Bank of New York Mellon Corp. won a contract to be custodian for as much as 13 billion euros ($16 billion) in back taxes that Apple Inc. will pay to Ireland, according to a person familiar with the matter.
The Irish government chose Bank of New York Mellon as custodian while the money is held in escrow pending an appeal by Apple and Ireland against a European Union tax ruling, the person said, asking not to be identified because the information isn’t public. The government hasn’t yet named an investment manager for the funds.
Bank of New York, Ireland’s Finance Ministry and the Irish National Treasury Management Agency, which is managing the selection process, all declined to comment.
In a 2016 order that reverberated across the Atlantic, the European Commission, the EU’s executive arm, slapped Apple with a tax bill of as much as 13 billion euros, saying Ireland had granted unfair deals that reduced the company’s effective corporate tax rate. The commission sued Ireland in October for failing to collect the taxes quickly enough. The final figure could be about 14 billion euros, including interest, Apple has said.
While Apple and Ireland appeal the decision, regulators demanded that Ireland hold the money in escrow until the process is complete. The appeal may take as long as five years.
The Brussels-based commission has referred Ireland to the European Court of Justice. The money, which was initially due by Jan. 3, 2017, will be collected in the second quarter of this year, the Irish government said.
Bank of New York Mellon had a record $33.3 trillion under custody and administration at the end of last year, and the contract to look after Apple’s cash in Ireland is a big symbolic win in an industry where price competition is fierce among the top players in the industry. Last year, BlackRock Inc. yanked custody services from State Street Corp. on more than $1 trillion in client assets, moving them to JPMorgan Chase & Co.