Ireland is funneling corrupt Russian money: Alan Kelly
Labour Party leader Alan Kelly warned that 'oligarchs and their shell companies, thousands of them, may seek to use Ireland to continue to funnel money,' in response to international sanctions. Picture: Damien Storan.
Ireland is at risk of becoming the "best small country in the world to funnel corrupt dirty Russian oligarchs' money", the Dáil has been told.
Labour leader Alan Kelly made the comments during Leaders' Questions on Wednesday, when he asked the Taoiseach Micheál Martin about potentially seizing assets of Russian shell companies in Ireland.
More than €118bn was funnelled from Ireland to Russia between 2005 and 2017, a research paper from Trinity College revealed in 2020, as reported by the Irish Examiner.
The research paper said that companies based in the International Financial Services Centre (IFSC) in Dublin had raised funds for some of Russia’s most important state-backed and oligarch-controlled companies, who have previously been subject to economic sanctions and accused of criminal activity.
The paper argues that funds from IFSC-based entities to Russian-connected firms are consistent with “round-tripping” — transactions that bolster the revenue of the companies, but that do not provide real economic benefit.
"The Irish conduits examined are part of the licit economy in Ireland," the research by Cillian Doyle and Jim Stewart says.
"However, the paper shows links between conduits in the study and allegations of illegal/improper activity by Russian-controlled firms. Hence, it is possible that conduits in Ireland, though totally compliant, are misused by cross-border criminal organisations."
Speaking in the Dáil today, Mr Kelly said that the Dáil should pass a motion officially condemning Russian actions in Ukraine as well as asking the Taoiseach about measures to tackle what he called the "washing" of billions of euro. He said:
"Oligarchs are washing money through countries like our own because they cannot trust their own banking system because it is so corrupt. If sanctions by the US, the UK and the EU lead to a clampdown on Russian billionaires, there is a likelihood that oligarchs and their shell companies, thousands of them, may seek to use Ireland to continue to funnel money.
"What are we going to do about this and what is the Government going to do about it, as well?"
In response, Taoiseach Micheál Martin said Ireland is part of the EU-wide sanctions regime and that the EU, along with the US has "agreed a range of sanctions in terms of the listing of individuals, 27 influential oligarchs, business people, politicians, and military leaders, the Russian minister for defence, military commanders leading the operation, individuals from the media, propaganda sectors, 351 MPs in the Russian Duma who voted for the recognition, of which 22 are already listed, the listing of entities and asset freeze".
"This is in addition to myriad of Crimea-related sanctions regime in terms of imports and exports into the Donbas region, as well as financial restrictions prohibiting on lending to the Russian central bank, and asset freezes of two private banks.
"In regard to 2005 and 2017 and billions being funnelled through the IFSC to Russian entities, we will share in any sanctions with the European Union and we will support all sanctions, including the targeting of the ability of the Russian state to access the European Union's capital and financial markets, which will be a significant sanction in itself," Mr Martin said.
"The financial services offering of the IFSC, as the Deputy knows, relates to special-purpose vehicles. Since 2018, legislation has been enacted in regard to money laundering and other matters."
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