Money Laundering Risks and Liabilities

By Michael Ashe and Paula Reid Round Hall Sweet & Maxwell

Money laundering is as old as money itself but only recently has it been covered by specific legislation in the Republic. In tandem with business, crime is going global and the disguise of criminal profits is becoming more sophisticated.

E-commerce makes the picture more complex as transactions on the Net can be performed by individuals anywhere.

Business needs to be aware of the dangers of getting caught in the money laundering web. The legitimate professional can get involved accidently.

Michael Ashe and Paula Reid stress money laundering poses a danger to the Irish financial services sector. Institutions at risk include banks and stockbrokers, building societies and life assurance firms - even credit unions.

Compliance procedures are designed to protect the financial and professional services sectors. The procedures must, the authors state, be viewed as an integral part of good business practice and kept high on the agenda.

An extreme example of international money laundering is provided by BCCI - Bank of Credit and Commerce International - which collapsed in 1991 with operations in more than 70 countries. It had 3,000 criminal customers and financed gun running, drug trading and terrorism.

The authors point out: "Money could be recorded as going to Switzerland as a loan, from Switzerland to Grand Cayman as repayment of an old loan, and from Grand Cayman to London as newly received cash from the sale of stock in BCCI itself."

Money Laundering aims to be a guide for Irish financial institutions to the potential risks. Michael Ashe and Paula Reid succeed in this task by producing a comprehensive and well-written study.

The compliance regime established by the Criminal Justice Act 1994 and the powers of the Criminal Assets Bureau are analysed. Practical steps are outlined on how organisations can respond to Garda confiscation orders and search warrants.