EU targets small firms in fraud crackdown

BUILDERS, bookmakers and garages are among a range of businesses to be targeted under tough new money laundering proposals drawn up by the European Commission.

All businesses dealing in single or linked cash payments of €15,000 or more will have to disclose suspicious transactions to the authorities.

Financial institutions and 10 other professions, such as estate agents and accountants, already pass on this information.

When the proposals are approved, construction companies, hotels, travel agents, tradesmen, furniture and audio-visual stores and other businesses will be affected.

Top of the list of businesses to be monitored are garages and bookmakers, some of which have traditionally been used by criminal organisations to launder their proceeds.

The Criminal Assets Bureau last year drew attention to the use of back street garages to launder money.

The commission's move supports legislation going through the Dáil which gives the Criminal Assets Bureau power to seize properties or money which are the proceeds of foreign-based criminal activity.

These two separate initiatives will further crack down on the ability of domestic and foreign crime bosses to launder profits.

The directive from the European Commission will extend money laundering requirements to include:

All people dealing in goods or services for cash payments of €15,000 or more.

Trust and company service providers, such as life insurance intermediaries - whether the payment involves a single transaction or apparently linked transactions.

"The fight against money laundering and terrorist financing is a top political priority for the commission," said Internal Market Commissioner Frits Bolkestein.

"Massive flows of dirty money can damage the stability and reputation of the financial sector and threaten the single market, while terrorism shakes the very foundations of our society."

He said that in line with the latest recommendations of the Financial Action Task Force (FATF) - the world anti-money laundering body - financing of terrorism would now be included in the directive.

This would incorporate the collection of legitimate money or property for terrorist purposes.

"It is appropriate to extend money laundering requirements to all those handling goods and services. Bookmakers come up again and again in money laundering crime stories," said Labour party justice spokesman Joe Costello.

He said provisions in relation to the use of legitimate funds for terrorist purposes could have implications for Sinn Féin's fundraising activity.

Pat Delaney of the Small Firms Association said the directive would place further unnecessary burdens on small businesses. "There are some circumstances where it may be warranted, but it shouldn't be something that should be applicable to all businesses," he said.

The new directive will also require businesses to carry out more detailed customer identification checks. It now goes to the EU Council of Ministers and the European Parliament for adoption.