Major profits from large-scale illegal activities have to be laundered to enter the so-called clean economy.
The money laundering itself is increasingly done by external specialised groups, which take a 5-8 percent cut for the service, Europol, the EU’s police agency, says.
When only considering the Italian mafias, a 2016 report by the EU’s judicial cooperation agency, Eurojust, notes their infiltration into the legitimate economy in “Spain (particularly favoured by the Italian Camorra), the Netherlands, Romania, France, Germany, and the UK.”
But how are they doing this?
Primarily through “real estate investments and participation in public or private contracts, particularly in the field of construction, public utilities and waste disposal,” the report says.
The Transcrime Organized Crime Portfolio (OCP), edited by Paolo Savona and Michele Riccardi, also notes “cases of organised crime investments were found in almost all EU member states (24 out of 28)”, predominantly in Italy, France, Spain, the United Kingdom, the Netherlands, Germany, and Romania.
Dirty money, the OCP study says, is mostly “in areas with a historically strong presence of organised crime groups (e.g. southern Italy), in border regions, or in areas which may play a crucial role in illicit trafficking (e.g. Andalusia, or Rotterdam and Marseille with their harbours), large urban areas (e.g. London, Amsterdam, Madrid, Berlin) and tourist or coastal areas (e.g. Côte d’Azur, Murcia, Malaga or European capitals).
Southern Spain, for example, attracts dirty money from Italian mafias, Russian criminals and northern European biker gangs.
In recent years, criminal investments focused on “renewable energy, waste collection and management, money transfers, casinos, VLT, slot machines, games and betting”.
Recommendations on these issues have been made repeatedly to the member states and the European Commission through resolutions, reports, and policies approved by the European Parliament, but they have all yet to be enacted.
Among those requesting action are Eurojust and Europol, which are well aware of the risks posed by the mafia.
Nevertheless, the EU does at least have a definition of organised crime.
A Council framework decision from 24 October 2008 defines it as: “a structured association, established over a period of time, of more than two persons acting in concert with a view to committing offences … to obtain, directly or indirectly, a financial or other material benefit.”
This definition, however, does not satisfy the Europol investigators because, according to a “Serious and Organized Crime Threat Assessment” (Socta) report in 2017, it “does not adequately describe the complex and flexible nature of modern organised crime networks.”
Article 2 of the framework decision requires all member states to consider the offence of organised crime itself as separate from the actual committing of a crime (it suffices to agree to commit or plan for illicit activity) – something that already exists in Italian law.
Yet, ten years later, this issue is still on the table.
Eurojust’s 2016 report notes that “not all member states … have adopted similar provisions,” and “when they have done so, the extent of the application of and penalties attached to such offences varies greatly, and so do the possibility and requirements for applying special investigative techniques such as wiretapping.”
Denmark and Sweden still have no organised crime law. Instead, individual crimes that have been committed are punished with the aggravating factor of colluding with several people.
Germany and the Netherlands have legislation, but it is considered rather lenient. And Bulgaria is only one of the few countries to harmonise its own legislation with the 2008 Council framework decision.
This is the first problem faced when fighting the mafia on a European scale: Member states do not agree on what organised crime is, and in some cases, whether there is even a need for such a definition.
And then there is the fact that the specific offence of mafia association, which was an innovation in the Italian criminal code dating back to 1982, does not exist anywhere else. For example, an investigation into the ‘Ndrangheta group, which started in Reggio Calabria, risks running aground in the Netherlands.
For this reason, a 2011 EU parliament resolution asked that all individual member states “make associating with mafias or other criminal rings a punishable crime,” and that they do so “even without any specific acts of violence or threats.”
This specification responds to the mafias’ ability to camouflage themselves, since they have declined considerably in their rates of violence, in Italy and abroad, to avoid drawing too much attention from investigators and public opinion.
Six years later, no country has followed up on the EU parliament’s request, however.
As well, in 2013, Europol called for a European version of Italy’s innovative anti-mafia law.
In a report on Italian organised crime, Europol said: “Being a member of a mafia-type organisation must be considered as a crime per se.”
It added that: “Anti-mafia legislation must be harmonised at EU level, and extradition requests for fugitive mafiosi should be prioritised by receiving competent authorities.”
But no progress has been made since.
The cornerstone of the fight against organised crime is undoubtedly an EU directive from 3 April 2014 on the freezing and confiscation of the proceeds of crime in the EU.
Originally hailed as a breakthrough, the legislation, as in many cases, ended up being watered down during the approval procedure.
The final text is based on recognising that, although cross-border criminals aim for profit, “the existing regimes for extended confiscation and for the mutual recognition of freezing and confiscation orders are not fully effective.”
The problem is specifically “differences between member states’ law.”
But not all countries considered this a problem. The UK and Denmark did not sign the directive, and are not bound by it. Poland voted against it; Ireland voted for it but limited it to the crimes covered by its own national law.
When the directive was approved, Sonia Alfano, the former chair of the EU parliament’s special committee on organised crime, corruption and money laundering (CRIM), lent her disapproval, saying some “member states prefer to protect defendants rather than victims of crimes.”
Countries like Germany, she said, were “given the chance to return assets gained from illicit activities to the EU’s coffers,” but “blocked the way and obstructed approval of a more effective, ambitious text.”
During the discussion about the confiscation directive, amendments were introduced by the EU parliament’s committee for civil liberties, justice and internal affairs, which clearly stated that an effective fight against organised crime would unquestionably need measures separate from criminal convictions, especially regarding “assets and profits.”
But why did these intentions fall by the wayside?
The problem is best explained in a study by the Icarus Project, led by Nando dalla Chiesa of the University of Milan and by Anna Catasta of the European Initiative Centre in 2016: “The opposition was due primarily to the fear that preventive confiscation would be a disproportionate risk on the issue of the protection of the rights of property.”
At the top EU institutions, there also appears to be an endless struggle between protecting rights and pursuing justice.
Moreover, confiscation without conviction has been given the green light many times by the European Court of Human Rights.
Judges have clarified that it is not punishment without trial, but a matter of preventive measures.
Although the European system for fighting crime is making small steps forward, it often seems to be going around in circles on the most sensitive aspects.
On 7 October 2016, the EU parliament approved the report on the fight against corruption, prepared by an Italian MEP, Laura Ferrara, which partially adopts the work of Alfano’s special committee.
The report’s 35 pages echoes the same wish-list to the EU commission, that the offence of “criminal association regardless of consummation of criminal ends” should be punishable.
And yet, there has still been very little progress. It’s like a broken record.