Ireland's Minister for Financial Services in Luxembourg to Lobby for AMLA Seat

On Tuesday 19 December 2023, Ireland's Minister of State at the Department of Finance, Jennifer Carroll MacNeill, paid a working visit to Luxembourg.

Minister MacNeill visited Luxembourg's new Minister of Finance, Gilles Roth, with the primary aim of promoting Ireland's bid for the seat of the new Anti-money-laundering authority (AMLA), a new EU authority to counter money laundering and the financing of terrorism

On Monday 18 December, the European Council and European Parliament representatives reached a common understanding on the process for selecting the seat of the future European authority. Regarding the location of the authority, the Council and the Parliament have worked together to ensure a selection process that is transparent, fair and equitable to all candidates.

Nine Member States submitted applications to host AMLA: Belgium (Brussels), Germany (Frankfurt), Ireland (Dublin), Spain (Madrid), France (Paris), Italy (Rome), Latvia (Riga), Lithuania (Vilnius) and Austria (Vienna).

The co-legislators agreed on the principle of organising joint public hearings to allow representatives of member states’ candidacies to present their applications. The co-legislators will assess each application according to the selection criteria included in the call for applications, the information provided by candidates in their application forms, the Commission’s assessment of those forms as well as the outcome of the joint public hearings.

Chronicle.lu caught up with Minister MacNeill during her visit to the Grand Duchy and asked her a number of questions:

Chronicle.lu: Dublin is one of nine EU cities vying for the seat of the new Anti-money-laundering authority (AMLA). Please tell us what are Dublin's main USPs.

Minister MacNeill: It is its skilled people, and the reason that we have such talented people is that we are a major global financial services centre, like Luxembourg. It is also a major centre of technology and the money-laundering authority is going to need to be staffed quickly, at least in the first instance from the home country. We have 16 of the top 20 global technology companies and 20 of the top 25 financial services companies. We have the skills already, both in financial services and in tech to be able to staff this quickly and at a really high level. Overwhelmingly, our skills are our skilled people. This is going to become more and more dependent on technology as time goes on. I'm just back from the Singapore FinTech festival where a huge focus was on what AI is going to do for anti-money-laundering, what it is going to do for Know Your Customer and how much that is going to be a feature for the future. So, yes, Dublin is a financial centre, but it is a financial and a tech centre. So there really isn't any other city like that, that is competing for this authority. Quite apart from that, from the European perspective, regional balance is very important. 

Of course, Dublin, despite Ireland being a member for 50 years, and being very strong, committed Europeans, it doesn't have an agency, an authority of this kind. We have a small research facility, EuroFound (the EU Agency for the improvement of living and working conditions) which is actually in my own constituency out in Dun Laoghaire. But it doesn't have an entity of this of this scope and of this scale, of a decision-making authority really, in the way that many of the other cities do. And we would like to see the regional balance being affected through the decision where to locate it. There are a lot of big countries going for it; we are obviously a smaller country but we are a major financial services centre. There is a real credibility around Dublin being the seat for this. We have a really strong regulator in the Central Bank, a gold-standard regulator that everyone wants to be part of; everybody wants the Irish Central Bank's seal of approval, it's a huge marketing tool. So, we have the skills and compliance. We have the English-speaking nature. Dublin is obviously a great place to live. But there is another thing as well, about the future of the anti-money-laundering authority, the future of where Europe sits, in terms of influence and anti-money-laundering and counter-terrorism financing. And that is around its links with non-European entities. Europe is a leader on GDPR, it is a leader on taxonomy, on sustainable finance. It really should, and can be, a leader on this as well. Dublin is an English-speaking common law jurisdiction, so there is an alignment and understanding with the UK and the US already, but also Dubai which uses English-speaking common law for financial services systems, and Singapore and Hong Kong, so it is not just about ALMA today but it is about AMLA five years from now and AMLA ten years from now, and the influence that the European model and the European position can have. We, in Dublin being that English-speaking common law jurisdiction, can really amplify AMLA's work in addition to the skill bases of people and the synergy between tech and finance that I have just described.

Chronicle.lu: Today you met with Luxembourg's new Minister of Finance, Gilles Roth. Do you believe you have convinced him/Luxembourg to support Dublin's AMLA bid?

Minister MacNeill: I couldn't possibly comment, I had a very pleasant I wished the new Minister of Finance well in his new brief and was delighted to see him there. We had a really good conversation about this but we had a really good conversation about financial services more broadly which is a huge part of Luxembourg's economy; and it's a huge part of the Irish economy. I think that there's an awful lot that we can do, perhaps more collaboratively together for the future in terms of developing financial services, particularly maybe retail investment. So we talked about a lot of things, but that's a matter for him and for his Prime Minister, as to where they place their support. But, certainly, I would have pressed strongly the point that a real strong financial services centre ... would be a natural place for this authority.

Also, I had the good fortune to meet my old friend, Yuriko Backes, who obviously has moved on from the finance department now, but I would have worked with her in the past; (it was) great to see her in her new position in defence and gender equality, so I had the opportunity to pay a courtesy call to her also.

Chronicle.lu: Please tell us about the Ireland for Finance strategy that was launched in 2019? In this context, do believe that Ireland and Luxembourg are more competitors than collaborators?

Minister MacNeill: Well, I would hope that we would be collaborators, and that it why it is so exciting to come here and talk to people like Nicolas Mackel, with Luxembourg for Finance and speak with the current Minister for Finance and the previous Minister for Finance and thinking about different ways in which we can collaborate as two small jurisdictions of major independent financial service centres, and what we can do in terms of alignment on European files, particularly in the retail investment strategy. So I think there is an awful lot more perhaps that we can do now in the future and I'm really excited to be here in Luxembourg, not on a Zoom call, not in the fringes of an Ecofin meeting or any of that, but to be her, to sit down properly and talk to people about what next. I'm (dedicated) Minister for Financial Services, I think I'm the only Minister for Financial Services in Europe, so why wouldn't I be here in Luxembourg to try to talk to people directly about the opportunities to work together and to strengthen both independent (centres). 

I'm meeting LHoFT later on today and that is something that Ireland is trying to drive as well, creating a FinTech hub... We already have a very strong FinTech ecosystem but to really put a structure around that to help it develop for the future. So I thank that there is an awful lot to be done together. Our financial services strategy... that is an evolving strategy, we have a new set of actions every year; it is a huge focus obviously for the government, for the department to grow really high value employment and to really bed that in. A bit, slightly different to Luxembourg, we have a very strong funds sector, yes, but we also have a very strong international insurance piece and a very strong banking piece, so there is a different complexity to the structure of the industry. We are constantly focussed on growing that and driving that, but a couple of key themes for us at the moment are sustainable finance. I'm just back from COP28 where I was there for the first days as a Finance Minister to try to help drive that with other political colleagues, and also obviously digital finance which is going to be absolutely huge for all of us. So they will be the two key priorities for us: FinTech, Digital Finance and Sustainable Finance, going in now to the next twelve months. It's a strong strategy and it shows a whole of government commitment being able to grow the industry very considerably and think that there is a lot more, if we do it in a collaborative way, there's a lot more we can do with Luxembourg.

Chronicle.lu: In March 2023, Luxembourg launched a Women in Finance Charter to improve gender diversity in the Luxembourg financial centre; Ireland’s Women in Finance Charter was launched almost a year earlier, in April 2022, as a pledge for gender balance across Financial Services. Has Ireland's charter started to make a real difference, or are they still to come?

Minister MacNeill: There is still a long way to go, to be honest with you. We have had a good start; originally we had 50-something sign up and we are now up to about 75-76 companies; it's more and more all the time, but I would like to see it considerably beyond that and to see companies making a commitment to signing up. Now, there are a few difficulties. If you are a very small company of less than ten people, small changes make a big, big difference; but it about being committed to those values and taking steps towards that. Or if your company has an international presence , perhaps you have signed up to an equivalent charter - in Luxembourg, or somewhere else - so we have to recognise some of those pieces. Notwithstanding that, there is a lot further to go and what we are seeing from the research is that women are just simply under represented, particularly at the senior level of financial services companies. 

We have seen 20 years of essentially being equal, men and women going in and out of university into early stage careers in financial services, there is not a trickle up effect and there will not be a trickle up effect. We have seen that in law, we have seen that in accountancy, in financial services, it doesn't happen. Women take a disproportionate impact on their careers from having children and caring for those children in ways that are very often systemically disproportionate to men, and it impacts their career. We can see that... across jurisdiction, we can see that across sector, it simply is the way it is and unless you are putting visibility, transparency on that, in the way that Women in Finance Charter does, in setting targets and being really honest about that, it isn't going to change. I think the most important thing that I see with companies in doing this is a real commitment to their employees, to have that honesty, to have that transparency and have that real commitment. I am sick and tired of people having International Women's Day events without matching it in terms of what they're doing on their gender pay gap, matching it in terms of what they're doing in terms of visibility and promotion of women within organisations. This is a much more serious way of showing commitment.

Chronicle.lu: Going back to what you said originally about companies signing up, it's not just about companies signing up, it's about companies implementing it. So, I'd like your views on that, and also what are your views on gender quotas.

Minister MacNeill: You can't sign up without implementing it because of the way it works is that it tracks the number of women and men at every level of the organisation, not just to focus on the board which can sometimes be artificially changed. It's a focus on - at every level - where are you, what are your targets for next year and are their maintenance targets, are they development targets, and having a strategy about growing promotions, about dealing with language, about unconscious bias and so on. To be very fair to the organisations that have signed up, it is not actually difficult to commit once you sign up; it isn't just a tick box we would like to do this, it actually involves quite a bit of work, positive work. It is the ESRI (Economic and Social Research Institute) who audit this, who manage this and conduct the research, so you can't do it except in a way that shows a lot of commitment, which is important.

And gender quotas (re financial services), I don't ever like to have to ever get to that, it's not what we want to do. You see conversations around that in relation to boards, but boards is not really where it's at. To my mind, it's the executive decision-making that it important. That's where decisions are made, that's where the authority and influence is, that's where the seriously well remunerated positions are, that's where people want to be and, if you can't get a pathway to that with credibility, then that's very difficult. Having visibility around those mid-stage career points where women are persistently falling out of organisations, and it is an organisational failure for that to persistently and systemically happen. Having a real strategy around getting women through that period in an equal way to men, that's how you address that. We have had gender quotas and gender incentives in politics in Ireland and it has had an impact: we will have an increase from having had 30% (women) in parties in the last election, it is moving towards 40% in the next election - which will be within 18 months. It is a challenge for political parties because women are not as inclined to act in traditional ways, to put their hands up or to push themselves forward in a particular way. They behave differently that is of value within itself. They behave differently and the system has to enable both genders to come through. But it is reasonable that both genders should be represented equally in politics and in financial services.

Chronicle.lu: In your other meeting today with Nicolas Mackel, CEO of Luxembourg for Finance, what have been the main outcomes?

Minister MacNeill: Well, really a discussion about financial services in both jurisdictions and where we can go, what are the opportunities, where can we collaborate better, what can we do together for the future. Part of being here is simply being here and meeting people directly and in a personal way, being here on the ground in Luxembourg, driving around and walking around, I see the presence of so many fantastic financial institutions. I am delighted that Luxembourg does as well as it does as I am that Ireland does as well as it does, because why shouldn't you have these really strong independent financial centres that are perhaps not Germany of France, that are different and that are coming from a different ecosystem. I think that we should be working together more closely, I think we should be collaborating and I'm excited about that. So, it was really good. But I've also managed to get more than finance in; I was at the film institute (Luxembourg Film Fund) this morning, which was fantastic with Guy (Daleiden). The film industry in Ireland actually is something that's very close to my heart - I represent a constituency in south Dublin that is just on the border with Wicklow, which is where most of our film production is made, and a lot of people in my constituency work there, so Macdara Kelleher who was co-producer in Luxembourg on Black '47, he was in with me before I became minister because we have this really strong emphasis on work in my constituency and we have made a couple of changes this year in section to Section 481 tax relief, and extending that we're going to be doing something really exciting on the unscripted broadcasting sector. There is an awful more that can be done, so the Department of Finance is committed to a further analysis  of the opportunity there. It was really fantastic to catch up and see some of the co-productions

Note: after the interview, Minister MacNeill also met with Nasir Zubairi, CEO of the Luxembourg House of Financial Technology (LHoFT).