Based on criminal information from investigations in Member States, Europol has assessed the impact of the pandemic across current, mid and long-term phases on the serious and organized crime landscape. Lee Kok Leong, executive editor, Maritime Fairtrade, reports
Europol’s monitoring efforts to understand the impact on serious and organized crime in the EU has so far focused on immediate developments in the aftermath of the COVID-19 outbreak and the introduction of quarantine measures. COVID-19-related criminality, especially cybercrime, fraud and counterfeiting have followed the spread of the pandemic throughout Europe.
An easing of lockdown measures will see criminal activity return to previous levels featuring the same type of activities as before the pandemic. However, the pandemic is likely to have created new opportunities for criminal activities that will be exploited beyond the end of the current crisis. It is expected that the economic impact of the pandemic and the activities of those seeking to exploit it will only start to become apparent in the mid-term phase and will likely not fully manifest until the longer term.
Some of the relevant crime areas are:
- Money laundering. The pandemic and its economic fallout will exert significant pressure on the financial system and the banking sector. Anti-money laundering regulators must be vigilant and should expect attempts by organized crime groups to exploit a volatile economic situation to launder money using the on-shore financial system.
- Shell companies. Criminals will likely intensify their use of shell companies and companies based in off-shore jurisdictions with weak anti-money laundering policies at the placement stage to receive cash deposits that are later transferred to other jurisdictions.
- The real estate and construction sectors will become even more attractive for money laundering both in terms of investment and as a justification for the movement of funds.
- Migrant smuggling. While the economic impact of the COVID-19 crisis in Europe is not yet clear, it is expected that the impact on economies in the developing world is likely to be even more profound. Prolonged economic instability and the sustained lack of opportunities in some African economies may trigger another wave of irregular migration towards the EU in the mid-term.
Organized crime is highly adaptable and has demonstrated the ability to extract long-term gains from crises, such as the end of the cold war or the global economic of 2007 and 2008. Communities, especially vulnerable groups, tend to become more accessible to organized crime during times of crisis. Economic hardship makes communities more receptive to certain offers, such as cheaper counterfeit goods or recruitment to engage in criminal activity.
Mafia-type organized crime groups are likely to take advantage of a crisis and persistent economic hardship by recruiting vulnerable young people, engaging in loan-sharking, extortion and racketeering.
Organized crime does not occur in isolation and the state of the wider economy plays a key role. A crisis often results in changes in consumer demand for types of goods and services. This will lead to shifts in criminal markets.