Europol has launched the new European Financial and Economic Crime Centre (EFECC). The center will enhance the operational support provided to EU Member States and EU bodies in the fields of financial and economic crime and promote the systematic use of financial investigations. The EFECC has been set up within the current organizational structure of Europol and will be staffed with 65 international experts and analysts.
Economic and financial crimes are a highly complex and a significant threat affecting millions of individual EU citizens and thousands of companies in the EU every year. In addition: money laundering and criminal finances are the engines of organized crime, without them criminals would not be able to make use of the illicit profits they generate with the various serious and organized crime activities carried out in the EU. According to previous reports by Europol, 98.9% of estimated criminal profits are not confiscated and remain at the disposal of criminals.
Furthermore, the COVID-19 pandemic in Europe has provided ample evidence that criminals are quick to adapt their criminal schemes to changing conditions to exploit fears and vulnerabilities. Economic stimuli such as those proposed in the wake of the COVID-19 pandemic will be targeted by criminals seeking to defraud public funding. To effectively disrupt and deter criminals involved in serious and organized crime, law enforcement authorities need to follow the money trail as a regular part of their criminal investigations with the objective of seizing criminal profits.
Europol’s strategic report published on June 5 provides an overview of the most threatening phenomena in the area of economic and financial crime including various types of fraud, the production and distribution of counterfeit goods, money laundering and others.
It states that 58% of customers banking in the EU now regularly use digital online solutions such as websites or applications to carry out transactions, and mobile banking alone had risen by 50% by the end of 2019. While these banking methods afford convenience, they also present risk. Customers are not necessarily proficient users of these services and a lack of technical knowledge and experience may make them vulnerable to attacks by cybercriminals deploying phishing techniques and malware solutions in order to gain access to online accounts.
In addition, increasing digitalization and less direct interaction with customers has the potential to weaken know-your-customer (KYC) procedures, which were put in place to prevent tax fraud, money laundering and using the financial system to finance crime and terrorism. Weakened KYC regimes increase the vulnerability of financial services to be used for various criminal activities including online banking fraud.
The report goes on to list the numerous ways in which financial crime can manifest, including money laundering, fraud, and intellectual property crime.
Wim Mijs, CEO of the European Banking Federation (EBF), said he is extremely happy that economic and financial crime will now be tackled by a fully dedicated center within Europol.
“Financial crime undermines the stability of the banking sector and is a serious threat to the whole society. The fight against dirty money aims to cut off resources to organized crime gangs and terrorists and is hence of the utmost importance. At the forefront of this fight, EBF is a trusted partner of Europol and therefore very much welcomes that this cooperation will now benefit from the support of an even more adequate structure and resources”.
EFECC will also be a privileged partner of the newly established European Public Prosecutor’s Office to promote and support financial investigations into crimes that affect the financial interests of the EU.