Sinn Féin spokesperson on Public Expenditure and Reform Mairéad Farrell TD has condemned a scheme, reported in today’s Irish Times and a consortium of international media organisations, who have revealed a two decade-long multibillion euro fraudulent trading scheme.
Known as the Cum-ex trading scandal, a group of hedge funds and traders carried out dividend tax withholding fraud on a massive scale for almost 20 years. The scheme targeted European tax authorities, and involved Irish-based funds and banks.
Teachta Farrell called upon the government and regulatory authorities to act, and to ensure that this was not another financial scandal where the participants were not held to account.
Teachta Farrell said:
“Before the last financial crash, this state was known as the Wild West of European finance. Has much changed since then?
“Davy’s, the Russian Laundromat, the FinCen files, Offshore leaks, and now the Cum-ex scandal, are all striking examples of business as usual.
“This Cum-ex trading scandal demonstrates how dividend withholding tax fraud took place on an industrial scale over two decades. European tax authorities were starved of up to €140 billion in tax revenues from this illicit scheme.
“Through a series of complex, co-ordinated and cross border financial transactions, whose large volumes overwhelmed European tax authorities, a whole host of financial institutions and professional networks were able to claim multiple tax refunds, for tax which was generally never paid in the first place.
“This is not a victimless crime. These kinds of schemes contribute significantly to growing economic inequality, by starving states of badly needed tax revenues. They also undermine faith in the political and legal system, as often few are held accountable.
“This state, whether wittingly or unwittingly, helped to facilitate this. Certain financial institutions and professional networks, through their use of anonymous special purpose vehicles, the tax code and regulatory system, benefited but at a cost to other countries’ tax bases.
“Ireland has incurred significant reputational damage in recent years. This is now another blotch on our record. It is high time the government and the regulatory authorities got serious and put an end to this hands-off approach.”
