Counterfeiters moving online and turning to complex TBML schemes to launder proceeds says Europol

The online and offline distribution of fake and substandard goods now relies heavily on the digital domain and criminals trafficking counterfeit food and drink are setting up complex trade-based money laundering (TBML) schemes according to Europol.

The EU law enforcement agency’s Intellectual property crime threat assessment 2022 also concludes that the financial dimension of the counterfeiting business operating in the EU largely remains an intelligence gap.

TBML usage

Criminals use TBML schemes to hide illicit funds by integrating them into normal commercial flows and avoid tracing and detection according to the report.

It says counterfeiters also launder their criminal proceeds using money remittances, cryptocurrency exchangers, cash-intensive businesses and by purchasing property and high-value goods.

The report cites a Europol case revealed in 2021 in which investigations into a criminal network that adulterated highly priced Spanish saffron to launder millions of euros revealed a complex TBML scheme set-up across the EU (Trade-based Financial Crime, 17 May 2021).

Sophisticated structures

Money laundering structures have become more sophisticated and often incorporate brokers and financial advisers according to the report.

It says money flows often lead investigators to offshore jurisdictions, criminals switch accounts frequently to obscure money trails and cryptocurrencies are increasingly used by counterfeiters as part of their money laundering efforts.

Digital migration

“Like many other criminal activities, counterfeiting now relies heavily on the digital domain to source components and distribute their products (both tangible and non-tangible) to consumers via online platforms, social media and instant messaging services. The Covid-19 pandemic has further entrenched this development,” the report warned.

“There is also evidence that counterfeiters launder their criminal proceeds by using both traditional and more sophisticated schemes that make use of technology, TBML and offshore jurisdictions,” it concluded.

Europol’s Intellectual property crime threat assessment 2022 can be found here.

Categories: Trade Based Financial crimes News

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