Last week Europol – or, more fully, the European Union Agency for Law Enforcement Cooperation – published a report entitled “From Suspicion to Action – Converting financial intelligence into greater operational impact”. The report examines the AML framework within the EU, and looks at the extent – and outcome – of suspicious transaction reporting in the EU. The headline stats are sobering:
- In 2014 – the most recent year for which full statistics are available for analysis – FIUs across the EU received a total of a million reports
- Of those, 65% were received by the FIUs of the UK and the Netherlands
- 10% of reports are investigated further – a proportion that has not changed since 2006
- In 2013/14, reports on terrorist financing accounted for less than 1% of reports made
- The sectors that make the most reports are banks and money service businesses; those that make the fewest are bureaux de change and high value dealers
- “Between 0.7-1.28% of annual EU GDP is detected as being involved in suspect financial activity”, which is – as admitted in the report – “far short of [accepted] estimates around the amount of money laundered through the financial system”.
Europol Executive Director Rob Wainwright is aware that this final finding is the one that will concern people – why is such a small proportion of criminal proceeds being identified and therefore made available for possible confiscation? And his explanation is a sensible one: “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.”
As ever, we are a step behind the criminals. Unshackled by laws or morals, they are infinitely adaptable and will co-operate with anyone, anywhere in the world, for as long as it suits their purpose. We need to learn to do the same: the risks of sharing information and expertise are far outweighed by the benefits, and we do, after all, now operate in a risk-based AML environment.