European Criminal Networks Exploit Technology to Outpace Authorities, Europol Report Reveals

Criminal networks in Europe are rapidly adapting to new technologies, allowing them to expand their operations and launder money faster than authorities can keep up, according to a recent Europol report. The report disclosed that these criminals are increasingly integrating illicit finances with seemingly legitimate businesses.

Money Laundering Threatens EU’s Financial Stability

The European Financial and Economic Crime Threat Assessment report released by Europol revealed that approximately 70% of criminal entities operating within the European Union utilise money laundering techniques. This approach is used to generate revenue and conceal assets, jeopardising the region’s financial stability and hindering economic growth. The authorities are reportedly struggling to uncover and prosecute these financial crimes due to the increasing speed of deception.

Modern Technology Fuels Criminal Activity

Catherine De Bolle, the executive director of Europol, highlighted in the report that while trade and technology have connected the world, criminals are exploiting these advancements for their benefit. “The ability to launder illicit proceeds on an industrial scale, to move them through a web of criminal financial brokers, and to corrupt the relevant actors, has become indispensable for modern organised crime,” De Bolle commented.

Digital Banking: A Boon for Criminal Networks

The shift to virtual services during the COVID-19 pandemic has inadvertently assisted criminal networks. Digital banking, particularly online banks without physical branches, now offer nearly anonymous international deposits at high speed, making illicit activities challenging to detect.

Criminal Exploitation of Third Countries and Offshore Firms

The Europol report acknowledged the 2021 Pandora Papers investigation by the International Consortium of Investigative Journalists (ICIJ) for shedding light on how criminal enterprises evade sanctions and conceal beneficial ownership through intermediaries and offshore firms. The report also emphasised the criminal use of third countries to move money connected to Russia, defying Western sanctions imposed following the 2014 invasion of Ukraine.

Global Money Laundering Scandals

The ICIJ’s 2020 FinCEN Files investigation, in collaboration with BuzzFeed News, exposed the global nature of money laundering. The investigation revealed that transactions through U.S.-based banks enabled over $2 trillion in suspicious transactions to flow internationally. Notably, banks like JPMorgan facilitated the movement of money connected to the theft of public funds in countries like Malaysia, Venezuela, and Ukraine.

Efforts to Increase Transparency

Following these revelations, U.S. lawmakers introduced an extensive anti-money-laundering bill requiring the Treasury’s financial crimes unit, FinCEN, to increase transparency and eliminate anonymously-owned shell companies by creating a registry of company owners. However, the rollout of this database, scheduled for early 2024, has been delayed due to political disagreements.

In Europe, company registries face similar challenges. A 2018 EU regulation requiring member states to publish company ownership registries was invalidated by the EU’s Court of Justice in 2022, causing backlash from transparency advocates.

Increasing Criminal Asset Seizures

Despite these obstacles, the Europol report noted that criminal asset seizures in the EU have been growing over the past decade. Yet, De Bolle estimated that EU authorities confiscate less than 2% of criminal organizations’ annual earnings, with the money hidden worldwide. “This is not something one police force or country can change by itself,” De Bolle asserted, emphasizing the need for strengthened cooperation and new approaches.