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EU money laundering report

The European Union’s work against money laundering is poor, and more needs to be done to exploit the framework in place to counter such financial crime. That’s according to a new Europol report.

The current efforts are ineffective to tackle burgeoning cyber-enabled crime, and rapid transfers of funds, Europol Executive Director Rob Wainwright warns in a foreword to the report. The time it takes for the private sector to co-operate with law enforcers means that the speed of response is simply too slow to stem the flow of funds, ‘which move globally almost instantly’, Wainwright wrote.

In 2014 EU Financial Intelligence Units (FIUs) received almost one million reports. Most, over 65 per cent of these reports are received by two of the 27 member states – the UK and the Netherlands. Although the overall number of suspicious transaction reports (STRs) continues to increase, only around 10pc of these reports are further investigated – a figure largely unchanged since 2006, says Europol. Even where further investigated, the likelihood of successful asset recovery is low, and barely 1pc of criminal proceeds are confiscated by relevant authorities at EU level.

For the 44-page document, from Europol’s Financial Intelligence Group, titled From Suspicion to Action – Converting financial intelligence into greater operational impact, visit the Europol website.

Rob Wainwright said: “Clearly there is no lack of activity, and a great deal of time and resources are put into sending, receiving and handling millions of reports each year. However, the fact that very few are either the result of a police-directed effort or the subject of any significant feedback indicates that resources may be misdirected. In law enforcement and intelligence communities an ‘intelligence-led’ approach of using enhanced knowledge of the threat to direct operational resources into the highest priority areas is at the heart of all counter-terrorist and other major security programmes. That these conceptual principles have not fully translated in to the anti-money laundering regime partly reflects poor outcomes.”

“The anti-money laundering regime still operates at a domestic level, and has not yet fully adjusted to the reality of a problem that is defined by its international nature. While structures exist to facilitate cross-border cooperation between national units, significant barriers in international cooperation and information exchange remain, revealing the urgent need for supranational overview in increasingly global markets.”

Europol says that the growing demand for online services and related internet payment systems poses considerable challenges to the EU policies on money laundering and terrorist financing. The policing agency says that development of borderless virtual environments call for reflection on how to adapt policies which are meant to be supervised only at national level, while the underlying business is already transnational and globalised. The ‘symmetrical’ exchange of information between FIUs may prevent crucial information contained in STRs reaching authorities tasked with criminal investigations, Europol warns. It adds that it could assist in overcoming this by acting as a pan-European hub for STRs for integration with other sources of information stemming from multiple agencies across Europe and beyond.

Meanwhile the European Commission reported on actions taken since President Juncker’s 2016 State of the Union address to enhance security at the EU external border, improve information exchange between Member States, close down the space in which terrorists operate and prevent radicalisation. Commissioner for the Security Union Julian King said: “The EU is reducing the space where terrorists can operate: making it harder for them to travel, to train, to get money, weapons and explosives. We have made our external borders more secure, improved our exchange of information about terrorists and other criminals, and stepped up our work with internet companies and local communities to tackle radicalisation. But there remains more to do, as recent attacks have again tragically underlined. Our citizens look to us to protect and strengthen their security; working together we need to deliver on the commitments we’ve made.”


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