A Galway TD has condemned the multibillion euro fraudulent trading scheme known as ‘Cum-ex’ which was reported by a number of international media organisations yesterday.
Galway West TD Mairéad Farrell called on the Government to ensure that this is not another financial scandal where the participants are not held to account.
The two-decade-long scheme relates to a group of hedge funds and traders which carried out dividend tax-withholding fraud on a massive scale.
The scheme targeted European tax authorities, and involved Irish-based funds and banks.
“Before the last financial crash, this state was known as the Wild West of European finance. Has much changed since then?” asked Deputy Farrell.
“Davy’s, the Russian Laundromat, the FinCen files, Offshore leaks, and now the Cum-ex scandal, are all striking examples of business as usual.”
The Sinn Féin TD said that the 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,” she said.
“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.”
Deputy Farrell said that it is not a victimless crime as these kinds of schemes contribute significantly to growing economic inequality, while also undermining faith in the political and legal system.
“This state, whether wittingly or unwittingly, helped to facilitate this,” said the Galway TD.
“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.”