the Revenue faces yet another obstacle.

Inspectors investigating the Ansbacher deposits will be prevented from naming account holders if a case brought by two individual deposit holders who want to remain anonymous is successful. The two unidentified individuals argue that the High Court exceeded its powers in September 1999, when it directed the inspectors to name account holders in their report on the Ansbacher affair - and the final report is about to be issued as the inspectors reach the end of their investigations.

The 'investors' are asking the court to be allowed to make their case without having to reveal their identities. This issue will have to be ruled on first, and the ruling, whatever it is, will surely be appealed to the Supreme Court, meaning the Ansbacher report will now almost definitely not be published before the general election.

The request for anonymity is being opposed by the Attorney General, Mr Michael McDowell, and the director of corporate enforcement, Mr Paul Appleby. On Monday an initial hearing on this point began before Mr Justice McCracken. It resumed yesterday. Mr Michael Collins SC, for the unidentified individuals, said there would be no point in his clients continuing with the case if the court ruled they had to identify themselves.

The court heard that the two applicants exchanged information with the inspectors and were allowed make representations on the findings the inspectors intend to make about them. However, they disagreed with the inspectors' finding that they were customers of Ansbacher (Cayman). Mr Collins said that to be named an Ansbacher client would mean the public would view you as a member of a "gilded elite" who was involved in tax evasion over the years and probably involving millions of pounds. It would associate you with the "worst face" of Ireland in the 1970s and 1980s. It would not matter what else was said about you in the report. Once you were named in it, your good name would be damaged.

The Ansbacher deposits were set up and operated by the late Mr Des Traynor, a top business figure from the 1960s up to his death in 1994. The existence of the deposits was discovered in 1997 when the McCracken tribunal, chaired by Mr Justice McCracken, was investigating payments by Mr Ben Dunne to former Taoiseach, Mr Charles Haughey. The inspectors were appointed on the application of the Tánaiste, Ms Harney.

The Revenue's attempts to discover the names of account holders were first resisted by Ansbacher, but after their stance began to attract adverse publicity the bank sought permission from the Cayman court to release the details of investors.

The Chief Justice of the Cayman Islands, Mr Justice Anthony Smellie, delivered a 48-page judgement, with a simple message: general confidential information relating to Ansbacher deposits should be revealed to the Irish authorities, but the names and addresses of account holders must remain confidential.

In his ruling, Justice Smellie decided that it would be unfair for Ansbacher to give depositors' names to the inspectors investigating the Ansbacher deposits when it had not been demonstrated in any way that the individuals in question had committed any crime. The judge ordered that Ansbacher Bank should disclose 'information sufficient to establish the nature of the business Ansbacher did' which could serve to show 'that Ansbacher did not conduct illegal banking business or business designed to assist in defrauding the Irish Revenue.' He ruled that all names or other identifying information should be deleted from the information and 'substituted by alphabetical letters, numbers or symbols representing such persons; the key to which shall be restricted to Ansbacher.'

The Revenue persisted, issuing formal requests in Ireland under the Taxes Consolidation Act 1997, seeking information from individuals, third parties and financial institutions. Four successful applications were made to the High Court requiring third parties and financial institutions to provide information.

According to the Comptroller and Auditor General's annual report for 2000, more than I£32m had been collected as a result of the continuing Revenue inquiries into the Ansbacher deposits and the National Irish Bank (NIB) offshore schemes. The Ansbacher inquiry had led to payments on account of I£4.6 million from 24 people identified in the Ansbacher report compiled by the authorised officer, Mr Gerry Ryan. The report named 120 people and, according to the Comptroller and Auditor General, 'offshore activity by persons other than those named in the report has also come to light during this ongoing investigation.'

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