What is the reality of the proceeds of crime in the EU?
The key findings of the EUROPOL 2016 report titled: “Does crime still pay? Criminal asset recovery in the EU” states that: 98.9% of estimated criminal profits are not confiscated in the EU, the Transcrime Institute estimates that illicit markets in the EU generate about 110 billion Euro annually or 0.9% of the 2010 GDP of the EU, for the period analysed in the report 2.2% of the estimated proceeds of crime were provisionally seized with 1.1% of the 2.2% finally confiscated or 2.4 billion Euro provisionally seized with 1.2 billion Euro finally confiscated. In the report Europol states: “Many EU law enforcement agencies seem to have very limited resources for carrying out effective financial investigations and tracing criminal elements.”
The law enforcement agencies of the EU are then failing to appreciably ensure that crime does not pay in the EU as the actual sum of confiscated proceeds of crime is only 1.1 billion Euro of an estimated quantum of 110 billion Euro. The issues are: the inability of EU law enforcement agencies to confiscate a punishing quantum of the total estimated proceeds of crime and the inability to build airtight cases to successfully confiscate most of the proceeds of crime provisionally seized. Both realities illustrate the structural weaknesses of national policing and especially the failure of national policing in a single market driven by the free movement of goods, capital and currency which is an operational paradise for transnational organised crime. In such an operational reality national policing simply cannot answer to the specific threats that emerge in a transnational single market. The national politicians of the EU have then signally failed to wrestle with this specific threat created by the specific nature of the EU and in so doing have refused to create a transnational law enforcement agency with the requisite power and resources to engage with transnational organised crime in the EU on an EU scale and basis. The single market is adored and worshipped until a swarm of non-European asylum seekers flood the EU raising specific threats to the self-definition of the social order of specific member states thereby triggering talk of Exit. Whilst the very said politicians refuse to accept the need to formulate EU institutions to deal with specific threats generated by the EU as the nation and their voter base remain paramount to their survival. These instances illustrate that the EU is simply a convenience that must be defined by and driven by national interests not what is necessary to ensure the sustainability of the EU project and a convenience can soon evolve into an inconvenience hence Brexit. There is no commitment to the politics of a single market which renders the EU a victim of arrested development where organised crime evolves rapidly in this incubator.
The major problem with this Europol report is the estimate of the proceeds of crime used in the study as an estimate that is a realistic approximation of the proceeds of crime can only be generated from a working knowledge of the methodology and business of crime. To illustrate this, I will present the reality of the illicit drug trade in the EU. An estimate of the proceeds of the drug trade must be informed by knowledge of the volume of product imported into the EU and produced in the EU. The price structure of wholesale and retail drug markets must be monitored along with the volumes of product that move through drug markets over periods of time and the purity of product available on drug markets. The most important reality that must be grappled with is the diversity of drug markets throughout the EU and the variation in prices and purity for in drug markets the nature of demand, the dynamics and logistics of supply and the power relations of the market especially which crime groups are exercising hegemony and the power relations of their supply logistics. An estimate that approximates the reality of the illicit drug trade of the EU is then highly problematic as is with all illicit trades of the EU. One can then safely insist that the estimate of 110 billion Euro used in the study is understated. In the world of the illicit drug trade policing poses no existential threat to this illicit trade as is with all other illicit trades the fact of policing is a cost of doing business that is part of the accepted cost structure. There can be no sustainable illicit markets and the proceeds from these illicit markets without their integration into licit markets where the proceeds of crime are washed and placed in circulation in licit markets and the seamless integration of enterprises owned by players in the illicit markets into the licit markets. The proceeds of crime are then opportunities for profit generation in licit markets and in a diverse licit terrain contained in a single market which has failed to create and empower a relevant intra EU law enforcement agency and to create the necessary intra EU legislative regulatory framework then transnational organised crime will run rampant. The diversity of EU organised crime today is then instructive.