Compliance Institute was featured in media coverage in the Business Post both online and in print (see below).
Business Post: From favourites to fifth – how Ireland lost out on the EU’s anti-money laundering agency
In October, the mood music around Ireland’s chances of hosting a major European Union authority was positive but despite a year-long campaign, its bid team ultimately came up empty-handed.
The European Union anti-money laundering agency (Amla) is being created to detect and combat suspicious cross-border transactions.
Ireland led a fervent campaign, headed up by Michael McGrath, finance minister and Jennifer Carroll MacNeill, the junior finance minister, who hoped to promote the country on the EU stage and secure 400 jobs in Dublin.
The Department of Finance’s bid appeared to be making headway as a poll in October had Dublin as favourite for the agency. In a week-long poll, AML Intelligence, surveyed 2,225 people and 25 per cent voted for Dublin, with Madrid second at 20 per cent and Luxembourg at 13 per cent.
In the end, the Germans won out in their bid to have the agency located in Frankfurt, the financial centre which already plays host to the European Central Bank (ECB).
In response to the result, commentators including Enrico Aresu, a director at Moody’s Analytics, said it made sense to have the Amla in the same location as other major institutions such as the ECB.
This is the exact opposite argument Irish ministers were making, as they felt institutions should be more spread out throughout the nations within the European Union.
“This was a missed opportunity and is hugely disappointing,” said Michael Kavanagh, chief executive of the Compliance Institute, Ireland’s professional body for compliance professionals.
He said it “sends the wrong signal to smaller countries who despite their unique capabilities and expertise, often lose out to the larger and more powerful European nations.”
Eurovision-style voting
Not only did Ireland miss out on Amla, it did so by a wide margin. In fact, it got no votes in the final reckoning.
According to sources familiar with the process, how the voting was structured - with both the EU council and parliament involved - played a big role in Ireland’s loss.
It was a complicated process as it was the first time the European Council and the European Parliament agreed.
Votes in the council passed through various stages. In the first round countries each appointed their top three candidates, with the top position getting three points in what has been described as a Eurovision-like voting procedure.
Frankfurt, Paris, Rome and Vilnius passed the first round in the European Council, with Frankfurt top with 49 votes, Paris with 28 votes and Rome and Vilnius tied at 19. Ireland fell just behind with 15, knocking it out of the running.
Despite receiving a reasonable level of preliminary support, Ireland failed to secure critical pole position spots as countries gave their first preferences to critical defence and trade partners.
According to sources, Ireland stood a good chance at emerging victorious had it made it into the second round as several smaller countries would have rallied behind it.
As it was, Ireland failed to do so and came up empty-handed from the council.
In the final round of the secret ballot between the two bodies Frankfurt received 28 votes, Madrid 16, Paris 6, and Rome 4.
Backroom deals
A big part of the loss for Ireland, according to sources, was down to backroom deals which dominated the process on the council side.
Some people said that Ireland was seen as already punching above its weight, with Mairead McGuiness serving as European commissioner for financial stability and Pascal Donohoe as Eurogroup president.
Consequently, some said, Ireland wasn’t regarded as needing a major European institution too.
Other commentators reportedly suggested that one of the trade-offs was that Ireland would not host Amla, but Donohoe would receive backing to become head of the International Monetary Fund (IMF).
Speaking to the Business Post on Friday MacNeill expressed her disappointment with loss. The junior minister for finance was the main campaigner and has spent months traversing the continent trying to gain votes. She recollected that on one day she was in five countries in 24 hours.
While Ireland did not secure the victory, she is adamant the process was positive.
“We garnered the support of all the government, industries and bodies for this campaign,” she said. “We travelled all over Europe building relationships and anyone in politics or business can tell you just how important relationships are.”
The Compliance Institute’s Kavanagh said that he expected Ireland would continue to “ play a pivotal role” in the new watchdog and the fight against financial crime.
“Ireland has a wealth of compliance and financial crime professionals – on whose expertise the new AMLA will no doubt call upon,” he said.
“As the only EU country that offers a dedicated professional designation for the financial crime professional, Ireland is uniquely placed to offer the required expertise to the new authority.”
Deirdre Carwood, the head of financial crime at Deloitte Ireland, said Ireland would continue to play a significant role in combating financial crime but added that lessons should be learned from the Amla process.
“As Ireland is a hub for international finance and global technology, understanding and addressing any issues or weaknesses identified through this process is a vital next step, and remaining focused on collaboration between government and relevant industries to position Ireland as a frontrunner for the next opportunity,” she said.