€5.4bn laundered through Ireland in just one year

A report by accountants Grant Thornton has estimated that over €5bn was laundered through this country in 2012.

It said that while measures to combat money-laundering here has improved, with the delayed implementation of a European directive, there has been a growing international demand for illicit goods and transactions.

The report said criminals and terrorists have sought to exploit the country’s open economy and reliance on foreign investment to wash their earnings back into the system.

Grant Thornton explained that once criminals had taken the risk of introducing their cash into the system, by purchasing an asset or lodging it into an account, they could use multiple layers of international transactions to find a seemingly legitimate destination for the loot.

The report said attempts to thwart them have been helped by developments in techniques used and international legislation.

“Over the past few years there have been a number of changes that have shaped the process of money-laundering to its current form,” the report states.

“The three key areas where changes have occurred include ongoing internationalisation, the growth of international trade; a significant advancement of technology related to big data and money transfer; and the widening of the scope of regulations guiding anti-money laundering.”

The Grant Thornton report also looked at the frequency and cost of sales in cigarettes, electronic products, and pirated goods in the black market.

To underscore the potential cost of the trade, report authors used measurements gathered in a Cambridge University study on the cost of cybercrime and applied it to Ireland.

Based on this, it said the total cost of cybercrime in Ireland in 2012 was €630m, including money actually stolen and the effect on consumer confidence in electronic payments.

This included €79m on credit card frauds and €144m on the sale of counterfeit software programmes. It said the cost of fake pharmaceuticals was €32m.

However, the largest hit in this category was €212m, which was put down to traditional tax fraud moving to use computer-based techniques.

The report was presented at a conference on money laundering yesterday.

Brian Hayes, the Office of Public Works minister, said the trade in counterfeit goods and cash transactions was undermining legitimate businesses and costing the economy in tax revenue.

Mr Hayes said internet shopping was a cause of concern and this was supported by the rise in seizures of goods sent through the postal network.

He said it also had an impact on consumers who might not realise what they were supporting.

“A recent seizure by Customs officers at Cork Airport of 100 counterfeit electric hair curlers also highlights the potential dangers to consumers from buying sub-standard, illegal goods,” Mr Hayes said.

“We are all responsible for ensuring that the message gets out to the general public that this is also a serious consumer protection issue.”

Report stats

* A quarter of Irish smokers have knowingly bought illegal tobacco.

* €466m is lost to the Irish economy because of the laundering of illegal fuel.

* €390m is lost to the tax base because of counterfeit or smuggled tobacco.

* Cybercrime costs the country €630m and, of this, more than €200m is because of tax fraud.

* Overall, it is estimated that €5.4bn was washed through the Irish economy in 2012.