Ireland in EU top 10 for money laundering

Ireland has the ninth highest number of financial transactions linked to money laundering or terrorist financing in the European Union, according to a new report.

Ireland in EU top 10 for money laundering

Ireland has the ninth highest number of financial transactions linked to money laundering or terrorist financing in the European Union, according to a new report, writes Cormac O'Keefe.

The EU police agency says that Ireland is third highest for reports that specifically relate to the suspected financing of terrorism.

A Europol report shows that the number of financial transactions subject to garda investigation almost doubled between 2006 and 2014.

In its Financial Intelligence Group Report, the agency estimates that “barely 1%” of criminal proceeds in the union are ultimately confiscated by authorities.

It said the stark findings showed that the speed of official responses in Europe was “simply too slow” and that there was a need for increased financial intelligence sharing, centralised bank registers and an EU financial intelligence unit.

Europol has collected information supplied by financial intelligence units in the 28 EU states, documenting suspicious transactions reports filed by financial institutions, professional offices and designated cash-based industries.

The report reveals:

  • Ireland recorded 120,971 suspicious transaction reports from 2006 to 2014;
  • Numbers increased from 10,403 in 2006 to 18,302 in 2014 — the ninth highest out of 28 states;
  • 586 (4%) of the suspicious transactions reports in Ireland in 2013 and 618 (3%) in 2014 related to terrorist financing which is the third highest and compared to an average of 0.6%. The report said more reports were being collected, rising from 590,800 in 2009 to 960,500 in 2014.

It said this indicated that certain reporting entities took their obligations very seriously and had increased resources in the area.

The report said about 10% of the suspicious transactions reported by the 28 states annually are deemed suspicious and worthy of further investigation.

It said certain countries, “notably Cyprus and Malta”, receive very few suspicious transactions reports despite the size of their banking sectors and the significance of these jurisdictions in offshore financial services.

The leader of the Kinahan crime cartel, Christy Kinahan, a convicted money launderer and drug dealer, has long had significant investments in Cyprus.

The report says non- residents are the subjects behind 75% of all suspicious transactions reports in Cyprus, while Luxembourg (which also has a large financial sector) receives almost five times as many suspicious transactions reports involving non-residents as residents.

Europol executive director Rob Wainwright said money laundering was one of the key engines of crime, sustaining a trade worth billions of euro.

He said the task of combatting the problem had become more difficult due to the increasingly global and virtual nature of financial services as well as crypto currencies and anonymisation tools that frustrated the identification of beneficial owners.

“Europol estimates barely 1% of criminal proceeds in the EU are ultimately confiscated by relevant authorities,” he said.

He said anti-money laundering regime still operated at a domestic level and had not “fully adjusted to the reality of a problem” that was defined by its international nature.

He said that while structures existed to facilitate cross-border co-operation between national units, significant barriers remain.

He added that there was an urgent need for a supra- national overview of increasingly globalised markets.

“Current efforts are ineffective to tackle burgeoning cyber-enabled crime and online frauds,” he said.

“The time taken to co-operate between the private sector, financial intelligence units and law enforcement means the speed of response is simply too slow to stem the flow of funds which move globally almost instantly.”

He said responses should include greater financial information sharing, central bank registers and an EU financial intelligence unit.

This story first appeared in the Irish Examiner.

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