By Vish Gain for AMLi
A recent review has found that Ireland, one of Europe’s financial centres that hosts big tech and pharma companies, has inadequate staffing and funding for its economic crime units, potentially tarnishing its reputation as an attractive financial hub.
The review, headed by former Director of Public Prosecutions James Hamilton, found that some key Garda (Irish Police) economic crime units are in a worse condition than they were 30 years ago. It states that while the fraud squad in 1992 had 45 permanent staff members, there were just 31 permanent staff members working in the Garda National Economic Crime Bureau (GNECB) in 2019.
This is in light of the fact that the fraud squad in 1992 was deemed inadequate for its time and economic crimes since have increased manifold.
The review identified “inadequacies” related to funding and staffing in several Garda units including the anti-corruption Unit, Payment Card and Counterfeit Currency Unit, and the Financial Intelligence Unit. The Terrorist Financing Intelligence Unit and the Money Laundering Investigating Unit were also found to be “under-resourced”.
The Irish Times reported on the story after Irish Minister for Justice Helen McEntee announced in a statement her plans to “tackle white-collar crimes” based on the review findings.
The new cross-government plan is set to tackle economic crimes and corruption by:
- Vesting greater powers in the hands of investigative agencies
- Reforming the Ethics Acts to address breaches of ethical obligations that come to light after Oireachtas (Parliament) members have left office
- Giving An Garda Síochána (Irish Police) search warrants to access passwords to electronic devices
“Ireland has a hard-won reputation as an attractive destination for foreign direct investment and as an international business hub,” said McEntee.
Echoing the review’s view that Ireland’s position as a financial centre is at risk, she added: “Stepping up our efforts to tackle white-collar crime will show we are serious about maintaining and building upon that reputation.”
She also said that all businesses should be able to operate “safely and securely” as more economic activity goes online, a trend that has been necessitated and accelerated by the Covid-19 pandemic.
“Consumers too should know they can safely pay their bills, shop and do so much more online,” she said.
Reputation at stake
Ireland has long been an attractive destination for foreign investment. Major tech and pharma companies have their European headquarters in the Western European island country, including social media giants Twitter and Facebook, as well as the pharmaceutical company that won the vaccine race, Pfizer. This is largely attributed to its low corporation tax rate of 12.5%, one of the lowest in Europe.
Enterprise Ireland, the Irish government’s body responsible for the growth of Irish business abroad, estimates that funds administered by Irish-based companies are valued at approximately €1.8 trillion.
However, with the increase in global financial crimes and cybersecurity threats exacerbated by the pandemic, multinational companies are now increasingly vigilant of financial crime regulations and risk assessments.
The review states that new payment opportunities have increased the risk of economic crime, both domestic and international, and that “economic crime, especially of the cyber-enabled variety, is relatively unimpeded by jurisdictional boundaries.”
“In the absence of effective measures to prevent, investigate and prosecute corruption in this sector, Ireland’s position as a major financial service centre could be called into question to the detriment of our national interest,” the review says.
“A number of high profile international Covid-19 cyber-related fraud investigations have already been embarked on by the GNECB with one involving a transaction by the German authorities to purchase face masks with an approximate value of €15 million.”
The stark vulnerabilities highlighted by the review in Ireland’s ability to identify and prosecute financial crimes come as bad news for foreign investments as fraudulent attacks continue to evolve and get more sophisticated.
Only a structural change informed by best practice in other EU countries and a significantly increased budget for Ireland’s financial crime units can embolden its position as a lucrative destination for investment in Europe.
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