Friday

21st Sep 2018

EU targets profits of organised crime

  • EU targets assets of crime bosses (Photo: Toni_V)

The European Commission outlined a new set of rules on Monday (12 March) that could make it easier for law enforcement to freeze and confiscate criminal assets.

In a Europe caught in the grips of tough austerity measures and an economic crisis, crime and its payouts are soaring.

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Drugs, prostitution, small arms smuggling and all sorts of illicit activities generate hundreds of billions of euros every year. Drugs alone put an estimated €100 billion per year into the pockets of criminals.

"We need to hit criminals where it hurts, by going after the money, and we have to get their profits back in to the legal economy, especially in these times of crisis," said EU home affairs commissioner Cecilia Malmstrom.

Extraordinarily wealthy criminals disperse their assets overseas or across Europe. Mansions, fast cars, hotels, restaurants and some businesses belong to a world that has so far proven elusive for national authorities and the police to clamp down on.

The United Kingdom was only able to seize £125 million of criminal revenue, out of an estimated £15 billion generated in 2006. Germany managed to take back €113 million in 2009, out of some €903 million.

The wealth and the profit margins far outweigh the risks for many of Europe’s criminal organisations. Profits generated by mafia families in Italy and their assets are thought to run to €150 billion each year.

Malmstrom says the crime robs Europe of valuable tax revenues that could be used to invest in education and health care.

"We need to find those who drain our common resources. That means following the money trail to the criminals with the same determination all across Europe making sure there is no safe-haven for organized crime," she says.

Crime affects economic growth by distorting markets and shutting out legal investments. Dirty money is reinvested in legal activities that distort competition with legitimate businesses already struggling to survive in a slowing economy.

The commission’s proposals for a directive aim to simplify existing rules and close the gaps currently exploited by criminals.

For example, criminals may have assets not directly linked to a crime but which clearly resulted from criminal activities. Others transfer assets to someone not involved in the crime.

In other cases, assets are difficult to seize if the criminal in question is deceased. But in 2010, the Italian authorities managed to confiscate 136 apartments, 11 warehouses, 75 land estates, eight shops, two villas, and 51 garages from a single businessman who had died from unknown causes.

The police suspected he was directly involved with the mafia. Altogether, his assets totaled around €700 million. His family was unable to explain how he had obtained the property.

Under the Commission's proposals, all such activities and practices would be curtailed. Member states would also be required to manage frozen or confiscated assets so they do not lose economic value. They would also have to regularly collect data on confiscation and asset recovery.

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