AS MUCH AS €5.4 billion was laundered through Ireland in 2012, according to a new report from Grant Thornton.
The report advises that “the implementation of strong anti-money laundering (AML) legislation” is key to stopping this.
Improved reporting mechanisms are also required to highlight just how much of an effect it is having on the economy.
The scale is generally estimated to be between 2 and 5 per cent of Gross Domestic Product (GDP), equating to between €3.1bn and €7.8bn in Ireland.
The report also suggests that the illicit trade in Ireland “shows no signs of abating”, and cost the economy an estimated €1.48bn in 2013 alone.
This could rise to €1.58bn this year.
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“Our research estimates that illicit trade in fuel and tobacco alone is as much as €337m, with much of this going into criminals’ pockets,” Report author and Grant Thornton Partner Brendan Foster said.
Money laundering allows these illegal proceeds to penetrate the legitimate financial system.
He also raises a warning about the use of virtual currencies to fund this.
“New threats such as the unregulated nature of payments with virtual currencies such as Bitcoin also pose new challenges to controlling what is a global problem,” he added.
Using data from the Irish Payment Service Organisation (IPSO), the report also highlights that while there was a fall in online payment fraud in Ireland in 2012, the exact cost to the economy of cybercrime is still hard to quantify.
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It’s key findings in this area were:
The report also urges government to introduce reforms to protect intellectual property rights.
These are key to sectors such as entertainment and pharmaceutical sectors, with 23 per cent of employment located in these sectors contributing 50 per cent of our GDP, 13 per cent above the European average.
Click here to see a larger version. (Image Credit: Grant Thornton)
“Digital piracy of movies, production of counterfeit CDs, smuggling of illicit tobacco and alcohol are all examples of intellectual property (IP) abuse that hurt the Irish economy,” Foster said.
We recommend that a committee be established of both industry and state interests which would have direct responsibility for tackling the issue of illicit trade and IP protection.
The report also polled a number of consumers and retailers on illicit trade.
77 per cent said it was “easy to buy illegal tobacco”, with 72 per cent of retailers believing that the government’s response to illicit trade has been too little.
Last year, Revenue seized over 40 million illict cigarettes, 50 million less than 2012.
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