By Paschal Donohoe, Eurogroup President and Ireland’s Finance Minister
WHAT strikes me from looking at the summit schedule is the number of different topics under discussion.
Among these issues are the need to balance information sharing with the right to privacy, the use of new technologies including artificial intelligence and cryptocurrencies, as well as specific crimes such as transnational fraud and human trafficking and slavery.
I will focus firstly on the emerging landscape in Europe, before placing that in its global context, and then talk a little about what we are doing in Ireland specifically.
One thing I would say at the outset is that at the forefront of all our minds is the current international economic outlook given the decision by the U.S. to seek a fundamental rebalancing of its relationship with the rest of the world.
However, as President of the Eurogroup, the European economy is resilient and prepared for the impact that this may have. Europe has navigated several shocks in recent years and has emerged stronger each time. We did this through Brexit, through the Covid-19 pandemic, through support to Ukraine following Russia’s invasion – and we will continue to work in partnership to meet future challenges.
Nowhere is this more true than in our efforts against financial crime.
Key focus – regulatory changes in Europe
A key focus of the summit agenda and discussions today is the rapid regulatory change taking place in Europe and how we are collectively working to strengthen our framework to combat financial crime.
I want to emphasise two points in relation to this.
Firstly, what these regulatory changes have at their core to is a strengthening of cooperation and coordination – through, for example, greater harmonisation of rules and easier sharing of information.
Secondly, due to the nature of the challenges we face, closer co-operation and co-ordination are two critical actions that need to occur on a wider international rather than just at a ‘regional’ European level. You will not be surprised to hear me say this is a message that resonates not only in relation to economic relationships but also in relation to financial crime.
Strategically this also presents an opportunity for Europe to set a global benchmark in terms of the supervision for anti-money laundering and counter-terrorism financing.
European cooperation – The EU Legislative Package
The new EU Single Rulebook for Anti-Money Laundering and Countering the Financing of Terrorism is clearly a landmark development that creates a strong toolkit for tackling these issues.
A core change to be introduced by the Single Rulebook is that key aspects of the legislation will move into a Regulation which will be directly applicable in all EU Member States, with the goal of harmonising these measures across Europe These include customer due-diligence requirements, obligations to record beneficial ownership information and the categorisation of obliged entities.
In addition to harmonising measures, this legislative package also expands the possibilities for information-sharing, which has long been identified as a challenge to effectively combating financial crime across and even within different jurisdictions.
The new AML Regulation provides for partnerships for information sharing, under which financial institutions, for example, will be permitted to share data such as suspicious transactions, identified risk factors and other forms of information relevant for the prevention of money laundering and terrorist financing.
While member States are still discussing how information-sharing will work in practice, the initiative has the potential to be a game-changing tool in how we fight financial crime.
Another element of the EU legislative package is a recast of the Funds Transfer Regulation so that its provisions, specifically to record data on the senders and recipients of funds, now apply to crypto-asset service providers.
It is essential to broaden the scope of the Funds Transfer Regulation beyond traditional forms of financial transactions to also ensure transparency of crypto asset transfers.
This innovation demonstrates the need to keep pace with the constantly changing technological environment.
Ireland is fully committed to the implementation of these changes to the EU framework and considerable work is ongoing here to give effect to them.
AMLA
The final key element of the EU legislative package is the Regulation setting up the new Anti-Money Laundering Authority, AMLA.
In this regard, I would like to extend my congratulations to the new Chair of AMLA, Bruna Szego, on her recent appointment. I wish her well with the important work she will carry forward in her new role.
Ireland fully recognises the importance of establishing a central body like AMLA for combating money laundering and the financing of terrorism at Union level. Therefore, I welcome the progress in the Authority’s establishment and the commencement of its important operational functions. I look forward to receiving updates on its work over the coming months and years in this important area of work.
Obviously, AMLA has got exceptionally well-qualified people at the helm, but it is a point of particular significance for Ireland that, in Derville Rowland, one of our most experienced regulators has been selected for one of these positions.
As AMLA becomes operational, I expect that we will see both significantly enhanced cooperation between national Financial Intelligence Units and changes in the approaches taken by supervisors on foot of AMLA guidance, leading to more effective outcomes.
I look forward to seeing the positive impact the Authority will have on the EU’s approach to countering money laundering and terrorist financing, in particular. I know it will probably be a couple of years before some of these impacts can be determined, but my expectation is that we will see measurable improvements at pace, across the EU as a whole, in how we tackle financial crime.
Global cooperation and coordination
Important as these developments within the EU are, we all know that our world is hyper-connected, nowhere more so than in the international financial system. Therefore, improvements cannot be isolated to any one country or region and progress in fighting financial crime can best be achieved with an expert-led, international approach.
Bodies like the Egmont Group of Financial Intelligence Units and the Financial Action Task Force play crucial roles here.
The Financial Action Task Force, or FATF, is the body with which I have the most engagement in my role as Minister for Finance. As you are all aware, it sets the international standards for anti-money laundering and countering terrorist financing.
In this way, it plays a key role at a global level in creating a common framework and in strengthening cooperation and coordination.
The range of work underway at that body at any one time is fascinating but I would like to highlight a few matters in particular for this audience.
Firstly, amongst the issues agreed at the most recent FATF Plenary in February were changes to the FATF Standards to better support both a risk-based approach to their implementation and also financial inclusion.
This is important for developing economies in particular, as limited access to formal financial services can lead to greater reliance on unregulated channels.
Ireland has been fully supportive of these efforts to strengthen financial inclusion and thus of the steps to revise the FATF Standards.
I hope that those of you who work with these standards took the opportunity to contribute to the recent public consultation on this matter. In itself, this consultation demonstrates a commitment to dialogue between the public and private sectors which is essential for progress here and which is exemplified by events like today’s summit.
The second project I wanted to highlight is one which the FATF publicised recently with the launch of a Report on using financial intelligence to detect and disrupt online child sexual exploitation.
This is obviously a very difficult subject, but it is commendable that the FATF took the lead on examining how using a ‘follow-the-money’ approach can be used to investigate and prosecute those engaged in such crimes.
If you have not read that Report, I strongly recommend you do so to see how your organisations, particularly those in the private sector, can implement its recommendations. I would also like to acknowledge the expert contribution made by An Garda Síochána to that project.
Thirdly, I would note the ongoing work taking place to ensure the FATF standards remain fit for purpose as technology evolves. This is particularly challenging with the rise in use of cryptocurrencies and considerable work is going to have to continue in that space to ensure we have effective regulation.
The nature of such technologies makes them a prime example of where a coherent, consistent international approach is needed.
Ireland is proud to be a longstanding member of the FATF and, as a jurisdiction with a significant financial services sector, is committed to shaping and implementing robust standards so as to protect the international financial system from being misused and corrupted.
National cooperation and coordination
Moving from the global stage, closer co-operation and co-ordination must be reflected at a national level also.
The key mechanism for cooperation and coordination in this field at a national level in Ireland is the Anti-Money Laundering Steering Committee, which is chaired by my department.
For those of you unfamiliar with its work, the Steering Committee provides a national, cross-sectoral forum for the oversight and active review of Ireland’s framework for combating money laundering and the financing of terrorism.
This national framework monitors the relevant environments to identify and address current and emerging challenges facing both the public sector and the private sector.
Apart from my own Department, the AMLSC includes the Department of Justice, the Central Bank, An Garda Síochána, the Criminal Assets Bureau, as well as private sector representatives.
Among its current activities, an update of Ireland’s National Risk Assessment (NRA) for money laundering and terrorist financing is currently underway. This is a hugely important piece of work, as money laundering and terrorist financing can only be effectively tackled if the risks to which a jurisdiction is exposed are better understood.
A lot of work is being done by the members of the Steering Committee on the NRA at the moment and the outcomes of that are expected to inform our national policies in this area.
Apart from undertaking this important stock-take of our AML and CFT regimes, the National Risk Assessment provides a critical preparatory process for Ireland’s next FATF Mutual Evaluation Report (MER) that commences in 2027. Many of those present here today were either involved in Ireland’s last MER in 2017, are currently covered by the NRA or have experience of MERs in other jurisdictions. As such, you are fully aware of how important this work is, and I appreciate the help and advice that you are providing to the officials charged with leading this work.
Broader outlook
Finally, I would like to share a few thoughts about the broader outlook we face today. It is important to acknowledge that for all of the strengthened co-operation and co-ordination I have described at a global and European level in combating financial crime, this is happening against a backdrop of increased global uncertainty and instability.
The situation in Ukraine is one example of this instability but also provides a great example of close international co-operation, specifically in the use of restrictive measures or sanctions as they are more commonly denoted.
Sanctions
As you will be aware, in the wake of Russia’s illegal invasion of Ukraine in February 2022, the sanctions landscape has changed dramatically. Since the outbreak of the war, the EU has agreed and implemented sixteen packages of sanctions against Russia and negotiations are now ongoing on a seventeenth package.
Ireland is fully committed to supporting Ukraine and believes that the effective implementation of EU sanctions against Russia is an important tool in the EU’s arsenal to support Ukraine. To date, just over €2 billion in Russian assets held in Irish credit and financial institutions has been frozen.
As EU measures have developed, focus has turned to preventing circumvention, as well as ensuring the effective implementation and enforcement of the measures.
As ever, co-ordination and information sharing with our international partners, and between the public and private sectors, is critical to ensuring the effective implementation and enforcement of EU restrictive measures.
International order
Beyond the situation in Ukraine, it is clear that the global economic landscape we are facing into is changing and the ‘new normal’ is likely to be very different from what we have been used to over past decades.
Europe stands as a source of predictability, stability and transparency. Our strong fundamentals and sound policy frameworks are well understood and valued by our international partners, citizens, businesses and financial markets. This is crucial in times of heightened uncertainty.
Ireland remains committed to a rules-based international order and to working with our international partners. Nowhere is this more true than in the fight against financial crime.
It is essential to remember that serious and organised crime is fundamentally about money. Those engaged in this activity create misery for many people, often the most vulnerable individuals in our society. But because it is fundamentally about money, targeting the money through sharing information, use of financial intelligence and confiscation of assets is what can and does break those engaged in such crime. That is the challenge everyone here has accepted, and I reaffirm the Government’s commitment to this.
- The text is from the address delivered by Paschal Donohoe at the ‘European Anti-Financial Crime Summit 2025’
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