From the Editor

From The Editor: Running With the Big Dogs

By Kieran Beer

“Dublin’s going to the dogs,” a Dublin cab driver told me in 1982. He then proceeded to give me a tour of what were, by his reckoning, the city’s many travesties and blights as we made our way to the train station.

I was born in Ireland, but lived in New York at the time (still do), so I knew that if Dublin was going to the dogs, New York could have been said to be going to the wolves.

Much has changed—for both Dublin and New York. 

With a population of fewer than 5 million people, Ireland’s place in the world as a global financial center is an accomplished but still amazing fact. Not even the Great Recession changed that. At considerable cost, Ireland shook off those challenges more quickly than some other European states and even during the worst of it never fell back to the dog days.

The nation is now the fourth-largest exporter of financial services in the European Union and makes the International Monetary Fund’s list of 29 most important global financial centers. Ireland’s importance is set to keep growing for a number of reasons, including the addition of more financial jobs as U.K. financial institutions hire in Dublin as a result of Brexit. 

The ACAMS Anti-Financial Crime Symposium in Dublin on October 19 reflects Ireland’s global connections: in six panel sessions, we will discuss Ireland’s adoption of the Fourth Anti-Money Laundering Directive, its sanctions compliance risks, challenges posed by Fintech, and more. More

But its Ireland’s global connections that also elicited the most concern from Financial Action Task Force examiners who authored the intergovernmental group’s mutual evaluation report, or MER, last month on the country’s anti-money laundering and counterterrorist financing measures. More

The one noncompliant grade that Ireland received was for FATF recommendation 19.

“Ireland does not have measures which require applying enhanced due-diligence measures, where a transaction or business relationship involves a country or is linked to a country, for which the FATF has called for its member to apply enhanced due diligence,” the group said in the report.

With the rise of Fintech and Ireland’s desire to be a power in financial innovation, it is important to note that the MER found the technological sophistication of its financial intelligence unit wanting.

“Issues relating to the abilities and resources of the FIU identified in the last mutual evaluation persist, including its lack of sophisticated IT software which means there are limits on its ability to undertake strategic analysis,” the report states.

The report does say that steps are being taken to address these issues, and that the country has indeed made strides in many areas since the last FATF evaluation.

The many conclusions of the evaluation also needs to be read in context.

While Ireland received no “high” ratings for its compliance with FATF’s 11 effectiveness standards, it also was not assigned any “low” scores. The country instead received “substantial” and “moderate” scores for all 11 of the standards.

That compares with the United States and Canada, each of which received one low rating (the United States also received four high ratings, whereas Canada got none).
 
Of FATF’s 40 technical recommendations, Ireland was deemed “compliant”—the highest rating, with 10, “largely compliant” with 16, only “partially compliant” with 13, and “noncompliant” with one: recommendation 19, as discussed above.

In contrast, the United States received four noncompliant, six partially compliant, 21 largely compliant and nine compliant grades. Canada for its part received five noncompliant, six partially compliant, 18 largely compliant and 11 compliant ratings.

All of this is to say that Ireland is certainly not going to the dogs, but running with the big dogs, and, like all participants in the global financial marketplace, having to up its game in regard to fighting financial crime.

It will be interesting to see how it plays out, but if past is any sort of prologue, Ireland will rise to the challenge.

kbeer@acams.org
Follow me @KieranBeer on Twitter

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