The European Commission has initiated a disciplinary process against Ireland for incorrect adoption of a revised anti-money laundering regulation. The Irish government has a sixty-day period to respond to the Commission’s official caution. Intriguingly, at the time Ireland was nominating itself to be the host of the EU Anti-Money Laundering Authority (AMLA), it wasn’t even adhering to the regulations that the organisation is tasked to enforce.
This matter is of considerable importance. When Minister for Finance Michael McGrath accompanied by Jennifer Carroll MacNeill, former undersecretary in the Finance Department, presented Ireland’s proposal to hold the AMLA in front of a European Parliament committee back in January, they were bombarded with numerous queries. Some were centred around living expenses and housing, but several revolved around Ireland’s alleged identification as a tax shelter.
For the last couple of decades, Ireland’s standing has been repeatedly tainted and continues to be controversial. Pre-financial crisis, Ireland was branded as the financial world’s “wild west” by The New York Times due to its laxly supervised jurisdiction, a view that was widely accepted after the economic collapse in 2008.
Vast amendments have been made to the country’s regulatory framework in the last ten years. There’s an ongoing debate that the regulatory gears have perhaps tilted excessively to the opposite end. As long as lingering doubts regarding Ireland’s financial regulations persist, striking the optimal balance will remain a tough task. Hence, being one of the three EU nations singled out by the European Commission for non-compliance with anti-money laundering norms is unhelpful and counteractive.
Money laundering has evolved into a complex illegal activity managed by international criminal groups involved in illicit activities like drug trafficking, illegal arms trade, human smuggling, and prostitution, to name a few. Nations must ensure their anti-money laundering policies are foolproof to prevent these gangs from exploiting any loopholes. Therefore, it’s imperative for Ireland to promptly address the issues raised by the European Commission.