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Chapter 1: What is the new government crackdown on money laundering targeting?
First this morning, luxury retailers, crypto platforms and online betting sites are all targeted in a new 30-point government crackdown on money laundering. Under the action plan, shops selling high-end goods will be urged to flag big spending customers who may be using cash to hide criminal wealth.
Joining me to discuss how this will work in practice is the former head of the Garda National Economic Crime Bureau, Pat Lorden. Pat, good morning to you.
Good morning, David. How are you this morning?
Very well, thank you. Let's start with these luxury shops. We're talking about designer clothes, handbags, watches. Why does the government have them in their sights?
Chapter 2: How are luxury retailers involved in money laundering schemes?
The reason they're in their sights is a lot of our organised criminals and our regular local criminals are utilising these shops and these premises to launder their money. And we've seen this occurring for a number of years now. Already watches and cars and boats and a lot of those areas come under the legislation.
But it's great to see that it's been extended out further to cover luxury goods like handbags and everything else.
OK. Is it realistic to expect retail assistance to police international money laundering?
Yes, I think it is. The banks had to do it. The credit unions had to do it. Solicitors, auctioneers and everybody else has to do it. So as we get better at doing our job in all the jurisdictions, the criminals will move to the lesser areas that are being patrolled, I suppose, and watched. So it is important. If they're turning over a lot of money, they need to be in a position to report it.
Okay. So say, for example, I wander into a shop with a big wad of cash and put it down for a luxury watch or a handbag or whatever, what would happen then?
Well, really what happens at the moment in a jeweller shop in Dublin... They're supposed to source out where you've got the money. Have you got the wherewithal to have this amount of money? And if they don't believe that you're legitimately in possession of this money, they should report it to FIU Ireland through the GoAML platform, which is in existence now for five or six years.
Okay. And then presumably Guardi will follow up on that, will they?
Yes. What happens is all of these reports, they're called suspicious transaction reports. All of these reports go into FIU Ireland and in tandem they're sent to Revenue. So we're one of the only jurisdictions globally that it goes to both parties. It's assessed by revenue from their point of view and it's assessed from FIU Ireland from the Garda point of view and the national point of view.
And then it is sent out as intelligence to the relevant authority, whether that's drugs and organized crime, economic crime. human trafficking, or any of the other areas of In Garda SĆochĆ”na.
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Chapter 3: Is it realistic to expect retail shops to assist in policing money laundering?
And the idea to tackle this is what's called a closed loop system for gambling. Could you explain that to me?
Yes, it is important that we have a system in place, definitely in Ireland, that If I place a bet of a million euros on something and I win very little money or lose some money and I now have 800,000 paid back to me from that bet, it's very important that that money goes back to me and not to somebody else. Because a lot of these gaming platforms and gambling platforms are not a closed loop.
The money and the tokens can be drawn out by somebody else in another part of the globe.
Okay, so obviously that would be a way of transferring funds without having to go anywhere near the banking system.
Absolutely, absolutely.
Okay. There's also talk about greater transparency around company ownership. How big a problem are shell companies in Ireland right now?
I think shell companies are still a big problem, both in Ireland and across a lot of other jurisdictions. And we need to tighten up on ownership and who's behind the ownership. The directors need to be transparent. The documentation needs to be checked. I'm not so sure if we're doing as good a job as we should be on checking who the directors are of each company.
And it is a challenge for our authorities to do that. But I think we need to make a better effort. The UK as well is very similar. They're struggling at the moment with companies housed in relation to who owns which company and who's behind it. And we see regularly companies are set up and just left sit there for years and years and years and then utilized for some type of fraud down the road.
It sounds very complicated and it sounds very labour intensive to kind of drill down into all those sort of things, doesn't it?
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Chapter 4: What happens when a customer pays cash for luxury goods?
And that risk is still there because in terrorist financing, the amount of money required to carry out a terrorist attack is quite small. So the charity regulator needs to be on top of that and needs to be going into the companies and checking them out that they have systems in place to ensure that the money that goes from Ireland to any of these jurisdictions is going to the right place.
And I know there's great work being done by a lot of the bigger charities, but I do worry a little bit about some of the smaller charities that are out there. They really need to be switched on to the risks that are out there and supply chains that they're purchasing from in some of these countries. and even people they're employing in some of these countries.
Are they there for a legitimate reason? Are they for the purpose of terrorist financing?
Right. Pat, you ran the Economic Crime Bureau within An Garda SĆochĆ”na. Does this plan, 30 points in it, does it fill you with optimism?
It gives me hope. We're up, as a country, we're up for a review by the Financial Action Task Force over the next two years. And I think it's a great step forward by the TƔnaiste and the Minister to highlight financial crime in particular. It cannot be removed from the money laundering and money laundering generally. So I think it's a good step forward.
But the important thing here, we can have a 30-point plan, but we need to have the resources and the technology to deal with it. So in other words, once I identify you as a money launderer, I need to have the capability of going out, searching your premises and then arresting you, charging and bringing before the court. And that needs to be done quickly. And at the moment,
A lot of the cases are taking a little bit longer than they should be.
And in the case of dodgy money, say you've identified me as a money launderer and you go after me and you manage to prove that that's the case and get my ill-gotten gains off me. The state gets to keep that, does it?
Yes. the Economic Crime Bureau and all of the other bureaus would work very, very, very closely with the Criminal Assets Bureau. So if the money is not frozen and seized by the court and given to the state, the Criminal Assets Bureau can have a second bite at the cherry. So yes, the laws are brilliant in this area. The laws are excellent. The laws are very, very good.
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