The Bank of Ireland was given an assurance by the Revenue Commissioners in 1987 that they would enforce their regulatory powers to inspect non-resident accounts, the bank's former chief executive told the DIRT inquiry.
Mr Mark Hely-Hutchinson said the bank was concerned, following the introduction of DIRT in 1986, that competitors would gain an unfair competitive advantage through non-compliance with the regulations.
Bank of Ireland sought a meeting with the Revenue Commissioners to try to persuade them to enforce the law because it believed the policing option was the only one which would be effective. Revenue was the only mechanism it could turn to, he said.
"We were trying to persuade the Revenue to ensure that the other people did not compete unfairly against us," he said.
According to the bank's minute of the meeting, the former Revenue Commissioners chief executive, Mr Seamus Pairceir, intended "to demonstrate Revenue's intention to fully use the powers of inspection given to them by the 1986 Act".
"His intention is to issue notice to all financial institutions in a number of provincial towns and to then carry out comprehensive inspections of all declarations," the minute stated.
The chairman, Mr Jim Mitchell TD, said the committee now knew nothing had been done following the meeting and the declarations for non-resident accounts had never been checked anywhere.
He said it was interesting to note Revenue had been Bank of Ireland's only recourse. "You went there but nothing happened as a result of your representation."
Mr Hely-Hutchinson said discussions with the other three associated banks on a voluntary code of compliance would have been pointless because they would "say all the right things" but nothing would happen at branch level.
The amount of trust between the chief executives of the four clearing banks was such that a discussion of a voluntary code of compliance would not be embarked upon. A proposed code of conduct was raised with the other banks in the 1983-84 period.
"Everybody said `Yes', and that was really the end of it, because one knew perfectly well that they did not mean it," he said.
He agreed with Mr Mitchell that there was no banking forum that he had any confidence in.
He said regular discussions were held with the chairman of the Revenue Commissioners going back to 1983 on the whole area of non-resident accounts.
Bank of Ireland had declared from day one that it was going to clean up its systems "and we were concerned that we would be at a competitive disadvantage if we did so or as we did so".
Mr Maurice Keane, group chief executive, said in his opening statement that Bank of Ireland had been expressing its concerns on the operation of non-resident accounts "more than 20 years ago, and well before the introduction of DIRT in 1986".
The bank regretted the incidences of deliberate non-compliance. Its audits throughout the period had identified a total of about 250 bogus accounts out of an average of 70,000 non-resident accounts. Its estimate of potential liability for arrears was between £1 million and £1.5 million which "illustrates that we did not have a systemic or material problem".