Mairead Farrell (Galway West, Sinn Fein) | Oireachtas source

This is an interesting week to be discussing this particular Bill and these considerations. At the start of the week we had the latest revelations of shady practices within the global financial system involving many top global institutions. The so-called FinCEN Files of approximately 2,500 leaked documents involving about $2 trillion of transactions have revealed how some of the world's biggest banks have allowed criminals to move dirty money around the world. They also showed how Russian oligarchs have used banks to avoid sanctions that were supposed to stop them bringing money into the West. It is the latest in a string of leaks over the past five years that have exposed secret deals, money laundering and financial crime. We have had the Lux Leaks, the Panama Papers and the Paradise Papers in addition to a whole host of other leaks, all of which have revealed massive tax avoidance and evasion, money laundering as well as other criminal activities.

On Sunday, The Irish Timesnoted that a network of bank accounts was used over a number of years to move an enormous amount of capital out of Russia into the West. The banks involved included one near Moscow that had a cousin of the Russian President, Vladimir Putin, as one of its directors. As The Irish Timespointed out, some of the bank accounts that made up the network were in the name of British shell companies provided by a company services group located in Dublin. For most people that sounds unusual. Ireland is about the farthest European country from Russia, yet we have this article in The Irish Times, and Ireland is mentioned also.

According to new research from Trinity College professors James Stewart and Cillian Doyle, between 2005 and 2017 there were 106 Irish registered shell companies connected to some of Russia's largest state-owned and private companies which raised gross funds of approximately €118 billion, making Ireland one of the main jurisdictions for the raising of these funds. In terms of net debt flows, Ireland was the second highest EU jurisdiction, just behind Luxembourg. These type of shell companies have raised enormous sums of money for different companies which have been alleged to have engaged in serious wrongdoing. Some of them have been subject to economic sanction. Some have been identified as having engaged in insider trading and market manipulation, while several recently collapsed Russian banks were accused of creating fictitious loans, defrauding customers and then requiring bailouts.

What is common to all these Irish shell companies is that they all availed of the section 110 tax concession, meaning their effective rate of tax was zero or near zero, and they generally use complex, anonymous trustee ownership structures. The Criminal Justice (Money Laundering and Terrorism Financing) (Amendment) Bill looks to bring greater transparency. Specifically, we need greater transparency around beneficial ownership of company assets. In other words, it helps us demonstrate who owns what. The problem, however, is that it allows trustees to be listed as beneficial owners even when they are often acting as an intermediary for the ultimate beneficial owner and therefore they provide a layer of secrecy that criminals can seek to exploit. That is my biggest concern about it.

See this speech in context