Peter Fitzpatrick (Louth, Fine Gael) | Oireachtas source

I will talk about the process of money laundering and terrorist financing and the activities involved, which are important for people to know about. It is also important to know about the lives that have been destroyed, about the businesses affected and those who are used to do this. I will also talk about the money created and the money lost to the Exchequer. It is very important for people to realise what is actually going on.

Money laundering is the process by which criminals disguise the illicit origins of their funds. It allows them to conceal the evidence of their crimes and to use the proceeds in legitimate financial systems and markets. The global extent of money laundering is, by its nature, difficult to estimate. The UN Office on Drugs and Crime suggests that dirty money constituting between 2% and 5% of global GDP, which represents sums ranging from $800 billion to $2 trillion, is laundered throughout the world every year. A 2015 report sponsored by the EU estimates that organised criminal activity in the EU generates revenues of at least €110 billion annually. The crimes which generate the funds being laundered are known as "predicate offences" and vary within countries depending on the nature of the national economy, legal system, social conditions and geography. Predominant offences include drug trafficking, human trafficking and exploitation, theft, illegal firearms smuggling, gambling, counterfeiting, online crime and tax fraud and evasion.

The means used to launder the proceeds of crime are equally varied. Common techniques include investment in land and buildings, the purchase of high-value goods such as jewellery and art, which are easy to transport and sell, and the use of cash-centred front businesses such as betting shops, retail outlets and public houses. This is what I mean when I refer to ruined lives. There are decent people in betting shops, retail outlets and pubs. People do not realise the abuse that takes place. New technologies have allowed criminals to exploit prepaid credit cards, online betting, cash transfer system and untraceable cryptocurrencies such as bitcoin.

Money laundering is essential for organised crime. The vast sums generated by criminal activity can be much too large to recycle entirely in the underworld. Without access to legitimate financial systems and markets, those funds can simply lose their value. Significantly, money laundering not only allows criminals to fund further criminal activities, it also enables them to expand and diversify, spreading corruption and instability through commercial, financial and political institutions. Money laundering poses serious risks to Irish people and businesses and to the State. The Government's national risk assessment in respect of money laundering and terrorist financing cites a 2015 study on the financial aspects of organised crime in Europe which estimated that the level of money laundering in the State in 2010 amounted to €1.7 billion. The national risk assessment identifies money laundering risks arising from numerous types of crime, including drug offences, financial crime, tobacco smuggling, tax evasion, prostitution, fuel laundering, cybercrime and corruption.

Terrorist financing is often similar to money laundering. Terrorist groups frequently raise money using common criminal methods such as robbery, fraud and extortion and they face the same difficulties as ordinary criminals in making use of the proceeds. In many cases, however, terrorist financing relies on ostensibly legitimate sources of income such as personal donations or contributions to what are represented to the public as charitable bodies. Such financing operations can be the reverse of money laundering in the sense that they involve moving apparently legitimate funds into illegitimate channels without detection. Terrorists use many of the same techniques as money launderers, including front businesses, cash smuggling, the purchase or theft and resale of high-value retail goods and multiple small cash transactions through supporters' accounts or prepaid credit cards.

I welcome the Bill and the changes it will make, including the obligation placed on certain financial institutions to register with the Central Bank so that it has a full list for supervisory purposes. I also welcome the requirement to examine the background and purpose of complex or unusually large transactions. An illegal cigarette factory was recently discovered in my home town, Dundalk. Officers from Revenue and the Garda did a fantastic job and arrested 11 people who were manufacturing 250,000 cigarettes per hour. It was estimated that approximately €12 million was lost to the Exchequer. Whatever it takes to combat money laundering and terrorist activity must be done. I support the Bill.

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