Shane Ross (Dublin South, Independent) | Oireachtas source

I welcome this Bill as something which is more than necessary. The calm and measured way in which it is being introduced and welcomed in this House suggests it is almost a rubber-stamping procedure, it would automatically go through and there is not really anything important behind it. That disguises to some extent the alarm bells that had been ringing on money-laundering, not only in the world but, specifically, in Ireland.

Most Members of this House will be aware that several of the largest banks in the world, included the blue-blooded Coutts Bank in the United Kingdom and the HSBC overseas, have been involved in fairly massive money-laundering in the past decade much to the surprise of the innocent who feel that big banks somehow do not get involved in this sort of thing and have been outed for doing so.

There is a global body to which the Minister referred call the Financial Action Task Force, FATF, which was set up in 1989 to counter this on a global basis. I will not say it has been singularly unsuccessful but it has certainly been unsuccessful because money-laundering to the extent of 2.7% of global GDP has been carried on a fairly regular basis.

This is a chronic problem, by definition not discovered. As new rules are introduced, it is a little like how accountants behave after a budget. In this case, the criminals find new ways of by-passing these new rules. It is a serious global problem and in measured terms, if the 2.7% figure is correct, it is one which needs tackling urgently and has not been resolved.

Why, in Ireland, are we introducing this Bill? It is because it is a fairly urgent problem here as well but it is something which, when commentators talk about it, tends to turn one off. The Bill is somewhat technical and the Minister's speech is full of acronyms and terms which make it difficult to understand, but the problem is considerable.

The Bill comes in the wake, not of calm automatic background measures which are introduced on a regular basis but of a serious warning by the Central Bank last year about Ireland's compliance with money-laundering standards. Ireland's compliance with money-laundering standards have been fairly pitiful. In October last, the Central Bank warned that the country's banks and financial institutions are failing to comply fully with the law on money laundering. The Central Bank supervisory team wrote a letter to the chief executives of all Irish regulated banks and financial institutions in the country in which it warned that the regulator may take enforcement action against institutions that are found to be in breach of the law.

They had carried out an 18 month inspection that audited those 60 financial institutions across the country and those inspections revealed what it called "a significantly lower level of compliance" with the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 than had been expected. That is Central Bank speak for a pretty slovenly compliance regime in Ireland. It does not like spelling this out because of the ripple effects it might have overseas with consequent reputational damage. It stated that Irish firms should bear in mind "the reputational considerations both for the financial services industry and Ireland as an international financial services centre".

As a result of our non-compliance Ireland was put on what is called the follow-up process by FATF, the international body, which means we are on watch for not complying and are in the bad books of the international policemen who inspect how we are behaving. One would not think that from what we heard today - one would think this was some sort of regular automatic routine Bill, but it is not. It is required in order to remedy that we are in a follow-up process meaning we are under the watchful eye of the inspectors or the international regulators because they do not like what they see.

I welcome that the Bill has been introduced. In his speech the Minister specifically asked us to pass it by June because the Government does not want to have to attend the FATF conference not having complied and not having introduced the necessary legislation to ensure we are ranked higher by the FATF process. It is an admission that for a long period of time the law in this area and practices in this area have been inadequate. For that reason we should welcome the Bill. However, given that we have had such a banking crisis since 2007-08, it is incredible that this particular area has not been properly tackled. Let us hope that this takes us away from the follow-up process, that we enforce the law properly and that it is internationally recognised that we are doing so.

Underlying this is the importance to Ireland of the IFSC. We have always patted ourselves on the back about the IFSC and since its introduction in 1987 it has been a significant success for Ireland. Let us recognise the role of former taoisigh, Albert Reynolds and Charles Haughey, and others, who, for all the bad things that some of them have done, had some sort of vision for the IFSC. It has been successful because it has brought a huge amount of international interest to the country, global investment and jobs. The jobs and spin-off effects have been fantastic, which must be recognised.

However, there has always been a question mark around the IFSC and how it is being regulated. There has always been some concern that there are too many so-called "brass-plate" bodies in the IFSC - referring to organisations that only exist for money to go through. There has always been some concern over the identity of those sending money through, producing, of course, some limited amounts for the Exchequer, because the profits are made here and therefore they pay tax here. There has always been some concern that there are so many organisations, and always have been, which do not give a great deal of employment, but are registered here and have put up a brass plate. They are not banks, dealers or stockbrokers. They do not do anything particularly constructive in the financial world. There is no market there as such for what they are doing. The Bill, apparently, is to address that particular problem because of the potential reputational damage to which the Central Bank referred last year. It is possible that reputational damage is being done.

In 2005 The New York Timesreferred to Ireland as the "Wild West of European finance". That referred directly not just to the antics of Anglo Irish Bank, Irish Nationwide Building Society and others, but also to the possibilities for disasters and indeed those that had happened in the IFSC at the time. The reputational damage must be repaired or at least the reputation protected and the Bill goes some way towards that. If our reputation is damaged, the competitiveness of the IFSC will immediately deteriorate. We must remember this is not some kind of protected entity. The IFSC is in direct competition with London, Luxembourg and other financial centres throughout the world. If we get the reputation for not complying and being in the rear-guard of those who are complying with anti-money laundering rules that have been set, we will attract the wrong type of money and the wrong type of interest. While we have no figures on this, given that we were behind and it is necessary to do this in a hurry and that we were considered to be not complying properly I hope it does not mean that has already happened.

There are real threats to the IFSC from elsewhere. It is a hot debate now and I know I would be in a minority on this side of the House on this as I support the Government very strongly. There is a real danger of the introduction of a financial transactions tax, FTT. If that is introduced there would be a real danger of a movement from here to the UK where it will not be introduced. We must not introduce a FTT which would result in money flowing out of here into Luxembourg and other financial centres. Other financial centres setting up outside Ireland are pointing the finger at us and looking to attract that money. Jobs would be lost. Companies that set up here have no affection for the place. They leave at dawn in slippered feet and that is the end of the story. Let us comply strictly and let us move from the bottom or the middle of the list up to those nations which are complying as fully as is necessary.

Deputy Mac Lochlainn rightly referred to other incidents that have been so damaging to us, including Ansbacher. Wearing my patriotic hat, I am very glad it has not travelled too far from these shores. I do not know if the Ansbacher people broke money-laundering laws, but they certainly moved their money out and broke exchange-control laws. Not only has none of them ever been sent to prison, none has even been charged with anything.

There were 120 of them. What message does this send out? It sends out the message that there is something pretty loose about compliance and enforcement in Ireland. People who pushed their money off to the Cayman Islands and elsewhere got away with it, but during a similar period those doing almost exactly the same thing, small operators who put their money in the United States to avoid DIRT at the behest or under pressure from the bank manager, were prosecuted. For years, Stubbs Gazette published all of those who put offshore what were small deposits compared to the Ansbacher people, who had made settlements and who had been prosecuted. They were named and shamed while the Ansbacher people made big payments and it was the end of the story, although they were participating in a massive tax evasion exercise. How did this happen? I do not know. Several weeks ago I asked the Revenue Commissioners about it at the Committee on Public Accounts and they spoke about the passage of time and that it would be difficult to do anything or prove anything, so they just took the money and did not think it was worthwhile prosecuting. Not one of the 120 people fiddling millions was touched. This is extraordinary. It sends out the wrong message. It sends out the message that we are not really a compliant nation and, of course, that if one is rich one gets away with evading tax but if one is poor one does not.

What is the story with casinos in this country? I am not anti-casino because I must confess to an extraordinarily wild youth when I spend half my life in casinos in my teens and 20s. Are they legal or illegal? Are they policed or inspected? Are they watched, because casinos are one of the main avenues for money laundering? People can put half their money on red and the other half on black, lose half of it and walk away with a cheque for the other half from the casino and it is properly laundered in this way. Casinos here seem to operate in a twilight zone of semi-legality. If they do operate in such a twilight zone does it mean they are not inspected because they are not legal, or are they rigidly regulated?

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