While cash is slowly falling out of favour with consumers, it is still one of the preferred methods used to launder the proceeds of crime. Almost all crime types make use of cash to facilitate money laundering at some stage, not only traditional crimes which generate cash profits, but also threats now arising from new technologies such as virtual currencies, where cash is used as an instrument to disguise the criminal origin of proceeds. That is according to a report by the European policing body Europol.
In the EU, the use of cash is the main reason triggering suspicious transaction reports within the financial system, accounting for more than 30 per cent of all reports. Reports on detections of suspicious physical cash movements represent around one third of all contributions to Europol in the area of money laundering.
Although the use of cash for payments has experienced a moderate decline in the EU, the demand for high denomination notes not commonly used for payments, such as the 500 euro note, has been sustained. The 500 note alone accounts for over 30pc of the value of all euro banknotes in circulation. This raises questions about the purpose for which they are being used and whether this could be linked to criminal activity, which should be further explored, say police.
Linking cash to criminal activities remains a key challenge for law enforcement. Rob Wainwright, Director of Europol, says: “The use of cash by criminals remains one of the most significant barriers to successful investigations and prosecution. It is a threat that has not received sufficient international attention or legislative solutions. A fragmented enforcement approach at national and international level, and the differing regulatory frameworks across the EU Member States, are widely exploited by criminals, who adapt their methods and routes to take advantage of these loopholes. Stepping up efforts to increase international cooperation and information exchange, and establishing a more harmonised approach among EU Member States concerning cash movements within the EU, are crucial if we are to tackle these criminal activities.”
One of the prevalent methods used by criminals to launder profits remains physical cash smuggling. It is difficult to assess the scale of this criminal activity, but highly conservative estimates based on records received by Europol show that 1.5 billion euros in cash is detected and/or seized by EU state authorities each year.
