The Republic has emerged as a hub for shell companies used in large-scale cross-border tax fraud and money laundering, according to Andrés Ritter, deputy chief prosecutor at the European Public Prosecutor’s Office (EPPO). Because the Republic remains one of three EU states outside the EPPO, investigators report that their ability to track criminal financial networks is incomplete, as the State’s corporate tax regime is leveraged by criminal networks to facilitate VAT “carousel” fraud.
Why is Ireland a target for criminal financial networks?
Criminal networks utilize the Republic’s corporate tax structure to incorporate “bogus” entities, according to Ritter. These shell companies serve as conduits to wash dirty money and defraud European tax authorities. In a typical “carousel” scheme, products are “sold” along a spring of connected shell companies and fronts set up across several countries. This process obscures the fact that VAT was not paid, allowing criminals to fraudulently claim VAT refunds from tax authorities before the goods are sold on the market.
Up to a fifth of investigations into these complex fraud schemes uncovered links to organised crime groups, according to the EPPO.
What are the consequences of non-membership in the EPPO?
The EPPO has been in operation since 2021, tasked with investigating complex financial crimes that span several European jurisdictions. Because the Republic is not a member, EU investigators based in Luxembourg face hurdles in gathering evidence. Ritter stated that while investigators’ ability to fully map out certain criminal operations remained “incomplete”, given that the State was not a member of the EU body.
Department of Justice figures show that the Republic received more than 50 requests for information and assistance from the EPPO between 2021 and late 2025. Approximately 15 requests had been made to Irish authorities last year. Ritter noted that this volume would be “much higher” if the State were an EPPO member because information sharing across jurisdictions would become much easier.
How would joining the EPPO change investigations?
If the Republic joins the EPPO, the body would likely establish an office in the Republic staffed by two or three Irish prosecutors. These officials would possess the authority to undertake criminal investigations and charge people in the Irish courts, similar to gardaí. Ritter emphasized that this would allow investigators to see the “full picture” of criminal operations, rather than relying on fragmented data.
Pro Tips: Understanding Financial Crime Tracking
- Follow the money: Effective anti-money laundering (AML) strategies focus on the financial trail rather than just the physical assets.
- Inter-agency cooperation: Cross-border transparency is the primary tool for disrupting “carousel” VAT fraud.
- Regulatory alignment: Membership in specialized bodies like the EPPO streamlines the legal exchange of evidence between jurisdictions.
What is the current status of Ireland’s potential membership?
The Government has tasked officials with preparatory work to assess the impact of joining the EPPO. Jim O’Callaghan previously cited the complexity of integrating the State’s common law system with the EU investigative framework as a hurdle. However, the State has indicated it might be in a position to request to join the EU investigative body next year, according to Ritter.
Frequently Asked Questions
- What is the EPPO?
- The European Public Prosecutor’s Office is an EU body in operation since 2021 that investigates complex financial crimes, such as VAT fraud schemes spanning several European jurisdictions.
- Why is Ireland not currently a member?
- The Government has cited the complexities of aligning the State’s common law system with the EPPO’s structure, though preparatory work for potential future membership is ongoing.
- What is a “carousel” VAT scheme?
- It is a fraud method where products are “sold” along a spring of connected shell companies and fronts set up across several countries to obscure the fact that VAT was not paid, while the participants simultaneously claim fraudulent VAT refunds from tax authorities.
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