|Financing of Organised Crime
The financing of organised crime is a horizontal issue for all criminal markets, although it rarely falls in the focus of law enforcement agencies. Accessing capital is an important constraint for criminals when they seek to become big players in illicit markets for goods and services. Enhancing the knowledge of the financing of organised crime is an indispensable component of more effective and smarter approaches to prevention and investigation. |
The law enforcement institutions have traditionally been focused on predicate crimes with the aim to imprison the perpetrators and seize the illicit goods. A more recent focus of their efforts in the last 20–30 years is money laundering with the aim to confiscate assets obtained through criminal activity. However, many other key aspects of criminal activities – such as the sources and mechanisms for financing organised crime, settlement of payments, access to financing in critical moments, costs of business and the management of profits – remain outside the scope of the law enforcement authorities.
The analysis of the criminal financing reveals several common patterns across the different organised crime activities:
- Criminal enterprises, regardless of whether they operate in an entirely illegal market (drugs) or compete in a market with numerous legal players (cigarettes), at some point of their life cycle face many of the same dilemmas and financial limitations that are typical for legal businesses.
- The social capital of criminal entrepreneurs (i.e. their trusted connections and reputation) is more important than the financial capital for entering, operating and succeeding in a given criminal market.
- Along with the criminal proceeds, legitimate sources also play an important role in the financing of criminal undertakings.
- Although criminal economy is known as cash-driven, a great deal of the payment is carried out through the legitimate financial system.
The criminal justice institutions of Member States could increase their operational effectiveness against organised crime by making organised crime finances of equal policy importance as predicate crimes and substantially increasing the number of financial investigations.
The report Financing of Organised Crime
CSD Policy Brief No 50: Overcomming institutional gaps to tackle illicit financing
Model Approach for Investigating the Financing of Organised Crime
Round Table: Overcoming Institutional Gaps to Tackle Illicit Financing
Presentation of Mr. Shir Shah Nabi on 13.03.2015 in The Hague The Facilitating Role of Underground (hawala) Bankers in Organised Crime (Adobe PDF, 277 KB)
Presentation of Mr. Atanas Rusev on 13.03.2015 in The Hague Organised VAT fraud in the EU: mixing
the money flows (Adobe PDF, 223 KB)
Presentation of Mr. Georgios A. Antonopoulos and Ms. Alexandra Hall on 13.03.2015 in The Hague The Illegal Tobacco Trade in the EU: Financial Aspects of a Fragmented Business (Adobe PDF, 218 KB)
Presentation of Ms. Fiamma Terenghi on 13.03.2015 in The Hague Cocaine Trafficking in the EU: Commonalities in financing (Adobe PDF, 224 KB)
Other publications on organised crime