The level of annual money laundering activity in Ireland is estimated to be at least €3bn according to a new report published today by Grant Thornton, an accountancy firm. The report - - Illicit Trade: an Irish and Global Challenge [pdf} - - says that while the 2010 Criminal Justice Act has improved the regulatory environment, money laundering activity remains a threat to Ireland’s reputation as a financial centre and is benefiting criminal gangs.
Globally the IMF estimates the aggregate size of money laundering at between 2% and 5% of the gross domestic product, which in Ireland means a low end estimate of €3.1bn up to €7.8bn at the high end of the range. The costs incurred to the economy from money laundering includes the loss of government revenue from taxation on counterfeit fuel, alcohol and tobacco and the cost of enforcement of legislation through money spent on Gardai and regulatory bodies.
Brendan Foster, Grant Thornton partner and report author, said: “Our research estimates that illicit trade in fuel and tobacco alone is as much as €337m, with much of this going into criminals’ pockets. Money laundering allows these illegal proceeds to penetrate the legitimate financial system. 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.”
The report builds on a similar study conducted last year which found that illicit trade in in the retail sector was costing the Irish economy as much as €1.48bn per year. A limited government response and continued weak penalties for violations of the law have meant losses have increased 3% in this year’s estimate to €1.53bn.
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