Trade-based money laundering (TBML) is described in a report by Europol, the EU police agency, as a “highly effective way of concealing criminal funds” for some of the thousands of international organised crime groups (OCGs) operating throughout the EU.
The report says there are now more than 5,000 OCGs operating in their area, up from 3,600 in 2013. The latest figure is more a reflection of an improved intelligence picture rather than an absolute increase in the number of gangs.
The report contemplates various types of TBML, including manipulating or forging purchases or sales using double invoicing, false invoicing, and over- and under-invoicing by companies that are owned by OCGs, their associates and relatives.
False invoices and forged ID documents are also used by shell companies owned by OCGs to conceal criminal funds according to Europol.
The report highlights a 2016 investigation by French, Spanish, German and Dutch law enforcement authorities. They disrupted an OCG laundering proceeds generated by the trade of heroin.
This OCG collected proceeds throughout the EU and laundered the funds in Middle Eastern countries relying on cash couriers and TBML techniques. The OCG purchased expensive secondhand cars, heavy machinery and construction equipment in Germany in cash and exported them to Iraq where they were again sold for cash.
No paper trail
The group then used money service businesses and Hawala money exchanges to introduce the funds into the legitimate financial system, leaving virtually no paper trail.
The report, ‘EU Serious and Organised Crime Threat Assessment 2017’, can be downloaded here.
Categories: Trade Based Financial crimes News