Gardaí are assisting the Spanish police with their investigation into a multimillion euro tobacco and alcohol smuggling operation.
Two former IRA members and convicted bombers Leonard Hardy and his wife Donna Maguire, who live outside Dundalk, were arrested in Spain last week.
Garda sources say Maguire has now been released on bail and is due back in Ireland.
Hardy remains in custody on the Canary Islands after bail was set for him at €250,000.
He was a target of the Criminal Assets Bureau and fined €10,000 in the Dublin Circuit Court last July after he pleaded guilty to tax offences.
He is also repaying a CAB tax demand after agreeing to pay the Revenue Commissioners €280,000.
Spanish police say the couple were arrested in Lanzarote on 29 December along with five others as part of coordinated raids in Las Palmas, Alicante, Malaga and Murcia.
The police allege they were part of an organisation smuggling tobacco and alcohol, which laundered money through the acquisition of an estimated €10.5m worth of property.
Spanish officials froze additional property assets worth more than €5.5m, along with 90 bank accounts and investment portfolios in Spain.
Hardy and Maguire are married with four children and live in the townland of Plaster, just outside Dundalk.
Originally from Belfast, Hardy received a six-year sentence in Germany in 2006, after admitting his role in a failed IRA bomb attack on a British Army barracks at Osnabruck in August 1989.
He walked free under the terms of the Good Friday Agreement because the offence happened before 1998.
The Dublin Circuit Criminal Court was told in July that Hardy was "integral" to the Good Friday Agreement.
Maguire, who is from Newry, received a nine-year sentence in Germany in 1995 after being found guilty of attempted murder and explosive offences.
